The Missouri solar industry has uncovered an allegedly fraudulent installer who may have caused a premature cutoff of solar rebates, which could affect the state net metering program.

The Missouri Solar Energy Industries Association (MOSEIA) filed a request with the state Public Service Commission for an audit of U.S. Solar and the handling of solar rebates made to it by Kansas City Power and Light (KCP&L), the dominant investor-owned utility in eastern Missouri and western Kansas.

A June 3, 2013 letter

from MOSEIA Executive Director Heidi Schoen to KCP&L VP Charles Caisley reported that U.S. Solar had been expelled from the solar industry trade organization on March 20, 2013 “due to suspected ethics violations and possible unlawful actions.” According to Schoen, the letter has gone unanswered.

An ethics complaint to MOSEIA from a customer identified to KCP&L but not to the public presented the following evidence:

  1. The customer was given a quote for an 8.46-kilowatt system by U.S. Solar and completed and signed an application
  2. U.S. Solar submitted an application to KCP&L for a 16.45-kilowatt system and for a $32,100 rebate
  3. U.S. Solar installed an 8.45-kilowatt system for the customer
  4. A check from KCP&L for $32,100 was sent to U.S. Solar and cashed

In addition, MOSEIA reported, no other solar installer has been able to get KCP&L to send them rebate checks.   

There are “many similar examples,” according to the MOSEIA letter to KCP&L, “and we believe KCP&L is aware of many of them.”

MOSEIA’s letter requested that KCP&L:

  1. Suspend all U.S. Solar rebate and interconnection applications
  2. Review all U.S. Solar applications and take “whatever steps are necessary to protect the solar rebate program”
  3. Make sure “overpayment of rebates does not count against the retail rate impact”

“Based on the information we have available, we strongly believe the Missouri Public Service Commission should conduct an independent audit,” Schoen stated. “We also believe that such payments should not be included in KCP&L’s calculation of any retail cap.” 

One of the biggest installers in KCP&L’s territory told GTM he believed U.S. Solar was able to obtain checks while other installers had not because the one individual who signed and sent out rebate checks at KCP&L was cooperating with the company.

Another, simpler explanation, said national SEIA and MOSEIA representative Susan Brown, is basic incompetence at KCP&L. Brown’s explanation substantiated reports from installers that KPC&L regularly took longer than the legally allotted 90 days to process interconnection and rebate applications, while installers in western Missouri reported that Ameren, the area's dominant utility, regularly handled the same paperwork in two to four weeks.

Of greater concern to KCP&L territory solar installers is the possible cutoff of the utility’s solar rebate program.

The program was instituted statewide by a 2008 ballot initiative. It set rebates at $2 per watt. A broad interpretation of the initiative’s language holds that the rebate program came with a cap if payments by KCP&L or Ameren increased ratepayer bills by more than 1 percent.

Ameren has stated publicly it is nowhere near the cap.

According to KCP&L, it paid $357,835 in rebates in 2010, $2,656,960 in 2011, $12,440,834 in 2012 and $9,420,048 through the beginning of June of this year.

MOSEIA’s allegation to KCP&L of “many similar examples” of inflated rebate payments led to its concern that the utility “protect the solar rebate program” and not count “overpayment of rebates” to U.S. Solar toward the cap.

Several reports, including one from the Kansas City Star, put the amount of rebates that would trigger the 1 percent cap at $21 million. While the Public Service Commission has not yet acted to force an audit, MOSEIA members claim fraudulent overpayments to U.S. Solar could be in the millions of dollars.

A KCP&L filing with the PSC on June 3 proposed shifting rebate payments due after September 3 to January 2014.

“We have to follow the law,” KCP&L’s Caisley told the Star, “and protect the 99.9 percent of our customers who are not getting solar.”

KCP&L should also not be invoking the cap, MOSEIA’s Brown explained, because a separate compromise was signed into law by Missouri Governor Jay Nixon that will gradually phase out the rebates by 2020.

The Commission’s staff ruled that the utility’s filing was deficient, which temporarily delayed the curtailing of rebates.

At the same time, Caisley called for ratepayer protection when he included net metering in his defense of KCP&L’s proposed cap on rebates. “The costs of the solar energy rebate program are shared among all KCP&L customers, not just those who are making investments in solar technology.”