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Entergy Corporation : Regulators In Two U.S. States Reject Lower Payments To Solar Homes

07/08/2013 | 03:52pm US/Eastern
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--Changes to 'net metering' policies rejected in Louisiana and Idaho

--Decisions suggest uphill battle for utilities looking to alter policies

--Idaho regulators said the changes could 'discourage investment'

By Ryan Tracy

Regulators in two states recently decided against lowering compensation for solar-system owners, results that suggest electric utilities may have difficulty reducing payments to a fast-growing sector that is cutting into their revenue.

The Idaho Public Utilities Commission last week rejected a proposal to raise monthly fees paid by homeowners and small businesses that install solar panels, denying a petition from Idaho Power Co., which serves Boise and other parts of southern Idaho.

That followed a June 26 decision by the Louisiana Public Service Commission to maintain payments that utilities must make to solar system owners. The commission voted 3-2 against a proposal to lower the payments that had been supported by Entergy Corp.

The two cases were part of a broader debate that has arisen with the growth of rooftop solar power and other "distributed" sources of electricity that aren't part of the traditional power grid. Utilities in Arizona and California -- two of the largest U.S. solar markets -- are also mulling proposals to alter payments to solar-system owners.

In Louisiana and Idaho, utilities purchase power from customers who install renewable-energy systems, such as rooftop solar arrays, and connect to the local electric grid. Under a typical payment arrangement, called "net metering," solar-equipped homeowners often have cheaper monthly electric bills than their neighbors because the solar homes offset their utility charges with energy produced from the sun.

When solar-system owners buy less electricity from the utility, the lost sales can cut into utility profits. A recent report distributed by the Edison Electric Institute, the main Washington, D.C., trade group for large utilities, said the growth of small-scale solar systems represents the "largest near-term threat" to the industry and recommended that utilities work to change net-metering policies like the ones under debate in Idaho and Louisiana.

Entergy and Idaho Power Co. told regulators that under current state rules, solar-powered homes aren't paying their fair share of costs like maintaining power lines and responding to outages. Solar advocates disagree, saying that solar rooftops provide benefits like reducing the need to build new power plants.

In an order issued July 3, the Idaho Public Utilities Commission said it was concerned that Idaho Power's proposal "will discourage investment in distributed generation," a category that includes rooftop solar. The regulators said solar customers may not be paying their fair share, but "more work needs to be done to establish the correct customer charge."

An Idaho Power spokeswoman said in a statement, "we appreciate that the commission acknowledged this is a valid issue" and "we will move forward to work further with our customers and other stakeholders on this matter."

Representatives of the Entergy unit involved in the Louisiana case didn't immediately respond to requests for comment Monday.

   Write to Ryan Tracy at ryan.tracy@dowjones.com 
 

Corrections & Amplifications

This item was corrected at 18:57 ET (22:57 GMT) to reflect that Idaho, not Iowa, is one of the states under which solar payment policies are under debate. This was misidentified in the original story.

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