As many of you know, we’ve been following 2 rate cases, here in KY, that seek to diminish the value given to solar owners for power they put into the grid. The larger LG&E/KU case is still expected to rule by 6/30, but the ruling on the Kentucky Power rate case was filled on Friday.
Kentucky Power requested a net metering value reduction and other tariff changes in the Public Service Commission submission (CASE NO.2020-00174). The Kentucky PSC interim judgement was that KP had failed to provide sufficient evidence to justify this penal rate change.
Due to procedural rules KP was allowed to re-submit their justification for a final judgement by May 15th latest. According to the rules, they were allowed to take a risk and implement this new tariff as long as they rebate the losses to consumers should they later lose.
So, before the final ruling that happened on Friday, as of January 14th they moved (for new residential customers) from a historic 1:1 retail rate to a 3.6 cents/kWh rate of compensation. Which was a pretty savage 60+% drop.
Now, the PSC has released it’s finding and they have not found justification for that large of a drop. The ruling states that the utility should compensate solar owners at about 85% of the retail rate, which means all those that have been under compensated will now need to be credited the difference.
Here are the big take aways from Friday’s KY Power order:
- Retail rate net metering will continue under NMS II, which became effective on May 15, 2021 for new net metering systems
- Under NMS II, monthly net excess generation will receive a kWh export rate for residential and commercial NMS II customers of $0.09746/kWh and $0.09657/kWh respectively. This is only slightly less than the retail rate.
- NMS II customers will have 25 years of Legacy protection with respect to the two-part rate structure and monthly netting period.
- Adding battery energy storage won’t impact a NMS I system’s Legacy status
- Kentucky Power’s interconnection fee changes are rejected. Approved fees: Level 1(residential and small commercial): no application fee; Level 2 (larger commercial): application fee up to $100; reasonable costs up to $1,000 for an initial impact study.
We don’t know how this will impact the larger LG&E/KU rate case which will be decided by June 30, 2021 but is does provide insight into the current encouraging approach of the PSC to solar matters.