Appalachian Power Company requests reduction to pay rate for net-metering solar customers
Utility wants to avoid cost-shifting to non-participants. Solar advocates say its the wrong move.

By: Charlie Paullin - September 13, 2024 5:34 am

The state’s second largest utility serving a majority of Southwest Virginia is asking state regulators for a 70% reduction in the pay rate for customers who generate their own electricity and sell excess amounts back to the company. The request could stifle residential customers’ adoption of solar in the region, proponents of the zero-carbon energy source say. ... Appalachian Power Company submitted the request to the State Corporation Commission Aug. 30 as part of a new rulemaking process required by the Virginia Clean Economy Act, a law seeking to decarbonize the utility’s grid by 2045. The process governs the program known as net-metering, which took off in 2017.

Net-metering allows residents and companies to install generation sources on their roof or property to provide the electricity they would otherwise need to pull from the utility’s grid. In APCo’s territory, those generation sources have mostly been solar panels. ... The homes and businesses sell back to the company whatever amount of electricity they generate beyond what they need, and net that revenue against their costs for energy they may pull from the utility when their source isn’t producing, resulting in savings or credits that can be applied to a future month’s bill.

Appalachian Power is currently paying those participants $0.16 per kilowatt hour for the excess power they generate, and wants to grandfather them for 25 years, while offering new participants $0.04 per kilowatt hour. ... For a customer who needs about 1,000 kilowatts of electricity, and generates 1,057 kilowatts through their panels, the change would result in a monthly bill increase from $7.96 to $66.95. An APCo customer who doesn’t participate in net metering faces a monthly bill of $174 under current rates, which may go up again, despite resident and legislator opposition.

The rate change also reflects a change in netting methodology for new participants. ... Under the old system, the customer would generate a total amount of electricity for a given month and net that against the power they pulled from the utility when their source was not generating enough, which happened 80% of the time in a year and resulted in the savings, according to the utility. ... The new methodology would compensate a customer for the excess energy they send back to the grid, at the new rate, and then charge them, at standard rates, for the energy they pull from the utility when their generation source wasn’t meeting their needs.

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Charlie Paullin
Charles Paullin covers energy and environment for the Mercury. He previously worked for Northern Virginia Daily in the Northern Shenandoah Valley and for the New Britain Herald in central Connecticut. An Alexandria native, Charles graduated from the University of Hartford initially wanting to cover sports. He's received several Virginia Press Association awards for his coverage of crime, local government and state politics.

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