Wyoming lawmakers resuscitated an effort to overhaul the way the state regulates small-scale solar and wind energy installations. A piece of legislation advanced Tuesday could have significant repercussions on small energy businesses and residents hoping to invest in renewable energy.
The bill approved on Tuesday at one of the Wyoming Legislature’s standing committee meetings would repeal the current net metering system and task the Public Service Commission with installing a new one that keeps utility rates fair for all Wyoming residents.
The commission would be better prepared than Wyoming’s Legislature to establish a new system in the interest of all ratepayers, lawmakers on the Corporations, Elections and Political Subdivisions standing committee reasoned. To its supporters, the bill reforms an imbalanced system, one that subsidizes independent electricity generators at the expense of the majority of ratepayers.
But solar energy operators and advocates of Wyoming’s budding clean energy sector aren’t so sure.
If signed into law, Senate File 16 would generate a great deal of uncertainty for the future of residential renewable energy in Wyoming, opponents said during testimony. Some said the bill could even kill it.
What is net metering anyway?
The state’s current net metering system was adopted about two decades ago and applies to small-scale energy generators — think Wyomingites with small wind turbines in their backyards, or solar panels on their roofs.
For many, the investment is a practical one.
Over time, homeowners can save money on their energy costs. Excess power can be sold to utilities and the independent electricity generators receive a credit.
But Tuesday’s bill effectively scraps that system and punts the issue to the state agency responsible for regulating utilities.
If ultimately passed, the legislation would no longer require utilities to compensate customers generating excess electricity. Instead, a new, yet-to-be-determined system would be adopted by the Public Service Commission, the regulatory body charged with keeping electrical rates affordable and power reliable for customers.
Proponents of Senate File 16 argue net metering customers receive a subsidy under the present system. By not paying the same level of fixed fees as other utility customers, net metering customers shift costs onto the rest of a utility’s ratepayers. Some fear that utilities’ fixed costs will only continue to climb, and the majority of ratepayers will be stuck with higher rates.
“It’s the position of our company that a subsidy does exist,” said Jon Cox, a spokesman for Rocky Mountain Power, the state’s largest utility. He noted the company could purchase more affordable utility-scale solar and wind energy in the open market, rather than having to purchase excess energy from net metering customers, as current law requires.
Bryce Freeman, an administrator with the Wyoming Office of Consumer Advocates, said the current net metering system was simply not sustainable.
“It will eventually lead to rate impacts on customers who don’t generate their own electricity,” he said. “And the ones I worry about most in the state are low-income customers.”
The Office of Consumer Advocates and big utilities like Rocky Mountain Power and Black Hills Energy, ultimately expressed support for the legislation.
Cox, of Rocky Mountain Power, called the legislation a “step in the right direction.”
But opponents of the bill have maintained that the subsidy, when it does exist, is negligible. Plus, they argue, residents investing in clean energy, or businesses coming to Wyoming to expand the rapidly growing sector, should be encouraged, not deterred, by the state.
Steff Kessler, a senior conservation advocate at the Wyoming Outdoor Council, said the bill would threaten the livelihoods of approximately 150 workers in Wyoming’s solar energy sector, not to mention the over a dozen businesses currently installing small-scale renewable energy.
“It essentially kills this industry,” Kessler said of the bill. She requested that the committee table the bill and take the time to research the issue more deeply.
Laramie City Councilman Paul Weaver testified to the benefits that solar energy provided the city and Albany County, including long-term job growth, maintenance of municipal services and overall cost savings.
“These renewable projects are a valuable option for cities,” Weaver said. He stressed the need for lawmakers to study Wyoming’s net metering system more before hampering municipal governments’ efforts to save on energy costs.
“Gather some more information and find ways to get some answers without impacting the ability of the cities and towns to achieve savings and possibly stretch those revenues locally,” he said. “We’re going to need to make every penny count.”
Monika Leininger also rejected the bill. Leininger is an organizer with the Powder River Basin Resource Council, a agriculture and conservation organization supporting landowners, including some residential solar owners. Senate File 16 creates unfair uncertainty for the renewable energy industry in Wyoming, she said.
“Though we hear these concerns about cost-shifting, we’ve never chosen to formally study the issue, and therefore we do not know the impact on non-solar ratepayers in the state,” she said. Cost shifting occurs if one group of consumers, in this case small energy generators, shifts certain expenses onto utility ratepayers.
Leininger also said the number of residents with solar energy installed at home remains relatively small in Wyoming — less than 1% of rooftop solar energy integration in the state. The group also offered several suggestions to clean up the timeline initially proposed by the bill.
Other critics noted myriad other inequities in utility systems, saying those present in the state’s net metering system were inconsequential.
Before voting to advance Senate File 16 on Tuesday, lawmakers amended the legislation to allow more time for the Public Service Commission to create a new system. The bill would also grandfather in net metering customers who have installed wind or solar systems before July 1, 2022.
Where the bill came from
Senate File 16 was born back in November. Wyoming Legislature’s Corporations Committee initially held a meeting to debate an entirely different bill that would have amended the net metering system in place in Wyoming.
But lawmakers jettisoned the bill in short order, before public comment or much discussion among legislators. Instead, Sen. Cale Case, R-Lander, introduced a new bill. This one would leave the thorny issues of net metering to Wyoming’s Public Service Commission. What followed was about three hours of impassioned public comment, overwhelmingly against the bill. Nonetheless, the bill advanced to a standing committee meeting.
On Tuesday, it landed before lawmakers once again.
Efforts to repeal or amend the state’s net metering statutes are not new. Draft bills aiming to tweak the net metering system have been introduced at least half a dozen times since 2001. But few have managed to pass.
The Wyoming Legislature will reconvene virtually for eight days to consider the worked committee bills beginning on Jan. 27.