GRU reduces net-metering rates for customers with solar power systems despite push-back from public – Alachua Chronicle

BY JENNIFER CABRERA

GAINESVILLE, Fla. – The last meeting of the current GRU Authority was held on April 17, with Member James Coats absent. The resignations submitted by the current members of the board will be effective on May 11 or 12, and the Governor is expected to appoint a new board before the next meeting.

Chair Craig Carter began by saying that the room was full (and people were in an overflow area) because people had learned that the Authority was planning to address solar net-metering, the practice of paying owners of solar power systems for any excess power produced. He said, “Anybody that has solar now, we’re not changing it. We’re not changing anybody that’s in permitting now.”

Carter said that solar owners currently “use GRU as a battery,” and with 1,500 solar customers, “as it gets more and more, it affects our generation – there’s a cost to it. So even the poorest person in this city is offsetting and subsidizing solar, to some extent.” He said the plan was to pay fuel adjustment rates to future solar customers: “We’re not eliminating net-metering. That is a false statement. We’re changing how we’re going to compensate for the solar, and that’s something that we should do.”

GRU CEO/GM Tony Cunningham said the purpose of the agenda items that evening was to begin making decisions that will affect the budget, which needs to be approved by July 1.

Questions for the Attorney General

Assistant City Attorney Bianca Lherisson, who sits on the dais at GRU Authority meetings with the Authority’s interim attorney Scott Walker, said her office is still waiting on a response to the request the Authority had submitted to the Attorney General about whether they can legally transfer funds to the City without taking action to ensure that the City spends it based on pecuniary factors.

Lherisson suggested asking an additional question of the Attorney General: Does the Authority, under the new bill, have the right to altogether refuse to authorize the General Fund Transfer? And if so, do they have to provide a justification, or is that refusal by right?

Lherisson said her office believes that the answer to the question is that the Authority has the right to refuse to authorize any General Fund Transfer at all, without providing any justification. She asked the board for authorization to send the question to the Attorney General.

Member Robert Karow made a motion to submit the additional question to the Attorney General.

Carter: “You know how I feel about the transfer. I’m fine where it’s at, and I think we need to move on.”

Carter objected to the part of the question about refusing the transfer without justification: “I don’t think you run any business without justification… You know how I feel about the transfer. I’m fine where it’s at, and I think we need to move on. Telling the City what they can do with the money – that’s not our job. Our job is to run this utility. If we give them $100 million and they want to go burn it on fire, I don’t care. I mean, I do, but it’s not my job to leash them.”

Karow responded that the utility has $1.9 million in debt, “and any justification would be that we’re trying to take care of business here and pay off debt and reduce rates.”

Member Eric Lawson seconded the motion, and the vote was 2-1, with Carter in dissent. Carter said, “It had to be unanimous, so it dies.”

Net-metering for solar customers

Before the presentation on net-metering for solar customers, Carter asked for a count of how many members of the public wanted to speak; the answer was that there were 30 or 35 people, so he limited comments to one minute instead of the usual three minutes. 

The resolution before the board was that the current net-metering ordinance would no longer apply, customers who submit a Letter of Intent to GRU to construct a solar power system by April 17 will be compensated the same as current customers, and anyone who submits a Letter of Intent after April 17 will receive GRU’s then-current fuel adjustment rate for each kilowatt-hour provided to GRU’s distribution system within the billing period.

History of net-metering

The Public Utility Regulatory Policy Act (PURPA), enacted in 1978 in response to the 1973 energy crisis, required utilities to purchase any generation from small renewable generators or co-generators. Solar was very expensive at the time, so there weren’t many renewable generators. GRU offered to pay its avoided cost for excess solar generation and implemented the solar Feed-in Tariff program in 2009. Under the Feed-in Tariff program, solar power systems inject energy directly into GRU’s distribution system, and the injected energy does not offset the load; that program ended in 2014. 

In 2014, GRU began offering net-metering, which was required by the Florida legislature in 2009; investor-owned utilities are required to offer full-retail net-metering, but municipal utilities and cooperatives are not required to do that. 

Net-metering calculates the difference between how much a customer pulls from the grid and how much is pushed onto the grid; in this way, GRU acts as both a reliable utility and a free battery. The credits are rolled over from month to month, and any positive balance at the end of the year is paid at GRU’s avoided cost, which was a little over five cents last year; the fuel adjustment rate is currently 3.5 cents but can change at the direction of the CEO/GM of GRU, based on fuel prices.

Jamie Verschage, Director of Utilities Planning, said that as solar power systems have become less expensive, participation in these programs has increased to levels “that are starting to disrupt the equity between customers that have solar and customers that don’t have solar” because fixed costs are shifted to customers who don’t have solar power systems. 

Verschage said that energy pushed onto the grid often has less value to the utility than the energy pulled from the grid. For example, he said that last week, when the weather was mild, GRU could purchase power for about $20/MWh, but net-metering customers were receiving a credit of about $120/MWh. Given the recent increase in net-metering applications, Verschage said, “this is just not financially sustainable in the long term.”

Verschage said the investor-owned utilities like FPL are required to pay the retail rate for excess energy, but JEA, a municipal utility like GRU, pays the fuel rate, which is what he was recommending to the Authority. He said that Clay Electric, a cooperative, pays a wholesale rate for excess energy. When JEA changed to the fuel rate in 2018, they grandfathered in existing customer for 20 years and reportedly did not see a significant drop-off in new applications. They faced a lawsuit, but it was dismissed for lack of standing.

Verschage recommended that all current customers be grandfathered at their current rates and said GRU would incur a cost of about $65,000 to make needed changes to its billing system, which is projected to be offset by savings within six months.

Motion

Karow made a motion to approve the resolution, and Lawson seconded the motion. 

29 members of the public spoke against the motion, with many asking the board to vote down the motion or at least delay a vote until a new board is appointed. Nobody spoke in favor of the motion.

After public comment, Lawson and Karow said they didn’t have any questions. Carter said GRU cannot afford to continue being a battery for solar customers. He continued, “People said it’s not about the money, but that’s all we heard – ‘I would not do it if it wasn’t for the money.’… I am all for solar; I’m just not for the way we’re paying it. So if it’s not about the money, why are you so upset at the way we’re paying it?”

The board voted unanimously to adopt the resolution. 

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