WKYT Investigates UPDATE | Decision deferred on power company’s proposed changes to solar credits

FRANKFORT, Ky. (WKYT) - State regulators have deferred a decision on how much Kentucky Utilities can credit customers with their own solar panels for the extra energy they feed back to the grid.

KU, which serves approximately 533,000 customers in 77 counties, is one of several utility companies across the commonwealth that had asked the Public Service Commission for permission to credit those customers less.

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In a 115-page order published Wednesday the PSC approved - with modifications - the settlement KU had negotiated with a dozen other parties that had intervened in the utility’s request for a rate increase, but did not decide on a net metering tariff, which was not part of the agreement.

In a separate order, the PSC is asking KU and others involved in the case to submit supplemental testimony “related to avoided energy cost, ancillary services cost, generation capacity cost, transmission capacity cost, distribution capacity cost, carbon cost, environmental compliance cost, and job benefits as they relate to calculating the [new proposed net metering tariff] rates.”

A date for public hearings in front of the PSC, which regulates utilities across Kentucky, is still to be determined.

In May the Public Service Commission decided its first case on the issue, when it ruled that Kentucky Power in eastern Kentucky could not credit new net-metering customers at the far-reduced rate - roughly 1/3 of the previous rate - the utility company had proposed.

Regulators decided Kentucky Power must consider the benefits of solar power - not just the costs the utility is able to avoid - in setting rates to compensate customers who have their own solar panels.

[MORE: WKYT Investigates UPDATE | Ky. regulators decide first case on value of rooftop solar power]

A 2019 state law changed the rules for net metering, which is defined as the difference between the dollar value of energy used by a customer with solar panels, and how much excess energy they generate, feed back to the grid and sell to the utility.

Under the new way of doing things, it is up to the Public Service Commission to approve or reject the amount that individual utility companies now want to credit net metering customers for the extra power they generate. Utility companies are “entitled to implement rates to recover from its eligible [net metering customers] all costs necessary to serve” them, according to the text of the law.

Before, it was basically a one-for-one trade. The utility company would buy back the extra solar energy generated at the same rate of the energy they are selling - the retail rate, or what has been roughly about a dime per kilowatt-hour in bill credits.

Advocates have worried that reducing the net-metering tariff to a far lower rate would hurt the expansion of an energy source they say needs to grow. But utilities claim that keeping things the way they are will only push higher costs onto other customers.