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Farmer, Central Hudson spar over solar benefit

MILTON – Two years ago, William Werba, a 74-year-old Ulster County apple farmer, decided he wanted to purchase solar panels.

Werba wanted to provide power for his farm on Old Indian Road in the Town of Marlborough, and his home, which overlooks the farm from atop Mount Zion, about a mile away. Last summer, 88 solar panels, surrounded by apple trees, began generating clean energy.

But not for Werba. With the exception of a tiny fraction of energy needed for his farm operations, the vast majority of his solar power is being supplied to Central Hudson Gas & Electric Corp. without any savings to the electricity bill at his home.

That’s because Central Hudson has determined — and so far, the state Public Service Commission has agreed — that because Werba’s farm is registered as a limited liability corporation and his home is in his name, the two locations represent two distinct Central Hudson customers.

That, the utility told Werba, disqualifies the project from state rules that allow farmers to generate energy in one location and offset costs at another location owned by the same farmer, a process known as remote net metering.

In order to do so, Central Hudson maintains, the host meter where the energy is being generated and any satellite meters must be in the same customer name.

“Central Hudson’s cookie-cutter, black-and-white, same-size-fits-all approach rejected this application without any due process,” Werba said. “Attempts should have been made to evaluate this application on its own merits to determine if it meets the spirit of the law, which it does in all respects.”

Central Hudson said the law is specific and that it is obliged to follow it.

“In reviewing remote net metering applications, Central Hudson follows a consistent approach so as not to discriminate against any customer,” spokesman John Maserjian said.

So far, the PSC has agreed. In a Dec. 3 letter to Werba, Managing Attorney Leonard Van Ryn said Central Hudson was correct to reject Werba’s application. Werba has filed a complaint, which is pending.

The conflict raises questions whether a narrow definition of a customer’s identity undermines the spirit of a rule meant to encourage the development of clean energy sources on farms and other non-residential customers such as municipalities and school districts.

And, some say, it highlights resistance by utilities to embrace the development of solar and wind power sources.

“Utilities and Central Hudson in particular mightily gamed the system when we updated our net metering laws,” said state Assemblyman Kevin Cahill, the Democrat from Kingston who chaired the Assembly’s Energy Committee when the law was passed in 2011.

The measure, passed unanimously by the state Legislature, was framed as another step in the state’s efforts to promote clean energy, boost job creation and reduce energy costs for farms and businesses. It was supported by state agencies, clean energy advocates, farm groups and associations of counties, mayors and municipal officials.

For farmers, it solved the problem posed by old rules that required the wind or solar hardware to be hooked up to a single, nearby meter. Now, those technologies could be placed anywhere and the credits applied to each of a customer’s meters.

“I think the Legislature created remote net metering to permit businesses and farms that may have more than one utility meter to enjoy the benefits of a cost-effective solar system,” said Jeff Irish, president and owner of Hudson Solar, the Rhinebeck-based company that sold Werba his system. “And by cost-effective, I mean one that is designed and built in the best place for a solar system that might not line up with where the utility meters are.”

Utilities opposed the change. Among their reasons were concerns about the billing process. In a joint letter, New York State Energy & Gas Corporation (NYSEG) and Rochester Gas and Electric Corporation said the new rules would impose costly customer-management responsibilities.

“Our analysis,” the utilities’ Director of Public Affairs Robert Bergin wrote in 2011, “indicates that remote net metering billing transactions could not be automated and would require manual billing, a tedious, time-intensive and expensive task.”

Although one customer-generator may own or lease multiple properties, Bergin wrote, from a utility’s point of view, each meter, not each customer, represents an account.

“Under this legislation, utilities would have to handle the initial requests for remote net metering, verify that the property associated with each account is owned or leased by the customer, set up the net metered accounts and apply credits manually for every subsequent bill,” Bergin said.

National Grid, a British-based utility with operations in upstate and western New York, said the law would “over-compensate” customers who would be selling solar and wind power at the full retail rate.

None of the utilities’ comments, however, presaged the customer-identity issue facing Werba.

Irish, the Hudson Solar president, said it is the first time it has come up. He said Hudson Solar has done installations in areas controlled by NYSEG and National Grid, “and they are more flexible and operating within the spirit of the law” than Central Hudson has been.

On Dec. 29, Hudson Solar filed a petition with the PSC to modify Central Hudson’s requirements for remote net metering of farms.

Maserjian said Central Hudson tried to resolve the issue by offering “several alternatives to allow remote net metering of his system.” But Werba said Central Hudson’s proposals would have required him to abandon his liability shield.

Cahill said the PSC has had no choice but to affirm the utilities’ “hyper technical interpretation of the law.” State lawmakers, he said, later amended the law “to keep entities like Central Hudson from thwarting the Legislature’s intent.”

“It doesn’t surprise me that they are at it again,” Cahill said. “We will look at the situation and determine if going back to the legislative well is the appropriate response.”

Central Hudson said that with the exception of Long Island, its service area leads the state on solar installations on a per-customer basis, and is second in installed solar capacity per customer.

“We regularly assist our solar customers through the process of interconnecting their systems so that they may qualify for the programs and incentives available to them,” Maserjian said.

John Ferro: 845-437-4816, jferro@poughkeepsiejournal.com, Twitter: @PoJoEnviro

Posted in General, Hudson Solar, News.