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Alabama Power’s solar fee challenged in PSC hearing

Brandon Moseley

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Thursday, the Alabama Public Service Commission held a formal hearing to consider a complaint by the Southern Environmental Law Center, on behalf of the environmental activist group, GASP and two other parties, demanding that the PSC abolish an Alabama Power Company charge on customers with solar panels that use Alabama Power as a backup service.

Alabama Power Company rates manager Natalie Dean was grilled for nearly two hours by attorneys for the environmental group about the company’s calculations and the assumptions used to make those calculations.

Dean explained that the $5 a month per kilowatt capacity reservation charge was necessary because the company was required by law to provide those customers with backup power at any time.

“They have requested that the company provide a service to them and there is a cost to that service,” Dean explained. “The capacity reservation charge is to recover the cost of providing backup service.”

Dean defended her calculations and the assumptions behind them.

“There are variable and fixed costs benefits and we did consider them when we developed this framework,” Dean said.
In a house with solar panels, but no storage capacity, much of the power needs of that home are produced by the solar panels and in some cases excess power actually enters the system from those homes; but with a solar system when the sun goes down, cloud cover makes solar generation impossible that day, or there is a equipment malfunction; then Alabama Power is supposed to provide for that home’s needs at the exact same rate that other customers pay. Dean said that predictable events like nighttime is supplemental power and is not factored in her calculations of the capacity reservation charge; but unexpected events such as overcast conditions or equipment failure creates the need for backup power.

“If the generator is supposed to be producing and it is not then I am having to provide backup,” Dean explained to the members of the PSC.

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Alabama Power is required to provide for the daily power needs of its ratepayers; and in systems where Alabama Power is required by law to provide backup service if needed; then the utility is required to be able to provide that backup whenever it is needed on top of the normal power being generated by the company’s system.

One key point of contention was Dean’s calculation that that number was equal to 65 percent of the systems where Alabama Power is the backup power provider.

“For every 10 kilowatts of solar generation the company must reserve 6.5 kilowatts in reserve,” Dean explained. “I am required to provide 100 percent of their needs whenever they need it.”

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The capacity reservation charge is based on the power generation system being used and its capacity

According to the example numbers discussed in the meeting, the typical home in Alabama with a solar system; purchases $609 less electricity from the company than they would without the solar system; but they would typically incur $330 a year in capacity reservation charges. They still have a cost savings; but after paying their capacity reservation charges that savings would only be about $279 a year.

Advocates for the solar industry argue that the capacity reserve charge serves as a deterrent against more Alabama homeowners installing solar systems.

Karl R. Rábago, from Colorado, is the former Executive Director of the Pace Energy and Climate Center.

“A very few of Alabama Power’s small customers have made significant personal investments to purchase and install solar-power generators that provide some of the electricity that those customers use for day-to-day life,” Rábago said. “Alabama Power has proposed and secured approval to charge special rates that eliminate much of the savings those customers expected to realize from their investments.”

“My testimony addresses the many ways in which the Alabama Power Rate Rider RGB is inconsistent with Alabama and federal law, the ways in which the Company relied on unreasonable methods for calculating the charges it imposes under Rate Rider RGB for back-up service, and the ways in which the resulting charges are inconsistent with established principles of electricity rate design and implementation,” Rábago added. “The traditional monopoly utility business model, because utilities make profits, in part, through the sale of electricity and they seek a return of and on their investments made to generate and deliver this electricity.”

“Customer-installed solar cuts into the traditional utility profit-making business model by reducing sales, but solar also reduces utility costs, and especially because it generates before and during summer peak demand periods, when demand and costs are often highest,” Rábago claimed. “The law requires that rates, including Rate Rider RGB, must be just and reasonable, non-discriminatory, and consistent with applicable regulations.”

Dean said that without the capacity reservation charges, then the other ratepayers would be subsidizing the cost of the solar customers backup power needs.

Only 133 homeowners pay the capacity reservation charges currently.

The PSC will announce their ruling at a future regular meeting of the Commission.

