WKYT Investigates UPDATE | Regulators deny KU solar credit proposal

FRANKFORT, Ky. (WKYT) - State utility regulators denied a Kentucky Utilities proposal to credit far less to new customers who decide to install solar panels on their home.

The Public Service Commission instead set rates to credit those customers at roughly seven cents per kilowatt hour ($0.07366 per kWh) for the excess power they feed to the grid.

While that is below the previous rate (which was around a dime per kilowatt hour), it is still significantly higher than the rate KU had proposed: a little over two cents per kilowatt hour.

The PSC published its order last week.

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 solar customers less.

“We have said all along that we support solar and private generation systems, we just did not want our customers who cannot afford - or do not want - private generation systems to subsidize those who do,” Chris Whelan, LG&E/KU’s vice president of communications and corporate responsibility said Thursday in a statement provided to WKYT. “To that end, we would have preferred for the rate paid for the excess energy generated by private generators to be in line with what it costs us to generate our own energy or purchase it from other sources.”

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In July, regulators deferred a decision on how KU would handle net metering, requesting additional testimony and data. A supplemental hearing was held in August.

The decision cited several “guiding principles” developed by the PSC in its Kentucky Power decision, the first solar net metering case of its kind in Kentucky, which was being closely watched for its potential to set precedent.

That case had a similar conclusion, although the commission established higher rates (between nine and 10 cents per kilowatt hour) for bill credits to Kentucky Power customers.

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 new 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 had 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 were would only push higher costs onto other customers.