State House study panel hears renewed arguments between community solar advocates and Georgia Power

Caption

The Georgia Public Service Commission approved in 2024 an updated Georgia Power resource plan that includes building 1,000 megawatt solar facilities by 2027.

Credit: Courtesy of Georgia Recorder

Georgia Power and solar industry representatives renewed their long-running debate before lawmakers Tuesday over whether setting up a new solar program would provide the same benefits to ratepayers as the existing renewable energy options.

The House Energy, Utilities, and Telecommunications Ad Hoc Committee on Community Solar meeting was another chance for legislators to hear from clean energy and utility experts about their opinions on the value of community solar.

Republican-backed community solar legislation failed to pass in the state Senate and House earlier this year. The proposals would have allowed small- and mid-scale developers to participate in a community solar program regulated by the state Public Service Commission and let them build small solar arrays on Georgia Power’s turf. Subscribers would receive a credit on their electricity bill for a portion of the generation output.

Georgia Power has criticized community solar programs, citing high costs and issues with the House Bill 1152 framework, legislation that stalled in this winter’s General Assembly. A new community solar program is expected to be introduced for the 2025 session.

Bob Sherrier, staff attorney for the Southern Environmental Law Center, disputed the longstanding cost-shift argument from the utility companies and other critics of community solar who argue that passing along savings to one class of customers would saddle ratepayers who don’t participate in the program with higher bills.

Several experts said Tuesday that it’s premature to even declare there will be a cost shift when a credit amount for solar power generation has not been set. Last year, community solar legislation would’ve given state regulators some discretion on determining the value of the credit for the program.

“In Georgia there is no data backing up this argument,” Sherrier said. “And really it’s simple: the utilities oppose customer driven third-party projects like solar because it threatens to supplant utility investments and take away from shareholder profits.”

Georgia Power’s director of renewable development, Wilson Mallard, tried to make the case that customers who are receiving solar power from a developer would face a higher burden on their utility bills.

“In the 2022 rate case, Georgia Power put forth a significant amount of information on the record that does actually show paying retail for a wholesale product causes rates to go up for everyone,” he said.

Mallard said Georgia Power opposed HB 1152 because it did not give the company the ability to sign long-term contracts with developers, a requirement for making the projects economically viable, as well as other provisions of the bill.

Mallard said it was unclear how much energy capacity it would need to support a third-party community solar, which is the most expensive form of solar electricity, he said.

“It’s been said that solar is the cheapest form of generation,” Mallard said. “Well, absolutely, but it depends what you pay for it. If you can pay 3, 4, 5, 6 cents a kilowatt hour through competitive procurement, that is a really good price. Georgia Power’s residential rate of cents per kilowatt hour, averages in the 12-cent range.”

Georgia’s Power redacted the data in supporting documentation as trade secrets, so critics disputed its claim that the company provided evidence that community solar isn’t cost effective.

Community solar can also provide benefits to the electric grid that in turn is a financial benefit for the power companies along with customers, Sherrier said.

“What Georgia Power was really arguing is they lose revenue and profit when people save on their bills. The loss of revenue is not the same thing as increasing the cost for other people,” he said.

“If someone buys an energy efficient fridge that uses less power that year, Georgia Power doesn’t get to add a charge to their bill to recover the money they thought they were going to recover at the beginning of the year.”

Karl Rabago, an independent consultant and former Public Utility Commission of Texas member, said electricity suppliers should establish a community solar program that encourages the efficient use of energy and the investment in it.

Community solar customers will pay all their full electric bills, including the fixed costs to provide their services, Rabago said.

“They are fully charged,” he said. “They don’t get a discount. they don’t shift any of their costs but they do earn a credit for making a good thing happen. And getting that credit right is the job of the utility with its evidence and the PSC with its judgment.”

Rep. Ruwa Romman, a Duluth Democrat, asked Mallard how much more expensive the cost would be for the solar community program consumers.

“Just so we can get an idea, are we talking cents, dollars, hundreds of dollars? What’s the range?”

Mallard said the ballpark prices when Georgia Power contracts for projects of a similar size of 3 to 6 megawatts, the costs to generate electricity averages about 6 cents a kilowatt hour.

“The construct here in this third-party community solar would provide for compensation based on the retail rate of Georgia Power residential customers,” he said. “That’s in the 12 to 13 cent range, so basically double the price that Georgia Power can procure solar from through our competitive solicitations.”

Jonathan Roberts is a vice president of development for independent renewable power producer Soltage. He credits state regulators and the power industry for helping Georgia to rank seventh in the nation for solar generation in 2023, according to the Solar Energy Industries Association.

“I think that’s incredible,” Roberts said. “It’s a testament to the PSC and their wisdom in guiding the state. It’s a credit to Georgia Power. They are doing good work in deploying solar. But what we’re asking here today is for the community solar to find a way to help ratepayers save more money.”

This story comes to GPB through a reporting partnership with Georgia Recorder.