Congress debates distributed solar ahead of new legislation

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This set the stage for a lively discussion over the value of distributed solar, mirroring debates that have erupted in state regulatory proceedings and legislatures around the country over the costs and benefits of onsite solar generation.

Held in the Senate Energy and Natural Resources Committee, the hearing was one of a series called this month as Congress drafts broad energy legislation. Precisely how solar power could be impacted is not yet clear, but it appears to be an important topic.

“With the rise of distributed generation and smart grid technologies, Americans are gaining more control over how they use and consume electricity but, as a result, the grid must be even more closely integrated. Innovation and new technologies, such as commercially viable storage, are clearly necessary to assist in this transformation,” said Committee Chair Lisa Murkowski (R-Alaska), in her opening remarks.

“The reliability of our nation’s grid is therefore paramount, and the impact of policy directives must be seriously considered – not dismissed as somehow anti-environment or anti-future.”

The hearing on Tuesday included an added element of intrigue because one of the panelists was an executive vice president at American Electric Power (AEP)—one of the largest utilities in the U.S. that currently is pitted against the nation’s largest rooftop solar installers over net energy metering rules in several of AEP’s service territories that compensate solar-powered customers for excess generation fed into the grid.

Advocacy groups The Alliance for Solar Choice (TASC) and Tell Utilities Solar won’t be Killed (TUSK) have gone as far as launching a new AEP watchdog site dedicated to “uncovering deceptive behavior” and highlighting its alleged efforts “to eliminate the rooftop solar market in all of their territories.” In West Virginia, TASC, which includes SolarCity, Sunrun and other large rooftop solar suppliers, has claimed AEP “aggressively lobbied to prohibit regulators from considering any solar benefits at all.”

Considering costs and benefits

Senator Angus King, a political independent from Maine, while not naming the growing confrontation between AEP and solar installers, seemed to address it nonetheless.

King criticized charges that some state regulators have allowed utilities to tack onto distributed generators for using the grid as “a classic non-market situation,” He then said: “The bottom line for me is we are talking about a disruptive technology and we have got to figure out how to adapt to it, not fight it and strangle it in its crib.”

Lisa Barton, AEP’s executive VP of transmission, countered that while distributed generation is often painted as “a disrupter,” it is complimentary with the grid, which she called “an enabler” of technology innovation.

“Therefore we have to support the cost and infrastructure of that grid so that the costs are not disproportionally spread to other customers,” explained Barton, adding, “Unfortunately, [these are] some of the things that we see happening. If you advocate to have solar rooftop and unplug from the grid, that’s different than wanting [the grid] there as a resource.”

King replied: “How do you value the plusses of distributed generation … versus the cost? … The real question is how to facilitate rather than block what I think in the long run will be very salutary developments on behalf of all our citizens.”

“The key,” said Barton, “is there is value on all sides of the transmission system… DG can certainly be valuable if you aggregate.” But, she implied, it is state regulators who are responsible for exploring costs and benefits of distributed generation, not the federal government.

One such regulator—Lisa Edgar, president of the National Association of Regulatory Utility Commissioners and a member of the Florida Public Service Commission—called for “transparency on cost allocation issues and cost burdens.”

According to Edgar, “distributed generation can have multiple benefits for consumers and the grid. More importantly, however, DG including solar, has idiosyncrasies and challenges that should not be ignored.”

Whether Congress seeks to address these with new federal legislation, or leaves such issues to state energy regulators, remains to be seen.