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Federal Trade Commission can help protect solar rooftop consumers, APPA says

The emergence of solar distributed generation has raised several consumer protection issues, and the Federal Trade Commission has an important educational role to make sure that electricity customers are well informed about the options they have — and that they are protected against solar providers who use deceptive marketing practices, the American Public Power Association told the FTC on Aug. 22.

APPA submitted the comments in response to the FTC's request for follow-up comments after its June 21 workshop, "Something New Under the Sun: Competition and Consumer Protection Issues in Solar Power," held in Washington, D.C. Solar photovoltaic energy "is just one of the emerging technologies that are driving change in the electric power industry," APPA noted.

Allen Mosher, APPA's vice president of policy analysis, took part in the June workshop. He said that electricity customers have changing expectations today, and that the growing customer interest in solar power is just the beginning of these changes.

Competition in some services, such as solar rooftop, "is critically important to ensure efficient, pro-consumer outcomes in the electric power industry," APPA told the commission in its Aug. 22 comments. The FTC "should be cautious in its regulatory interventions in specific cases, but can provide useful guidance to the industry, legislators and other regulatory bodies on conduct that may raise concerns," the public power group said.

‘We need to get the prices right'

Rate design improvements and related technology innovations "are preconditions to support efficient increased utilization of renewables including rooftop solar," APPA told the commission. "We need to get the prices right first to get to efficient outcomes and meet federal and state policy goals."

Electric utilities and solar distributed generation providers "have different business models and in fact are selling different products and services to end-use consumers," APPA pointed out. "Solar DG firms can take advantage of the utility's obligation to serve by seeking to avoid paying for power supply reliability and common network costs or to shift costs to non-solar customers. In particular, rooftop solar business models predicated upon utility net energy metering have the direct effect of shifting costs from rooftop solar customers to other utility customers."

The apparent savings to electricity consumers from rooftop solar "are largely wealth transfers," APPA said, adding that, in most states, legislators and utility regulators are looking at changes in policies to address rooftop solar, particularly with regard to rate design.

For example, the National Association of Regulatory Utility Commissioners recently released a draft manual on distributed energy resource compensation, and the Department of Energy is supporting research into improvements in electric utility rate design, as well as research into other issues associated with the nation's increased reliance on renewables and distributed energy resources, APPA said. "Public power utilities have been notable early innovators in modernizing their rate designs," the association noted.

Rooftop solar should be compared to utility-scale projects

Rooftop solar "needs to be compared with other supply alternatives, including utility-scale solar and wind and distributed community solar, that may have lower total costs to meet public policy objectives and provide reliable and affordable electric power to the public," APPA said.

Emerging technological and market changes, including energy storage, electric vehicles, advanced metering, advanced grid electronics, home energy management networks, microgrids, and other innovations, could have a radical effect on current assumptions, the association said.

Issues brought about by these changes in the electricity industry, though, are all "manageable and solvable," APPA said, adding that the association "is optimistic that higher levels of distributed energy resources, including but not limited to rooftop solar, will be successfully integrated into distribution networks throughout the United States in coming years, providing benefits to customers and society at large."

Still, "a cautious approach to address the many technical and economic issues that rooftop solar raises for the electric industry will help to minimize unintended consequences," the public power group said.