D. Georgia’s Net-Metering Scheme
Georgia does not have a robust net-metering scheme. In 2001, the Georgia legislature passed the Georgia Cogeneration and Distributed Generation Act. The purpose of the Act was to “(1) Encourage private investment in renewable energy resources; (2) Stimulate the economic growth of Georgia; and (3) Enhance the continued diversification of the energy resources used in Georgia.” The Act allows Georgians with distributed generation assets to connect their system to the grid and sell back their excess electric energy—beating Congress’s Energy Policy Act to the punch by four years. However, the Act does not set the rate at which customers with distributed generation assets are to be compensated for the energy they sell back to the grid. Instead, the Georgia legislature left that decision to the PSC and GPC, subject to a few rules.
One important rule is that the PSC cannot require the utility company to purchase customers’ distributed generation energy at a price above the utility’s “avoided energy cost”—essentially setting a cap. Avoided energy cost is the cost the utility otherwise would have incurred had the customer not sold their energy back to the grid. This essentially boils down to the amount it would have cost the utility to purchase the electric at wholesale price. GPC has two different avoided energy costs on file with the PSC—one for solar and one for all other distributed generation assets. Thus, the rate at which a consumer with a distributed generation asset is compensated depends upon the nature of the asset. Notably, the solar avoided cost is lower than the standard avoided cost, and the majority of distributed generation assets are solar. It follows that the majority of distributed generation is being compensated at the lower avoided cost rate.
Generally speaking, the avoided cost price is substantially lower than the retail price—the price consumers pay for their electricity. For example, in its 2018 projections, GPC estimated its solar avoided energy cost at 3.188 cents per kilowatt hour. Meanwhile, Georgia Power’s residential “retail” rates range from 4.7 cents per kilowatt hour during the winter, to 9.7 cents per kilowatt hour during the summer. In other words, during the summer, consumers that generate and sell their solar power to the grid are paid less than a third of what they would pay the utility for the same amount of energy.
Net-metering in Georgia is subject to other restrictions as well. One large restriction is that utilities are only required to purchase consumers’ distributed generation energy “until the cumulative generating capacity of all renewable energy sources equals 0.2 percent of the utility’s annual peak demand in the previous year.” Moreover, up to this 0.2 percent cap, customers are compensated for their generation “on a first-come, first-served basis.” Another large restriction is that distributed generation assets have peak generating capacity caps. For residential consumers, their distributed generation assets cannot exceed 10 kilowatts. For commercial consumers, their distributed generation assets cannot exceed 100 kilowatts.
Subject to those restrictions, GPC has complete control over the administration and execution of its net-metering program. The PSC is hands-off save for the avoided cost rate filings. Unsurprisingly, GPC has not opted to provide incentives for net-metering beyond those required by state and federal law. GPC has succinctly—if not vaguely—explained its barebones program as follows,
Georgia Power purchases renewable energy from eligible providers on a first-come, first-served basis until the cumulative generating capacity of all renewable sources reaches a specific amount set by the Georgia Public Service Commission (PSC). Georgia Power will purchase solar energy through the renewable energy resources tariff at the company's Solar Avoided Cost rate as approved by the PSC . . . .
The program’s enrollment process is somewhat arduous. GPC requests that consumers begin by submitting an optional “pre-application request” to the company. The request requires a fee be paid, and in return GPC provides the consumer with data that will “assist [consumers] with [solar panel] sizing and site selection.” The provided data is not binding on GPC, and GPC disclaims liability if the consumer relies on that data in making the choice whether to invest in solar and enroll in the net-metering program. When the consumer decides to apply for net-metering, they must pay a nonrefundable processing fee and provide a host of schematics for their asset and its proposed interconnection to the grid. GPC will then review the application and determine if additional information is needed or if the consumer needs to alter their plans for any reason. During this process, GPC will conduct a site visit. Following the site visit, a host of “impact studies” are conducted. GPC conducts the studies with the consumer paying up front—no refunds allowed.
If after this entire process, the consumer still wishes to proceed, “At [the consumer’s] sole risk and discretion, [the consumer] may commence [solar panel] procurement, site preparation, and construction . . . .” If GPC must install any additional equipment to connect the consumer’s solar system to the grid, the consumer must pay for it. Following payment of these costs and the signing of an interconnection agreement, GPC will finally install the necessary equipment and connect the consumer’s asset to the grid (with the consumer paying the installation costs). Subject to final testing, the consumer may now bear the fruits of their solar panels—at GPC’s miniscule solar avoided cost rates of course.