Regulators must decide how much solar power is worth

JEFF AMY, Associated Press

The Mississippi Public Service Commission will hear public comments Tuesday on a plan to mandate that utilities pay solar panel owners for power they generate.

JACKSON, Miss. (AP) — The Mississippi Public Service Commission will hear public comments Tuesday on a plan to mandate that utilities pay solar panel owners for power they generate.

In dispute is how much utilities should pay for electricity generated by solar panels on homes and businesses, and whether there should be a limit on how many people can install solar panels. Utilities say that depending on how much they're required to pay for solar power, those generators might not cover the costs of power lines and backup power plants needed for nights or cloudy days. Electric cooperatives, which serve 767,000 Mississippi customers, argue the commission can't legally force them to adopt net metering.

Advocates say the benefits of solar power outweigh the costs, even for people who don't install panels. They're backed by a study done by a consultant for Mississippi regulators.

Mississippi would be one of the last six states to adopt such a net metering rule, following regulatory proceedings that began in 2011. The rule proposed by the commission would credit customers for electricity at their normal rate up to the amount of power they use each month. Above that, they would be credited at a cost equal to what utilities avoid by not having to run their most expensive power plants. The rule would initially allow utilities to cap solar generation at 3 percent of their other generation, although a utility could waive the cap.

Entergy Mississippi has been critical of the rule. It argued in a recent rate-making proceeding that its current connection charge doesn't recover the costs of the grid. The utility says customers who install solar will be better off, leaving others to pay.

"Cost shifting has a disproportionately negative effect on lower-income customers by putting upward pressure on rates," Entergy wrote.

The unit of New Orleans-based Entergy Corp. also argues that installations should be capped at 0.5 percent of a utility's customers.

Entergy says that states that adopted rules most beneficial to solar generators are reconsidering, and say solar advocates want Mississippi to "adopt a clearly flawed model." Instead, the company wants to only pay for solar energy at a less-than-retail rate, while still charging full price for power that it sells. Entergy and Mississippi Power Co. also argue that a solar generator shouldn't be able to roll over surplus credits into a future month, limiting financial benefits.

Supporters of rooftop solar panels want utilities to pay at the full retail rate, and want at least the one-year rollover period proposed by the Public Service Commission.

Setting the net metering offset credit at the full retail rate will result in downward pressure on rates as more distributed solar generation is installed and operated in Mississippi," the Sierra Club wrote.

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