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Federal court challenge looms over Alabama solar panel fees

June 4, 2021 GMT

MONTGOMERY, Ala. (AP) — A federal regulatory group will not take action against the Alabama Public Service Commission over fees allowed on home solar panels, but the group’s chairman expressed concern that the state might be violating federal law designed to encourage alternative energy sources.

The Federal Energy Regulatory Commission rejected a request from environmental groups to take enforcement action against the Alabama regulators that approved Alabama Power’s fees on home solar panel s and other home power generation. However, two members of the five-member panel, Commission Chairman Richard Glick and Commissioner Allison Clements, issued a separate statement Wednesday to express concern that Alabama regulators may be violating federal policies designed to encourage the development of cogeneration and small power production facilities and to reduce the demand for fossil fuels.

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Their statement expresses a concern “that the Alabama Public Service Commission may be violating the Commission’s (Public Utility Regulatory Policies Act or PURPA) regulations, undermining the statute’s purpose of encouraging qualifying facilities.”

Alabama environmental groups said Thursday that they are prepared to pursue action in court.

Homeowners and an environmental groups have been trying to challenge Alabama Power’s fees on home solar panels and other independent energy production, arguing that the fees purposely discourage the use of solar in the sun-rich state.

“We are now prepared to take the next step of seeking relief from a federal district court so that Alabama Power customers can finally reap the benefits of solar to the same degree as customers in other solar-rich states,” said Keith Johnston, director of Southern Environmental Law Center’s Alabama office.

Michael Hansen, executive director of the environmental group GASP, said Alabama’s unjust, discriminatory treatment of solar customers is stifling solar growth across the state and undermining PURPA’s basic aim of encouraging the development of solar.

The Alabama Public Service Commission upheld the fees, which Alabama Power says are needed to maintain the infrastructure that provides backup power to customers when solar panels don’t provide enough energy.

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Alabama Power charges a $5.41-per-kilowatt fee, based on the capacity of the home system, on people who use solar panels, or other means, to generate part of their own electricity. That amounts to a $27 monthly fee on a typical 5-kilowatt system. The average solar panel setup for a home costs about $10,000, according to the Environmental Law Center. The fees add another $9,000 or so over the 30-year-lifespan of a system, dramatically increasing a homeowner’s cost and reducing any financial benefit they see from solar.

Alabama Power did not immediately respond to an email seeking comment, but a spokeswoman said earlier this year that the fees are needed to maintain the power grid.

“Customers with on-site generation who want backup service from the grid should pay the cost for that service. If not, other customers unfairly pay the costs for those individuals and businesses,” Alabama Power spokeswoman Alyson Tucker said in April.

Experts for environmental groups said the charge is unjust and eliminates much of the savings that customers expect to realize for their investments in installing solar panels.