Solar bill passes Kentucky House, heads back to Senate

Lawmakers in coal-loving Kentucky have approved a bill that could make solar panels less lucrative for residential customers beyond 2020.

The House of Representatives passed Senate Bill 100 on Friday in a 71-24 vote. It would let the Public Service Commission, a board appointed by the governor, decide how much utility companies must pay to purchase power from people who have solar panels installed on their homes.

The state Senate has already passed the bill, but they will have to vote on it again because the House made some changes. If it becomes law, it would take effect Jan. 1, 2020. Anyone who has solar panels installed before then would be exempt from the law for the next 25 years.

The bill could become a campaign issue in the 2019 governor's race. Democratic candidate Rocky Adkins, the House minority floor leader, voted for the bill. But Democratic candidate Adam Edelen, Kentucky's former auditor who is developing a solar power project on a former coal mine in eastern Kentucky, said the bill would make Kentucky irrelevant in the new economy.

"Legislation that demonstrates a hostility to renewable energy is akin to putting a closed-for-business sign on the state," Edelen said. "You are simply not relevant to a new economy without new energy."

Adkins said the bill is not perfect, but said he voted for it because he knew it was not the final version. House and Senate negotiators will have to reach a compromise before it becomes law.

"My job as House Democratic leader is to bring about compromise whenever possible, and that's exactly what we saw happen today," Adkins said.

People with solar panels on their homes sometimes generate more power than they need. When that happens, the utility company buys the power back from them. Customers don't get cash, but a credit toward their power bill.

State law currently says utility companies must buy that power at the same price they sell it. Senate Bill 100 would let the Public Service Commission decide how much utility companies must pay. That would likely lead to lower credits because the commission would consider how much it costs the utility company to maintain the equipment that supplies the power to homes.

"Not one instance does the state of Kentucky put in statute that somebody has to buy everything that you produce," said Republican Rep. Jim Gooch. "This bill does not put the solar industry out of business. It doesn't really prevent anyone from buying rooftop solar in the future."

But critics warn the bill would hurt the small but growing solar industry, which would have a harder time selling the panels if people don't know how much they would get for the excess power they sell. That's why Republican Rep. Jim DuPlessis proposed some changes to the bill, which lawmakers approved.

"Just imagine you are a small business owner who has invested your savings to build a business based on a business model that our statutes created," DuPlessis said. "And then sometime later, because we realize there is some issues with the bill, we completely gutted what they are doing and eliminate their business model to the point it will be very hard for them to continue."

The House version would let the Kentucky Solar Industry Association intervene in the ratemaking process on behalf of customers, giving them more firepower when they face off against the utility companies. And when setting the rates, the House version would require the commission to consider not just the utility companies' costs, but also the benefits they get from solar power generated by their customers. The House passed the amendment on a voice vote.

Kentucky Solar Industries Association President Matt Partymiller said he likes the changes and urges "the Senate to concur on this very fair House compromise."

Still, it wasn't enough to win support from some lawmakers who fear it is will damage the solar industry.

"There is still a disincentive to install these panels because they can never be sure what the rates are going to be now," said Democratic state Rep. Angie Hatton, who voted against the bill.