Update: West Virginia Governor Earl Ray Tomblin vetoed net metering legislation, HB 2201, today citing "technical issues."

“We applaud Gov. Tomblin for doing the right thing,” said Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA), in a statement. “This bill was fatally flawed. Did it end up that way for political reasons? Or was it a case of sloppy drafting? Whichever the case, Gov. Tomblin did the right thing by vetoing the bill and sending it back to the drawing board.”

SEIA does not object to investigating the costs and benefits of net metering, but does object to the notion that cost shifting is completely unjustified, Resch added. "Retail utility rates often include cost shifts that functionally serve as inter-class and intra-class cross-subsidies," he said.

Gov. Tomblin's veto message can be found here.

Our original story is below.

A bill currently sitting on West Virginia Gov. Earl Ray Tomblin’s desk would unravel the state’s budding solar market and penalize existing solar customers if signed into law, according to solar advocates.

The bill (HB 2201) requires the Public Service Commission of West Virginia to set new rules for net energy metering that prohibit cross-subsidization, defined as “the practice of charging costs directly incurred by the electric utility in accommodating a net metering system to electric retail customers to electric retails customers who are not customer generators.”

According to solar advocates, including The Alliance for Solar Choice (TASC), Solar Energy Industries Association (SEIA) and the conservative group Tell Utilities Solar Won't Be Killed (TUSK), the vague language forces the commission to look at solar only through the lens of what protects the utility monopoly, which is likely to result in unjustified fees and taxes on solar customers.

Utility representatives testified before the state legislature that the changes were not intended to impose fees on residential customers, but rather to help cover the costs of connecting solar customers to the grid. Solar advocates, however, say the unclear language leaves the door open for utilities to charge solar customers not only for upgrade and equipment costs, but for the overall costs of maintaining the grid, which would help bolster utilities' bottom lines.

Bryan Miller, co-chair of TASC and Vice President of Public Policy and Power Markets for Sunrun, called it “a totally over-the-top bill.” Unlike net metering reforms in other states, the West Virginia legislation does not include protection for existing solar customers with a grandfathering clause, which could force customers that have already invested in solar to pay punitive fees.

“The same utility that’s pushing this bill, American Electric Power, has actually supported grandfathering in other states,” said Miller. “To discriminate against West Virginia customers shows you how little they care about their customers.”

TASC recently launched campaigns against American Electric Power (AEP) in West Virginia, Indiana and Kentucky.

"The utilities are fighting tooth and nail to eliminate competition while also raising rates for their customers," said Barry Goldwater, Jr., a spokesperson for TUSK, in a statement. "When will it be enough? These monopolies are hurting consumers and West Virginia's economy by increasing rates and pushing new fees through HB 2201.”

Solar groups are calling on Gov. Tomblin to veto the bill. He reportedly has until tomorrow, Tuesday.

Repealing the RPS "a huge win"

Earlier this month, West Virginia became the first state in the U.S. to repeal its alternative and renewable portfolio standard. Through an intense lobbying effort, solar advocates were able to preserve net metering through the repeal.

Dan Conant, founder of the West Virginia-based solar financing company Solar Holler, calls the bill (HB 2001) a victory. In 24 hours, solar advocates rallied 600 people to write personal letters to every single legislator in Charleston asking them to repeal the RPS but keep net metering.

While the repeal is an important symbolic move from West Virginia’s heavily Republican legislature, it actually did very little for clean energy, he said. The original bill’s definition of “alternative energy” included burning tires, natural gas, and a number of different coal technologies that made the renewable energy requirements in reality very small.

West Virginia's mandate required utilities to generate at least 25 percent of their electricity from renewable or alternative sources by 2025. It also included a provision that allowed for net metering.

The new net metering legislation is more problematic, Conant said. Originally, a portion of the bill sought to eliminate solar leasing in the state, which was ultimately removed. As the legislation currently reads, any changes to net metering would still have to be approved by the PUC. Still, Conant is concerned that changing the existing rules could hurt solar growth in the state in the long run.

“Our concern as a community isn’t what’s going to happen tomorrow. It’s that we’ve got good net metering interconnection policies in place now, so why change it when it doesn’t need to be changed?” he said. “We’re just wary of what the utilities are trying to get at with this.”

Jeri Matheney, a spokesperson for the AEP subsidiary in West Virginia, Appalachian Power, said the bill has a simple purpose: to help set fair rates for all customers.

“The goal of the bill is to prevent cross-subsidies -- all ratepayers should not have to pay for the people who choose to put a solar panel up,” she said in an interview. “The way the rates are structured today, that does in fact happen.”

Solar advocates fighting the legislation are interstate groups backed by solar companies, and do not necessarily have the average ratepayer at heart, she added. Matheney said she did not know what the effect on rates would be of not including a grandfathering clause.

The primary concern for FirstEnergy, the other major utility that operates in West Virginia, is to improve the safety of line workers, said spokesperson Todd Meyers. FirstEnergy offered an amendment to the bill that requires a visible disconnect point between the generating system and the utility’s distribution and transmission infrastructure.

“Back feed from small generating systems onto our lines can be extremely dangerous, even life-threatening, for our employees,” said Meyers. “We must be able to confirm whether or not a system is disconnected so we can perform our work safely.”

Christian Coalition throws weight behind solar

West Virginia is not unique. Battles over how to set solar policies are also being waged in other states.

A bill currently working its way through the Indiana state legislature, for instance, would allow the Indiana Utility Regulatory Commission to impose “certain tariffs, rates and charges” on customers using distributed generation.

In an interesting move, the Christian Coalition of America announced its support for the solar industry last week in a post on its website. The religious group weighed in on the Indiana debate, saying it supports efficiency and homegrown energy sources that keep dollars within the state. The Tea Party is also campaigning for favorable solar policies in Indiana and other states.

“Indiana’s utilities are interested in keeping us reliant on traditional fuel sources that hurt our national security and weaken our economy,” wrote Christian Coalition President Roberta Combs. “We must allow homes, businesses, public organizations, and churches to create local, American power by installing solar.”

Solar projects are becoming popular among churches in Indiana. Conant said the same is true in West Virginia, where there have been community-funded efforts to install solar projects on church rooftops.