Solar Holler founder and CEO Dan Conant addresses solar supporters at a West Virginia Capitol rally on Jan. 27. More than 100 attendees gathered for the rally that, in part, opposed a Mon Power and Potomac Edison proposal to change their net metering arrangements. Solar Holler, the utilities and other parties have reached an agreement to resolve their net metering dispute.
West Virginians for Energy Freedom video screengrab
Solar Holler founder and CEO Dan Conant addresses solar supporters at a West Virginia Capitol rally on Jan. 27. More than 100 attendees gathered for the rally that, in part, opposed a Mon Power and Potomac Edison proposal to change their net metering arrangements. Solar Holler, the utilities and other parties have reached an agreement to resolve their net metering dispute.
West Virginians for Energy Freedom video screengrab
After months of division, solar energy advocates and FirstEnergy utilities have come to an agreement addressing a proposal the advocates said threatened to curtail future solar development in West Virginia and short-change utility customers.
Solar proponents and the utilities have asked the West Virginia Public Service Commission to approve their agreement to resolve a dispute over the future of net metering, a mechanism that credits customers for energy they generate.
The initial proposal from the utilities, Mon Power and Potomac Edison, drew intense opposition for a rate case before the PSC from throughout and beyond their service territory, as solar advocates rallied against what they viewed as an attack on their energy freedom.
The utilities, Mon Power and Potomac Edison, wanted to change the mechanism so that customer-produced solar energy would no longer be valued at the same rate charged for energy provided by the companies for new net metering enrollees starting March 27.
In net metering, a residential customer owns or leases and operates a renewable energy resource connected on their side of the utility meter. If the customer supplies more energy to Mon Power and Potomac Edison than they get in a billing period, the remainder has been banked by the companies and credited to the customers in future billing cycles when they produce less energy than needed from the utilities.
The result is customer-produced energy valued at the same rate charged for energy provided by the companies.
Opponents of the initial net metering plan proposed by Mon Power and Potomac Edison argued it would discourage customer investment in solar that lowers electricity costs, diversifies the state’s energy mix and benefits the environment.
FirstEnergy has said the proposal was appropriate to keep other customers from subsidizing net metering customers. A witness for the PSC’s Consumer Advocate Division, an independent arm of the PSC representing residential ratepayers, supported the utilities’ proposal, estimating residential net metering customers generated nearly $1.5 million in subsidies paid for by non-net metering residential customers from January 2019 through August 2023.
Mon Power and Potomac Edison wanted to credit a customer’s account at a wholesale market price approved annually in fuel cost rate proceedings, proposing a residential credit of roughly 6.6 cents per kilowatt-hour.
In their agreement that includes groups that opposed their original proposal — the West Virginia Citizen Action Group, Solar United Neighbors, Energy Efficient West Virginia and Jefferson County- based solar installer and developer Solar Holler LLC — the utilities agreed to propose a credit of roughly 9.3 cents per kilowatt-hour.
Per the agreement, customers who generate their own power that submit an online application or interconnection request form to the utilities by Dec. 31, 2024, and receive a completion certificate by Dec. 31, 2025 (for a residential customer), or by June 30, 2026 (for a nonresidential customer), will be credited at the retail rate for the metered energy they produce and deliver to the utility electric system.
If approved by the PSC, credit rates would remain unchanged for two years starting Jan. 1, 2025, with credit rates for calendar year 2027 to be determined in the utilities’ 2026 fuel cost rate case.
In an email Sunday, Solar Holler founder Dan Conant touted customers’ ability under the proposed agreement to go solar for almost another year at a “one-to-one” rate, credited equal to how much electricity they produce and deliver, plus another year to get their systems installed.
“While no compromise is perfect, we’re pleased with the outcome of this negotiation and hope the [PSC] will agree it’s in West Virginia’s best interest,” Conant said in a separate statement Friday.
FirstEnergy spokesperson Hannah Catlett said in a statement Friday the agreement would help ensure new net metering customers pay a portion of costs related to distribution, transmission and capacity facilities they use by adjusting the credit amount that new net energy metering customers receive.
Net metering sites to be grandfathered in for 25 years
Any service locations with net metering at the retail rate would be grandfathered in at the retail rate for 25 years, measured from Jan. 1, 2025, regardless of the name on the utilities’ account.
The replacement or addition of solar panels or related equipment that results in up to a 10% or kilowatt increase in system output, whichever is greater, at a service location grandfathered at the retail rate wouldn’t affect the grandfathered status of the service location.
Addition or replacement of battery storage by the customer generating power wouldn’t impact the grandfathered status of the service location.
Under the proposal, subsequent changes to credit rates would be filed in the utilities’ annual fuel cost rate cases to be effective Jan. 1 of the upcoming calendar year. Future changes to credit rates wouldn’t change by more than 10% from year to year.
Credit rate changes would be based on costs for factors like capacity, transmission and ancillary service, and avoided costs.
The PSC Consumer Advocate Division and PSC staff are also parties to the agreement before the PSC for approval.
Per the agreement, Mon Power and Potomac Edison may perform an analysis of the costs and benefits of net metering by customers who generate power and propose changes in the next base rate case.
The agreement comes in a pending base rate case that has drawn over 1,800 formal comments to the PSC protesting the utilities’ overall base rate hike. Most of the comments comprising that unusually high sum have focused on the net metering proposal. A base rate accounts for all utility service expenses, including operating and maintenance costs, taxes and depreciation.
Mon Power and Potomac Edison reached a separate agreement with intervenors in the case last month not yet ruled on by the PSC that would result in a $105 million increase in the utilities’ base rate revenues, raising base rates by 6.4%.
PSC Chairman Charlotte Lane, a former FirstEnergy lobbyist, said last month the proposed settlement would result in an increase of $9.94 per month to the average residential customer bill for 1,000 kilowatt-hours, from $123.50 to $133.44.
The PSC held a nearly two-hour virtual public comment hearing last month at which solar customers and supporters from throughout West Virginia blasted the Mon Power and Potomac Edison net metering plan. They contending it would harm the state’s economy and environment while ripping off customers producing their own energy to unduly benefit FirstEnergy.
Mon Power and Potomac Edison net metering participation has grown significantly in recent years.
Mon Power’s number of net metering customer-generators more than doubled from 306 in 2019 to 763 in 2023, according to PSC filings. So did Potomac Edison’s, from 455 to 905 over the same span.
Mon Power and Potomac Edison serve approximately 550,000 customers in 40 West Virginia counties.
“[O]ur state will be stronger if we can all be paid fairly and if we keep doing what we’ve always done: producing energy,” Conant said in his statement Friday.
CLICK HERE to follow the Charleston Gazette-Mail and receive
