Home Environment & Climate News Alabama Utility Regulators Allow Increase in Solar Panel Fees

Alabama Utility Regulators Allow Increase in Solar Panel Fees

The Alabama Public Service Commission (APSC) dismissed a challenge by environmental groups to a fee charged to ratepayers with rooftop solar panels.

The fee in question is charged by Alabama Power in order to maintain the infrastructure needed to manage the electricity generated by solar panels and taken from the electrical grid. During the same meeting, APSC, the agency responsible for regulating utilities in the state, approved Alabama Power’s proposed fee increase for rooftop solar installations.

Renewable Energy Support

Residents with rooftop solar power systems installed on their homes receive a 30 percent tax credit from the federal government. In addition, rooftop solar customers add extra costs to the grid because their systems take power from the grid and supply power to it on a fluctuating basis, requiring special technologies to regulate the intermittent power flow. In many states, the additional costs for grid access and maintenance for rooftop solar systems are subsidized by those without rooftop solar systems.

APSC allowed Alabama Power, the utility that provides electric power service to two thirds of the state, to institute a $5 per kilowatt (kw) fee to ratepayers who install solar panels on their homes and businesses in 2013. APSC reasoned ratepayers with solar panels should pay for the added costs they impose on the electric power system and their fair share of the electric grid they use when their solar systems are not generating power.

In 2017, the Southern Environmental Law Center (SELC) filed a complaint challenging the fee on behalf of two Alabama citizens. SELC claimed the fees were discriminatory and against the public interest, because the estimated $9,000 added to the electric bills of customers with rooftop solar panels over the life of the system could dissuade people from installing solar panels on their homes and businesses. However, Alabama Power argued the fees were needed to maintain infrastructure.

On September 1, a unanimous APSC agreed with Alabama Power and voted to dismiss SELC’s challenge ruling the fees “are just, reasonable, and not unduly discriminatory.”

Fee Increase Approved

With APSC’s approval, the fee charged by Alabama Power to customers with rooftop solar panels will rise from $5 per kw to $5.41 per kw, adding approximately $27.05 to the average electric bill of a customer with a typical 5-kilowatt system.

APSC’s decision protects the public interest by helping to sustain the electric grid and ensuring Alabama ratepayers aren’t involuntarily forced to pay for the added costs of rooftop solar power systems, Michael Sznajderman, a manager of Corporate Information and Media Relations with Alabama Power told the Associated Press after the Commission handed down its decision.

“We are pleased with the vote, which validates our longstanding position: that customers with on-site generation who want backup service from the grid should pay the cost for that service,” Sznajderman said. “If not, other customers would unfairly pay the costs for those individuals and businesses.”

H. Sterling Burnett, Ph.D. (hsburnett@heartland.org) is the managing editor of Environment & Climate News.

H. Sterling Burnett
H. Sterling Burnett, Ph.D. is a Heartland senior fellow on environmental policy and the managing editor of Environment & Climate News.

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