Last Wednesday, the Kentucky Senate passed legislation that changes the way utilities reimburse owners of solar power systems for the electricity they add to the power grid.

The vote was 23-12.

Senate Bill 100, which is on a fast track for passage, then went to the Kentucky House of Representatives for consideration.

On Friday morning, the House approved the bill on a vote of 71-24.

But it has to go back to the Senate this week because the House made some changes.

The Associated Press said the House version would "let the Kentucky Solar Industry Association intervene in the ratemaking process on behalf of customers, giving them more firepower when they face off against the utility companies."

And, it said, "when setting the rates, the House version would require the commission to consider not just the utility companies' costs, but also the benefits they get from solar power generated by their customers."

Clint Merritt, owner of Daviess County-based Driven Solar, said the bill is "not that different from House Bill 227 last year."

That bill, which died in the Senate Natural Resources & Energy Committee, would have allowed utility companies to use wholesale prices of electricity rather than retail to credit homes with solar panels that produce excess energy.

The solar industry said the bill would lower the compensation utilities give customers with solar panels from 10 cents for each kilowatt-hour of electricity the panels produce to 3 cents.

But existing customers would be grandfathered into the old rate for the next 25 years.

Likely a rush to buy

It was the fear that the rate would be changed that led to a surge of interest in solar and allowed Merritt to quit his job in May and start devoting his full time to his solar installation business.

Passage of Senate Bill 100, he said, "would probably mean a rush for me this year. But that's not the kind of rush I want."

The new legislation would also grandfather the rates paid homeowners for 25 years if the solar panels are installed before Jan. 1, Merritt said.

The bill was introduced in the Senate on Monday, won passage on Wednesday, went to the House on Thursday and was approved by the House on Friday with the amendment.

Sen. Brandon Smith, a Hazard Republican, sponsored the bill along with Sen. Matt Castlen, an Owensboro Republican.

Smith said in a news release that state law requires electric utilities to buy excess power at full retail electricity rate, calculated to include the fixed costs of poles, wires, meters and advanced technology that make the electric grid service reliable.

He said the problem is that when net metering electric customers are credited at the full retail rate, they effectively avoid paying to maintain the grid.

That cost is left to everyone else, Smith said.

Sen. Robby Mills, a Henderson Republican, said in the release, "We took this piece of legislation, met with both sides, worked on it through the interim and came to what I consider a very good solution for both sides. It is a compromise. It is what government should be.”

He said grandfathering in the rates to homes that are using solar energy on Jan. 1, 2020, is a good idea.

After that, Mills said, rates would be set by the Kentucky Public Service Commission.

"I'd like to see a real world estimate of the cost to utilities for maintaining the grid with solar power," Merritt said. "They want to charge $20 a month. Over the 25-year period that's $6,000."

Kenegy doesn't buy electricity from customers. It gives them credits.

Its website says, "Net metering allows members to interconnect small, renewable energy sources, such as a solar system, with the electric cooperative’s power grid. Members’ bills are then based on the net, or difference, between what is consumed and produced on site. Any excess power produced will offset future power consumed."

It adds, "Net metering allows most Kentuckians to produce enough power to offset their bill, by making power on their own. No one wants to be a power company, just to make enough power to serve their own small needs."

Merritt said, "We agree. No one in the past couple years has actually wanted to put more panels on than needed and draw a check from the power company. We agree that without the grid this wouldn’t work, so the minimum fee for ‘renting’ you a battery bank should be looked at. If change is needed, it needs to be discussed and researched publicly, and all the cost involved would drive the rate change accordingly."

He said, "Being able to sit down for a true and honest discussion with the experts about all costs associated with managing the grid would be incredibly beneficial in determining the minimum costs charged for using net metering. The study would need to be monitored by unbiased groups."

Keith Lawrence, 270-691-7301, klawrence@messenger-inquirer.com

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