Solar advocates decry Alabama Power backup service fees at PSC meeting

residential solar panel

Environmental groups on Thursday challenged Alabama Power’s fees on the solar users who also choose to maintain Alabama Power accounts for backup power. The utility maintains that the fee is necessary to recover the costs of energy production to be able to provide the backup power when needed.

The Alabama Public Service Commission held a hearing on the petition to abolish the fee. Commissioners heard both the utility giant’s defense of the fee and advocates’ contention that it is unprecedented and purposely discourages the use of solar panels in a sun-rich state. Commissioners will likely not rule until next year.

Alabama Power charges a $5-per-kilowatt fee, based on the capacity of the home system, on people who sign up for their services in addition to their personal use of solar panels, or other means, to generate part of their own electricity. That amounts to a $25 monthly fee on a typical 5-kilowatt system.

An energy expert testifying on behalf of petitioners said the charge “eliminates much of the savings that customers expect to realize for their investments” in installing solar panels.

“The charges are one of the principle reasons sun-rich Alabama trails other states in solar development,” Karl R. Rábago, of the Pace Energy and Climate Center, testified. “I know of no other investor-owned utility that assesses a charge this punitive for backup service.”

Alabama Power said the fee is charged to maintain infrastructure to provide backup power when the solar panels don’t provide enough energy. The utility is asking to increase the charge to $5.41.

“If they don’t produce, I have to stand ready to serve them,” Alabama Power pricing manager Natalie Dean testified at the hearing.

“The bottom line of this is there is cost to providing this backup service,” Alabama Power spokesman Michael Sznajderman told reporters. Sznajderman noted that fee applies to all means of home power generation, not just solar.

Fewer than 200 Alabama Power customers pay the fee.

The Southern Environmental Law Center and a Birmingham-based law firm, Ragsdale LLC, filed the complaint on behalf of two people and Gasp Inc., which advocates energy production that reduces air pollution.

The average solar panel setup for a home costs about $10,000, according to the environmental law center. The fees add another $9,000 or so over the 30-year-lifespan of a system, dramatically increasing a homeowner’s cost and reducing any financial benefit they see from solar, the law group said.

“This is a huge hurdle to residential rooftop solar in the state. It’s really curtailing its use and it’s holding Alabama back,” said Keith Johnston, managing attorney for the Southern Environmental Law Center’s Birmingham office.

Teresa Thorne, 65, had a four-kilowatt system installed on her roof in Blount County, Alabama. She told The Associated Press earlier this month that fee, “cuts my savings in half.”

Solar energy proponents packed the meeting caravanning from Blunt County and Birmingham with many wearing “Let It Shine” stickers. When asked who purchased the stickers and paid for the buses no one was able to articulate the source of the funds.

At least three audience members were ejected for ignoring multiple requests from law enforcement and the hearing judge not to record or livestreaming the proceeding with their phones. Two were allowed back after a break in after voluntarily allowing law enforcement to hold their phones for the remainer of the hearing.

The ejected audience members included Rob Burton, a member of the Birmingham Land Bank, Laura Casey, a Democratic candidate for PSC president, and Kari Powell, who ran for PSC last year. All said they believed they were within their rights to record the meeting under state law. The PSC contended that recording was not allowed.

Casey said supporting solar “makes sense for Alabama.” Alabama Power maintained that the fees being challenged do not limit solar but instead provide a valuable service to solar customers who choose to use them. 

Republished with the permission of the Associated Press.