By Victoria Wicks
A grassroots effort to regulate net metering and set rates failed to pass through the House Commerce and Energy Committee on Wednesday. Dakota Rural Action studied other states’ net metering systems and wrote House Bill 1207. Lobbyists for several utility companies testified against the proposal, saying that requiring their clients to purchase excess energy from small renewable energy producers would raise prices.
Sabrina King of Dakota Rural Action says it’s not a difficult concept. If you generate more energy than you use, you put it in the system for other electrical customers. If you use more than you generate, you pay the utility company.
“At the end of the year, if you have generated more electricity than you have consumed, the compensation is at not the retail rate, but the wholesale rate,” King says. “There is no retail rate payout in this bill. And we did that because we understand that in a lot of other states where this has not worked well, there is a retail payout.”
Another proponent is Jerry Munson, former mayor of Rapid City. He supports net metering because coal-fired generators deposit mercury into lakes, and because utility companies keep raising their rates. And he says net metering has nothing to do with those increases.
“What hurts customers is upwards of thirty, forty, fifty percent increases that really end up hurting families and businesses,” Munson says.
Opponents include Gary Hanson, chairman of the Public Utilities Commission, who says net metering does cause prices to rise.
“Net metering forces the utility to purchase from the customer generator at a higher price during the night period, because that is when the least amount of electricity is used and that’s when most wind energy is generated,” Hanson says.
Generation is about a third of the cost of electricity, he says. Other costs include lines, substations, and customer service that factor into the increased rates the PUC approves.
Opponent Ed Anderson represents South Dakota Rural Electric Cooperatives. He says there are already individual producers on the system, but they’re not compensated at wholesale rates.
Committee members suggested that Dakota Rural Action work with utility companies to try to find common ground.