The future of small-scale renewable energy production in the Virgin Islands was discussed at length at a hearing Friday of the Senate Committee on Energy and Environmental Protection, though no actions were taken on the issue at the meeting.
Committee Chairman Craig Barshinger said his vision was to build a more dynamic energy market where homeowners and businesses could utilize solar panels to not just cancel out their electricity bills, but produce more than they need and sell the excess to the V.I. Water and Power Authority.
Barshinger introduced a bill creating a “feed-in tariff” that would allow this to happen.
Under the current net-metering program, customers are able to zero-out the consumption portion of their bill, but any excess electricity their home energy system creates is essentially given away for free.
The trade-off for customers is that it takes less electrical production under the current plan to zero-out their consumption than it would in most other areas of the country. This is because V.I. net-metering program operates under a one-to-one exchange rate: for every kilowatt-hour a homeowner produces, one kilowatt-hour of consumption is wiped off their bill.
This means that WAPA is essentially paying the full retail price of electricity for energy coming from net-metering customers.
Barshinger’s bill would end this practice and bring the V.I. net-metering law into line with those in other states, such as California and Michigan, by discounting the amount of credit net-metering customers receive for each kilowatt-hour.
Barshinger said this is a more equitable system because under a one-to-one exchange, WAPA has no way to recoup its overhead and maintenance costs from those who zero-out their bills.
WAPA Executive Director Hugo Hodge added that this drives up the cost of electricity for conventional ratepayers.
“The feed-in tariff is a way of expressing a business relationship that is sensible and fair to all parties involved,” Barshinger said.
Unlike the current net-metering program, the amount of electricity you could sell to WAPA would not be capped at a customer’s monthly consumption, and those who produce more than they need would actually receive a check from WAPA rather than a bill.
Barshinger said he envisioned people taking advantage of this system to make money and that he hoped to attract to the territory “rent-a-roof” companies, which lease rooftops from homeowners and businesses to deploy their own solar arrays to take advantage of the tariff.
Representatives from the Public Service Commission and the V.I. Energy Office joined Hodge to testify on the bill. While all three supported the concept of a feed-in tariff, none supported the bill in its current form.
One of the major sources of opposition was that the bill sought to institute a 12 percent profit for small-scale electrical producers and set the minimum amount WAPA could offer for their energy at 31 cents per kilowatt-hour.
Hodge argued this amount was artificially high. He said industrial solar producers have proposed charging WAPA closer to 20 cents per kilowatt-hour.
M. Thomas Jackson, chairman of the Public Services Commission, questioned what methodology was used to come up with that figure.
“If this bill were to become law it would heap immeasurable costs on the Water and Power Authority that will ultimately be born by already overburdened ratepayers,” he said.
He argued that bill would circumvent the authority of the PSC and weaken its ability to protect the ratepayers.
“It is a capricious insertion of overreaching legislation that skirts protective regulatory authority of the Public Services Commission, relegating the commission to a literal and legally sanctioned rubber stamp for private corporations,” he said.
Karl Knight, director of the V.I. Energy Office, submitted written testimony in which he accused the bill as being overly friendly to producers.
He condemned several sections of the bill, including one provision that would mandate WAPA pay all costs for connecting small-scale systems to the grid and another that would limit the amount of time WAPA could review application to five days.
“This bill is not written from a sustainable public policy perspective; it is written almost solely from an industry perspective and therefore does not attain the necessary balance. To do this the legislation must be written to protect the consumer, preserve the power company’s ability to meet the needs of its customers, and allow the industry vendors to prosper,” he wrote.
Barshinger conceded that the bill was not ready to move forward and said he hoped to convene a “working roundtable” with the testifiers to produce a feed-in tariff bill that would work for the territory.
In other business, the committee voted favorably on a bill that would call on the Department of Planning and Natural Resources to establish a used oil collection certification program.
Sen. Sammuel Sanes said that through discussions with restaurant owners he discovered there were few rules or regulations governing private citizens who collected and recycled used cooking oil for their own purposes, such as converting it to bio diesel to burn in generators.
He said he supported the practice but wanted to make sure it was done “the right way, the safe way.”
Representatives from DPNR, the Department for Licensing and Consumer Affairs, and the V.I. Waste Management Authority testified on the bill, though all three had mistakenly believed the bill to be directed towards used motor oil.
The text of the bill only referred to “used oil” and did not specify what kind.
After the confusion was cleared up, the bill received general support from the testifiers with David Simon, director of environmental protection at DPNR, conceding that while disposal of used motor oil is fairly well regulated, there isn’t as much attention paid to cooking oil.
Sanes promised to introduce an amendment to specify that the bill addresses cooking oil at its next hearing.
Voting to move the bill to the Rules and Judiciary Committee were Sanes, Barshinger, Sens. Diane Capehart and Clifford Graham. Sens. Clarence Payne, Alicia “Chucky” Hansen and Donald Coles were absent.