2020’s Solar Policy Fights

Q1 2020 edition of The 50 States of Solar

April 20, 2020 (North Carolina Clean Energy Technology Center)

Executive Summary

OVERVIEW OF Q1 2020 POLICY ACTION

In the first quarter of 2020, 43 states plus DC took a total of 155 actions related to distributed solar policy and rate design (Figure 1). Table 1 provides a summary of state actions related to DG compensation, rate design, and solar ownership during Q1 2020. Of the 155 actions cataloged, the most common were related to DG compensation rules (48), followed by residential fixed charge and minimum bill increases (34), and community solar (32).

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TOP FIVE SOLAR POLICY DEVELOPMENTS OF Q1 2020

Five of the quarter’s top policy developments are highlighted below.

Iowa Lawmakers Enact Net Metering Compromise Legislation

In March 2020, the Iowa General Assembly enacted legislation extending the availability of retail rate net metering until at least July 1, 2027 or when statewide DG penetration reaches 5%. At this point, a utility may petition the Iowa Utilities Board to develop a value of solar methodology, which may be used as the basis for outflow credit rates. The bill also prohibits utilities from treating DG customers as a separate rate class until the transition point.

Rocky Mountain Power Files Net Metering Export Credit Proposal in Utah

Rocky Mountain Power filed its proposed net billing program with Utah regulators in February 2020. The proposed tariff would credit DG customers for exported generation on a 15-minute interval basis at rates varying by time of day and season from 1.3247 cents per kWh to 2.6293 cents per kWh. The export credit rate is comprised of values for avoided energy cost, avoided line losses, and integration costs.

Kansas Supreme Court Overrules Mandatory Residential DG Demand Charge

In early April 2020, the Kansas Supreme Court overruled the Corporation Commission’s approval of Evergy’s mandatory demand charge for residential DG customers. Under Kansas law, utilities may not charge customers producing their own energy more than other customers based on that distinction. The matter has been remanded to the Corporation Commission to implement this decision.

Virginia Legislators Pass Array of Distributed Solar Bills

Virginia lawmakers passed nine bills making changes to distributed solar policies during the quarter, with the Governor signing several of these into law in April 2020. The bills increase the net metering aggregate cap, call for a net metering study when this cap is reached, and increase the system size limit. The bills also expand options for community solar and thirdparty ownership.

California Public Utilities Commission rejects Utilities’ Fixed Charge Proposals

The California Public Utilities Commission issued a decision in March 2020 rejecting fixed charge increases proposed by Pacific Gas & Electric, San Diego Gas & Electric, and Southern California Edison. Additionally, the decision rejects proposed minimum bill increases, but authorizes annual increases in line with inflation. The Commission also rejected an optional high fixed charge rate option proposed by San Diego Gas & Electric.

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THE BIG PICTURE: INSIGHTS FROM Q1 2020

Proposed Legislation Focused on Expanding Distributed Solar Options

State lawmakers considered at least 130 bills related to distributed solar policies during Q1 2020. While proposed legislation in previous sessions has often featured highly controversial net metering successor bills, states’ 2020 legislative session have thus far been tamer, with compromise legislation and bills expanding distributed solar options dominating discussions. Iowa lawmakers enacted compromise net metering successor legislation during the quarter, while the Virginia General Assembly passed several bills expanding net metering, community solar, and third-party ownership options in the state. In New Hampshire, legislation increasing the net metering system size limit is pending, and New Mexico lawmakers passed a memorial requesting that the legislative council convene a community solar working group.

States Blocking Additional Fees for DG customers

In Q1 2020, policymakers and regulators in multiple states took actions blocking the application of additional charges for customer-generators. The Kansas Supreme Court overruled the approval of Evergy’s mandatory demand charge for residential DG customers. Kansas is currently the only U.S. state with such charges in effect. In Iowa, lawmakers enacted net metering successor tariff legislation that prohibits utilities from charging customer-generators additional fees that are not applicable to other customers in the same rate class. The bill also does not allow utilities to propose a separate rate class for DG customers until at least July 2027. Furthermore, in Virginia, legislators passed bills limiting the ability for utilities to assess standby charges for residential DG customers.

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States Opting for Slower, Study-Based Approaches to Net Metering Successor Tariff Development

Recently, states addressing net metering successor tariff development have been opting for slower, study-based approaches. In Iowa, legislation enacted during Q1 2020 maintains retail rate net metering until at least July 2027, when the Iowa Utilities Board may begin developing a value of solar methodology that can be used as the basis for compensating exported energy. Virginia lawmakers enacted legislation preserving net metering until increased aggregate capacity limits are reached. Once these caps are reached, the Commission is to study the costs and benefits of net metering before adopting revisions. Washington legislators pursued a similar approach last year, allowing for the creation of net metering successor tariffs after an increased aggregate cap is reached. Meanwhile, solar valuation studies are being conducted in Connecticut, New Hampshire, and South Carolina to inform net metering successor tariff development, and Idaho regulators recently rejected a net metering successor settlement in favor of conducting a comprehensive cost-benefit study

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