Regulation as Conversation: A Tale of Two Net Metering Rules

pscsealIn November, the Louisiana Public Service Commission voted unanimously to approve net metering rules that will apply to all regulated utilities in Louisiana and their customers having rooftop solar installations. The enactment of the rule was the culmination of a four-plus year conversation among solar advocates, the utilities who fear them, consumer advocates and regulators as they sought to identify and claim the common ground that would provide some clarity to all stakeholders at the intersection of utilities and solar power user/generators.

Casey DeMoss, CEO Alliance for Affordable Energy
Casey DeMoss, CEO
Alliance for Affordable Energy

Casey DeMoss was in the thick of those conversations at the PSC. She and the Alliance for Affordable Energy brought the technical expertise to the table from the consumer side of the discussion. Through persistent persuasion, DeMoss and solar advocates and solar users were able to move commissioners away from positions of outright opposition to solar power that had shown itself in votes on net metering and solar tax credits as the conversations got started.

One of the key players who enabled the final net metering rule was Commissioner Clyde Holloway who died this year. Holloway was an outspoken opponent of solar tax credits to the point where he gave the appearance of being opposed to solar power itself.

DeMoss says in our interview that Holloway actually wanted consumers to get a fair break on net metering rules as he came to recognize the fact that solar panel owners actually help utilities during peak load times by producing excess power of their own. This eased his concern about solar panel users driving up the cost of power for those who do not have the panels.

DeMoss says it was Holloway who worked the commission in the final year of his life to achieve the consensus reflected in the 5-0 vote on the PSC’s net metering rule. Net metering is the framework that enables solar panel users to sell power to utilities while still helping the utilities pay a portion of their fixed costs like wires, poles and some generation costs that enable those solar customers to get backup power from utilities.

aae-logowebPart of the reason consensus was reached was directly tied to the regulatory process. All the investor-owned utilities in the state were parties to the rule making process. The Alliance and solar companies in Louisiana staked out their positions and over the course of years of conversations reach a point where a commonality of interests could be addressed.

DeMoss says no one got everything they wanted, but that all parties got enough of what they wanted to believe they got a fair deal.

Process matters.

Contrast that to the recent fiasco with LUS and its net metering rule. LUS has the unfortunate timing of having introduced its proposed net metering change as part of a system-wide rate hike package in August right after the the great flood swept the parish. While the matter went to the Lafayette Public Utilities Authority and then the full LCG Council, it was done in a matter of weeks, not years. Without that give and take within the framework of a genuine regulatory authority which has technical staff that can sift through and sort the validity of claims made by all parties, the LPUA and LCG Council are, in effect, rubber stamps for whatever proposals come from LUS.

Generally, this is not a problem, but in the case of the net metering rule here it quickly became evident to the 250 or so LUS customers who use solar panels that the rule was trouble. They felt blindsided. LUS was caught flat-footed by the blowback and ultimately asked the LPUA and the LCG Council to rescind the net metering portion of the rate increase that had already been approved and was about to take effect.

No utility or utility customer can legitimately say they will have been blindsided by the new PSC net metering rule. Again, process matters.

It is clear from the ‘solar tax’ episode that LUS would benefit from some form of sustained oversight or direct community engagement. Ramping up the LPUA might be part of the process. LUS is part of a broad group of municipally-owned power companies in the state — the Louisiana Energy & Power Authority. Maybe there are examples in other states of how to effectively engage municipally-owned utilities in conversations with their owners (the citizens their respective communities) so that policies enacted can reflect the input and even consent of their citizen/customers.

Process matters. The success of Casey DeMoss and the Alliance for Affordable Energy on net metering at the PSC is proof positive. We talk about all of this and more in the podcast.

 

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