Brandon Moseley is a senior reporter with eight and a half years at Alabama Political Reporter. You can email him at [email protected] or follow him on Facebook. Brandon is a native of Moody, Alabama, a graduate of Auburn University, and a seventh generation Alabamian.

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Economy

Alabama Gulf Coast beaches remain closed for now

Brandon Moseley

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Gov. Kay Ivey took a tour of the damage from Hurricane Sally on the gulf coast Friday September 18, 2020. (Governor's Office/Hal Yeager)

Alabama Gov. Kay Ivey announced that beaches will remain closed for now due to ongoing repair and cleanup efforts in the wake of Hurricane Sally.

“Working closely with Gulf Shores Mayor Robert Craft and Orange Beach Mayor Tony Kennon, as well as Commissioner Billy Joe Underwood, the governor has agreed to keep Baldwin County’s beaches closed until Friday, October 2nd,” the governor’s office said in a statement. “This will allow those communities additional time to get their beaches ready for public enjoyment in a safe, responsible manner.”

Mobile County beaches might open earlier than that.

“Likewise, the governor has been in touch with Mayor Jeff Collier, and she is prepared to amend the beach closure order for Mobile County when he signals that Dauphin Island is ready to reopen their beaches,” the governor’s office said in a statement. “At the present time, all Alabama beaches remain closed until further notice.”

Hurricane Sally came ashore near Gulf Shores on Sept. 16 as a category two hurricane with 105 mile per hour winds. Numerous homes, businesses and farms have been destroyed and many more have seen serious damage.

“As of Wednesday night, approx. 37,000 cubic yards of Hurricane Sally debris (equivalent to roughly 1,700 truck loads worth) has been picked up in Orange Beach since Sunday (4 days),” the city of Orange Beach announced. “Kudos to our debris contractor CrowderGulf.”

“I spent Sunday afternoon meeting with senior staff and I believe we will need some time to get our buildings safe for children to return,” said Baldwin County Schools Superintendent Eddie Taylor in a letter to parents. “We live in a very large county. Power may be on in your area and your school may not have any damage, but we cannot open schools unless all schools can open. Our pacing guides, state testing, meal and accountability requirements are based on the system, not individual schools.”

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“We have schools without power and for which we do not expect power until later this week,” Taylor said. “In this new age, we need internet and communications which are currently down so we cannot run any system tests. We have physical damage at our schools including some with standing water, collapsed ceilings and blown out windows. We have debris on our properties and debris blocking our transportation teams from picking up students. All of this must be resolved before we can successfully re-open.”

“If everything goes as planned, I expect we will welcome back students on Wednesday, September 30,” Taylor said. “Prior to returning students to school, we will hold two teacher work days to get our classrooms and our lessons plans back on track.”

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Economy

SNAP replacement benefits coming to three counties hit by Hurricane Sally

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Gov. Kay Ivey took a tour of the damage from Hurricane Sally on the gulf coast Friday September 18, 2020. (Governor's Office/Hal Yeager)

Thousands of SNAP recipients in Mobile, Baldwin and Escambia counties are set to receive automatic replacement benefits as a result of Hurricane Sally, the Alabama Department of Human Resources announced Thursday.

Recipients who received their benefits Sept. 1 through Sept. 16 will receive a replacement of 50 percent of their regular monthly benefit. Those who received supplemental pandemic maximum allotment payments will receive a replacement of 30 percent of those benefits.

The U.S. Department of Agriculture Food and Nutrition Service approved the replacement benefits today at the request of DHR. The benefits are intended to replace food purchased with SNAP that was lost to widespread power outages caused when Hurricane Sally made landfall on Sept. 16.

“Our priority is to remove the very real threat of hunger for the many Alabamians who are struggling from the devastation of Hurricane Sally,” said Alabama DHR Commissioner Nancy Buckner. “The first step toward that goal is to replace the food that so many Alabamians lost to the storm. We are actively working to obtain additional resources to provide much-needed relief for the region as it recovers.”

Hurricane Sally caused over 265,000 households to lose power for at least four hours in Mobile, Baldwin and Escambia counties, where approximately 54,000 households will receive SNAP benefits totaling an estimated $8.5 million.

