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SC governor signs legislation that continues solar net metering

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SC governor signs legislation that continues solar net metering

South Carolina's governor signed legislation that lifts the state's cap on net metering for customer-generators and expands renewable energy access for customers of the state's electric utilities.

Gov. Henry McMaster on May 16 signed House Bill 3659, a bipartisan bill pushed through the South Carolina General Assembly after lawmakers were finally able to reach a compromise.

The South Carolina House of Representatives on May 9 unanimously approved the South Carolina Senate's amended version of H.B. 3659, a little more than a year after a previous effort to lift the net metering cap failed on a technicality.

The measure increases South Carolina's 2% cap on net metering for rooftop solar customers and extends the current net metering rate until the Public Service Commission of South Carolina establishes a successor tariff.

Under a comprehensive law and settlement agreement signed in 2014, electric utilities must make net energy metering available to customer-generators until the total nameplate capacity of the distributed energy systems equals 2% of the utility's previous five-year average of peak retail demand. Under the agreement, a kilowatt-hour produced by a customer-generator is credited at the full retail rate of a kilowatt-hour produced by the utility.

Dominion Energy South Carolina Inc., formerly South Carolina Electric & Gas Co., and Duke Energy Corp.'s utilities have been meeting the net metering requirements early, prompting lawmakers to take action.

H.B. 3659, known as the South Carolina Energy Freedom Act, requires electric utilities to make net metering available to all customers who apply before June 1, 2021, with these customer-generators allowed to continue service under the current tariff terms and conditions through May 31, 2029.

The legislation, which took effect upon the governor's approval, directs the PSC to establish a new "solar choice metering tariff" that provides sufficient benefits to customer-generators while working to eliminate subsidies or cost shifts that impact nonparticipating customers. This tariff will go into effect for applications received after May 31, 2021.

As part of establishing the new tariff, the PSC must open a docket no later than Jan. 1, 2020, to review the "costs and benefits of the current net energy metering program ... [and] establish a methodology for calculating the value of the energy produced by customer-generators."

While primarily aimed at rooftop solar customers, the measure indicates that the tariff applies to customers with energy storage and other renewable energy facilities.

In addition to lifting the cap on net metering, the legislation helps resolve a contract dispute between the state's electric utilities and solar developers, while increasing the maximum generation capacity of renewable energy facilities that the commission will review for interconnection to the grid.

It also requires utilities to file a "voluntary renewable energy program" for commission review and to establish a neighborhood community solar program that will expand solar access to low-income communities and customers. The state's utilities must also provide "evaluation of the adoption of renewable energy, energy efficiency and demand response," as well as energy storage, in their integrated resource plans.

In addition, the commission has the authority to require any entity that wishes to build a "major utility facility" to first go through an independently monitored, all-source competitive procurement process.

Duke Energy, which operates in South Carolina through subsidiaries Duke Energy Carolinas LLC and Duke Energy Progress LLC, said recently it is "pleased this comprehensive, compromise bill" was approved by state lawmakers.

The South Carolina Coastal Conservation League also has voiced its support for the legislation that represents "a step closer to a future where all South Carolinians have access to clean, affordable, and renewable energy options."

Dominion Energy South Carolina is a subsidiary of Dominion Energy Inc.