Senate Bill 214 amends Kentucky’s net metering laws to accomplish three things:
1. Increase net metering cap from 30 kilowatts to 1000 kilowatts
2. Grandfather existing customer generators
3. Change the allocation of costs among net-metering customers and all other customers to address an unfair cost shift relating to fixed costs to maintain the state’s collective grid.
What is Net Metering?
Net metering is a system under which privately-owned solar panels or other renewable energy generation is connected to a public-utility power grid and surplus power is transferred onto the grid, allowing customers to offset the cost of power drawn from the utility.
Why are these statutory changes needed?
- Under Kentucky’s existing net-metering law, all utility customers are subsidizing net metering customers.
- Current net-metering law requires host utilities to overpay for excess energy from the private net-metering facilities by crediting customer-generators at the “full retail rate” (cost of energy, plus costs to build and maintain the infrastructure to deliver the energy) for the excess energy they supply.
- The payment of the full retail rate by utilities to net-metering customer generators means that they avoid paying the costs all other utility consumers pay for the infrastructure of the electric grid.
- Kentucky’s electric utilities have been in discussions with supporters of net-metering for several years and have offered to help grow the industry (raise the cap from 30kW to 1 mW) and grandfather in existing customer-generators, in exchange for the opportunity to better align costs/eliminate a subsidy.
Impact of this Legislation
1. SB 214 would resolve the unfair subsidization of renewable energy by allowing electric utilities to utilize the ratemaking process at the Public Service Commission to more fairly allocate system costs between net-metering customers and all other customers.
2. SB 214 will not impact the approximately 500 existing customer-generators, as they are grandfathered under the bill and not affected by any proposed change in the allocation of system costs to be considered by the PSC.
3. SB 214 will positively impact economic development efforts by making possible larger renewable energy projects for large commercial and industrial customers who require access to renewable power as part of their corporate mandates or site selection criteria.
4. SB 214 does not apply to TVA or Kentucky electric utilities not regulated by the PSC.
Who Supports SB 214 ?
Kentucky’s Electric Utilities regulated by the PSC
Kentucky Association of Manufacturers
Kentucky Chamber of Commerce
Consumer Energy Alliance
VOTE YES on SB 214!
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