Judge Affirms Alabama Power’s Right to Charge High Rooftop Solar Fee

A federal judge dismissed a suit challenging Alabama Power’s capacity reservation charge. The ruling effectively affirmed the utility’s authority to impose the fee. Opponents have called it a high rooftop solar fee that hampers rooftop adoption.

Legal challenges and federal review

The fee was approved by the Alabama Public Service Commission in 2013. Environmental groups appealed to state regulators and then to the Federal Energy Regulatory Commission.

FERC reviewed the matter in 2021. The commission declined to open an enforcement action. Commissioners Richard Glick and Allison Clements filed a concurrence raising concerns.

The pair said petitioners presented a strong argument that the Alabama commission may not have followed FERC Order No. 69. They questioned Alabama Power’s method for calculating backup and capacity costs.

District court decision

The District Court judge dismissed the plaintiffs’ suit. The ruling said petitioners did not produce evidence showing a violation of PURPA.

That decision left the capacity reservation charge intact. Advocates called the outcome a setback for rooftop solar in the state.

How the fee and related policies affect customers

Alabama lacks traditional net metering. Customers who export excess power receive a credit based on the utility’s avoided cost.

That avoided-cost credit is typically lower than retail rates. Critics say the policy reduces the financial appeal of residential solar.

• Fee approval: Alabama Public Service Commission, 2013.
• FERC review and concurrence: 2021.
• Federal court dismissal: plaintiffs’ suit rejected by judge.

Comparisons with other states

Alabama Power’s charge is among the highest reported for small-scale solar customers. Other regulators have set smaller fees or rejected them entirely.

Georgia Power, a sister company under Southern Company, proposed a similar fee in 2013. Georgia withdrew its proposal after opposition.

Virginia example

In Virginia, standby charges apply only above a kilowatt threshold. The current threshold was 15 kilowatts.

The Virginia General Assembly passed a bill to raise the threshold to 20 kilowatts. The measure was reported as awaiting a signature from Democratic Gov. Abigail Spanberger.

The Virginia League of Conservation Voters said average standby charges range from $25 to $75 per month. They added such fees sometimes exceed $100 monthly.

Lee Francis of the Virginia League of Conservation Voters said the model discourages investment in larger home systems. The bill aims to reduce that barrier.

Utility rationale

Alabama Power says the charge prevents other customers from subsidizing infrastructure for solar customers. The company argues customers who remain grid-connected should share grid costs.

The utility has also said it supports customers who wish to install onsite solar. Its position stresses cost allocation when panels cannot produce power.

Voices for clean energy

Jilisa Milton leads the Greater-Birmingham Alliance to Stop Pollution. She criticized state policies for chilling clean, bill-reducing solar options.

Advocates say rooftop solar helps lower household energy bills and reduce carbon emissions. They continue to press for policy changes.

Reporting

This report was prepared for Filmogaz.com. Inside Climate News and reporter Charles Paullin contributed reporting used in the coverage.