Those recipients should expect to see the replacement benefits automatically loaded onto their EBT cards next week.

The Food Assistance Division of DHR administers the SNAP program in Alabama.

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More information about the program can be found at dhr.alabama.gov/food-assistance.

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Economy

Unemployment assistance available to workers in Baldwin, Escambia and Mobile Counties

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Gov. Kay Ivey took a tour of the damage from Hurricane Sally on the gulf coast Friday September 18, 2020. (Governor's Office/Hal Yeager)

Alabama Department of Labor Secretary Fitzgerald Washington announced Thursday that workers who became unemployed as a direct result of Hurricane Sally in Baldwin, Escambia and Mobile Counties may qualify for unemployment assistance.

People who live in or worked in these counties and became unemployed due to Hurricane Sally during the period of Sept. 14, 2020, may be eligible for assistance under the Disaster Unemployment Assistance program, which was triggered when President Donald Trump designated the area as a disaster area on Sept. 20, 2020.

“Generally, those who are eligible for state unemployment benefits are not eligible for DUA, but a claimant may qualify if state unemployment compensation benefits are exhausted,” said Washington. “If you believe you are entitled to these benefits, I urge you to file a claim to see if you are eligible.”

People who may be eligible for Disaster Unemployment Assistance include the following:

  • Individuals who no longer have a job, are unable to reach the place of employment, or were scheduled to start work in the major disaster area and the job no longer exists
  • Those who became the breadwinner or major support of the family because the head of household died, or those who cannot work because of an injury incurred during the major disaster

All the previously described circumstances must be as a direct result of the hurricane. Self-employed individuals must provide a copy of their 2019 tax return, business license or Form 1099 within 21 days after applying for DUA benefits.

Claims can be filed through ADOL’s website at labor.alabama.gov or by calling 1-866-234-5382.

The deadline to file a DUA claim is Oct. 28, 2020, for Baldwin, Escambia and Mobile Counties.

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Alabama Farmer’s Federation starts a relief fund for farmers impacted by Sally

Brandon Moseley

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A satellite image of Hurricane Sally. (VIA NATIONAL WEATHER SERVICE)

The Alabama Farmers Federation said Monday that it has established a relief fund to help farmers from across the state whose farms were damaged by Hurricane Sally.

“When disaster strikes, I am always impressed by the people of Alabama and their giving spirits,” said Alabama Farmers Federation President Jimmy Parnell. “As we started receiving photos of damaged crops, barns and equipment, we also started getting questions from people about what they could do to help our farmers, and that’s why we’ve established this fund.”

All the donations to the relief fund are tax-deductible and may be made online or by check payable to Alabama Farmers Agriculture Foundation at P.O. Box 11000, Montgomery, AL 36191. Please include “hurricane relief fund” in the check memo line.

“Most of our farmers had as good a crop as we’ve ever seen, and it was so close to harvest for cotton, soybeans, peanuts and pecans,” Parnell said. “It’s devastating to lose a crop that had so much promise. Our farmers are great people who are assisting each other with cleaning up the damage, and we’re so grateful to everyone across the state who is helping in some way, like donating to the relief fund.”

Hurricane Sally made landfall near Gulf Shores as a category two storm Sept. 16 with maximum sustained winds of 105 mph. Official reports from the National Weather Service show more than 20 inches of rain in Baldwin County.

The combination of heavy rains and high winds damaged crops, structures and equipment from Mobile and Baldwin Counties in the southwest through Russell County in the east.

It has been a difficult few years for farmers.

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While the general economy had been doing well prior to the coronavirus global pandemic, the farmers were caught in the middle of an international trade dispute over tariffs and fair competition.

Chinese retaliation against Americans farm products depressed commodity markets from 2018 through early this year.

When it appeared that the U.S. and China had come to a trade accord in January, the coronavirus hit along with massive disruptions in the supply chain.

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Farm bankruptcies were already up pre-COVID-19. The loss of the 2020 crop could push some already struggling agribusinesses over the brink.

The Alabama Farmers Federation is Alabama’s largest and most influential farmers’ organization.

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