Louisiana mulls duplicative rules for solar
It turns large numbers of what were strictly energy consumers into small clean-power producers. By enabling individual consumers to create their own power on their own properties, it also cuts into power companies’ revenues. In an economy that’s otherwise embracing disruptive models, like ridesharing and short-term home rentals, enthusiasm over rooftop solar and other distributed electric generation technologies should come as no surprise.
Still, these disruptions can be difficult to manage. As a consequence, some states have responded with legislation designed to protect consumers who consider installing their own rooftop solar panels.
In Louisiana, lawmakers currently are considering a measure, S.B. 214, whose stated intent is to ensure homeowners “are provided with sufficient information to make an informed decision” when they purchase or lease a solar system. This would be accomplished by empowering the Louisiana Public Service Commission to “issue rules and regulations…and to provide for the effective oversight of agreements” between solar customers and solar companies.
Before creating a new set of rules to govern an industry and expanding the regulatory power of the LPSC, perhaps it should be asked — can existing state consumer and fraud protections address this problem?
The answer appears to be “yes.” Customers of Sader Power Enterprises brought a suit against the rooftop solar company in 2014, alleging Sader had overstated energy cost savings, failed to install equipment in a timely fashion and violated state licensing requirements. The Better Business Bureau suspended the company’s accreditation, and the state attorney general determined Sader had failed to submit required reports. In that case of potential fraud, the existing rules and regulations in place to protect consumers worked as necessary.
There is a real risk that additional fraud protections will be duplicative and the LPSC is almost certainly the wrong entity to carry them forward. The LPSC identifies its mission as serving “the public interest by assuring safe, reliable, and reasonably priced services provided by public utilities and motor carriers.” The agency’s clear role is to guarantee that the net-energy-metering systems made necessary by rooftop solar will not impact its other missions. It is not its role to insert itself in fraud investigations.
Make no mistake that there are broad, real and fixable problems with rooftop solar in Louisiana. A report prepared for the LPSC found that solar energy tax incentive payments have averaged $23 million per year since 2009, at the same time that the state is struggling with budget deficits. That same report identified that consumers using solar net-energy-metering systems pay just 60 percent of their total costs to the electric system. The remainder of their tab, amounting to $89 million thus far, falls on electric ratepayers, disproportionately those on the lower end of the income spectrum who cannot avoid electric costs.
The extraordinarily complex question of the costs and benefits of solar merit further investigation, because rooftop solar may also provide significant savings for the electric system. Rooftop installations reduce the amount of power a homeowner needs to draw from their power company, saving utilities some of the high cost of expanding their own generation.
No source of electric power merits special treatment and payments, nor does any source of power merit special, reactionary scrutiny. States can and should address any weaknesses revealed by the disruptive nature of distributed electric generation, but they should do so in ways that are consistent with conservative, small-government ideals.