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Dominion wants SC solar users to pay more. Opponents say plan is 'industry killing.'

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Rooftop solar

Dominion Energy is asking to increase what it charges each month to customers who generate their own electricity from solar panels. File.

Dominion Energy and South Carolina's solar industry are at odds over how much money homeowners and businesses should be required to pay the utility after installing panels and creating their own electricity.

The two sides are set to face off in a hearing in front of the S.C. Public Service Commission in late February that will decide what the company can charge new solar customers within its service territory, which covers areas around Charleston, Columbia, Beaufort, Orangeburg and Aiken.

Dominion, which acquired South Carolina Electric & Gas in early 2019, is proposing several changes that would increase the monthly costs that solar customers pay for being hooked up to the utility's power grid.

The energy giant, which is based in Richmond, Va., also wants to alter the way solar customers are credited for the excess power they produce and send back onto its lines.  

Those changes won't immediately affect Dominion's roughly 11,200 current solar customers. They'll be able to keep their current pricing arrangement until 2025 or 2029, depending on when they first installed their panels. 

It will, however, affect any Dominion customer who installs new solar panels after June 1. 

Keller Kissam, Dominion's president of electric operations in South Carolina, said the utility supports the expansion of solar power throughout the state. But the changes, he said, are needed to ensure that segment of the market is paying its fair share for maintaining and operating Dominion's electrical system. 

"That is the crux of the matter," Kissam said last week. 

Power play?

Some of the businesses that make their money installing panels on homes and businesses in South Carolina are pushing back. They describe the proposed changes as a heavy-handed attempt to kill the industry and tamp down competition. The additional fees that Dominion wants to add, they said, will make it difficult to convince homeowners and businesses to invest in solar energy in the future. 

One of the primary reasons for choosing solar as an alternate power source is to cut electricity bills. The decision comes down to math. Homeowners and businesses generally expect the savings will help them pay off their upfront installation costs. 

That financial calculus could be thrown in disarray if Dominion gets its way, several advocacy groups and solar companies told the Public Service Commission. 

“We are deeply disappointed that Dominion continues to advocate for policies that hurt home solar, and takes away decision-making for people to choose their own power," said Tyson Grinstead, Southeast policy director for Sunrun, a publicly traded California-based company that provides rooftop solar to homeowners in more than 20 states. "We hope that the Public Service Commission weighs the benefits of customer choice and home solar in their decision on Dominion’s anti-solar proposal." 

Under the proposed pricing structure, the fixed cost that Dominion charges solar customers would increase significantly. For homeowners that buy or lease solar panels, their monthly cost would increase to $19 from $9. The charge for businesses would jump to $32.50. 

The utility also wants to add a "solar subscription" fee that would be calculated based on the number and size of the solar panels that customers install. 

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Under that proposal, homeowners would pay an additional $5.40 for every kilowatt of power their panels are capable of producing. Businesses would see their price tick up by $6.50 for every kilowatt. 

On average, a residential solar array in the U.S. can generate around 5 kilowatts, according to earlier reports by the Solar Energy Industries Association. That means those owners would pay an extra $27 per month under the subscription fee. 

Alder Energy, a Charleston-based company that installs panels for businesses, called the fee plan and the way Dominion wants to credit solar customers "outrageous, "disastrous" and "industry-killing." 

Alder CEO Donald Zimmerman told the PSC that most commercial or industrial customers want to recoup their investments in their panels in less than eight years. But with the new charges Dominion is seeking, that payback period would be much longer, he said. 

"Only one conclusion can be drawn: Dominion intends on punishing businesses that want to generate their own electricity," Zimmerman told the commission in written testimony. 

Balancing act

The dispute between Dominion and the solar companies stems from a 2019 law passed by the S.C. Legislature.

That law lifted a cap on how many power users could install panels in South Carolina. It also required regulators at the PSC to review the business relationship between the for-profit utilities in the state and their solar customers.

As part of that review, lawmakers instructed the commission to make sure that any increase in the use of solar power didn't push more costs onto other utility ratepayers. 

Kissam, the Dominion executive, said that's exactly what the company is looking to address now. The extra revenue it's asking to collect is needed to make sure solar customers are contributing to the cost of maintaining power lines, utility poles and generating stations, he said.

The money will also help to cover other expenses, such as a new group Dominion created to help manage the fluctuating amounts of electricity that flow onto the grid each day from small rooftop panels and large industrial-scale arrays. The more solar that is connected to Dominion's system the harder and more expensive it becomes to balance that electricity supply, Kissam said.

"Solar is a good thing to have on our system. It's good. I welcome it," Kissam said. "But understand: My job is to coordinate it on our system safely and reliably. That's what this is about." 

Solar advocates agree that the state law called for the PSC to determine how to fairly allocate costs between solar and non-solar customers. They also point out that lawmakers intended for that bill to expand the use of rooftop solar and grow the market for the renewable energy. That won't happen if Dominion gets its way, they said. 

The commission is expected to issue its decision April 5. 

Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.

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