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Cash-out of solar energy credits can surprise utility customers

LIPA/PSEG ratepayer Joe Spallino is shown with some

LIPA/PSEG ratepayer Joe Spallino is shown with some of the solar panels installed on the roof of his Amityville home on Tuesday, Oct. 4, 2016. Photo Credit: Newsday / John Paraskevas

Joe Spallino of Amityville thought his days of high electric bills were over when he became one of the more than 35,688 LIPA customers with solar panels last year. But then he got a call from PSEG Long Island’s collections department last Thursday telling him he had a past due bill of $246.56.

“I said, ‘You’re not getting a dime out of me until I figure this out,’” Spallino said.

He was surprised because his solar panels cut his electric bill to practically zero since they’d been installed last June, and he’d been used to paying just the monthly service charge of around $13, atop the $150 he pays per month to lease panels from Vivint Solar.

The problem, it turned out, was that PSEG, following a long-standing practice by LIPA and other state utilities, used the one-year anniversary of the date his solar system meter came online to “cash out” all the credits he’d built up in his solar-energy bank. Under a program called net-metering for all solar customers, the utility stores credits for all the excess energy they produce, so that they can use those credits when the sun isn’t shining, at night or on cloudy days.

Spallino had amassed 2,940 kilowatt-hours in his energy “bank,” he said, enough to keep him from paying an electric bill for three months. But because of the utility’s practice of cashing out the credits at the end of the year from the in-service date, he had zero credits to pay his August bill, so he was hit with charges at the full rate of around 19 cents a kilowatt hour.

In Spallino’s case, after he’d alerted the state Department of Public Service and Newsday, PSEG said it would retroactively reset his anniversary date to March, and recalculate his bills back to that date.

“Our goal always is to enhance customer satisfaction and provide customers with the utility they deserve,” spokesman Jeff Weir said. “In this instance, he had a complaint and we were able to resolve that issue for him and do everything we could to make him a satisfied customer.”

Fred Daum, director of customer contact and billing at PSEG, said the company this year began notifying new solar customers about the anniversary “reconciliation” issue. A brochure called “Solar Power and Net Metering” was mailed out to all new net-metered customers starting about five months ago, and is available on the PSEG Long Island website. He said the company also plans to send the brochure to past solar customers in coming months, to make sure all know the best time to reset their “reconciliation” date.

The brochure tells customers, “Spring is typically the best time to reconcile because credits are commonly used to offset bills in the winter when there’s less daylight.” Daum acknowledged Spallino likely wasn’t sent the brochure because he got his solar system last year. PSEG says it also sends emails to customers or their installers informing them of the anniversary issue.

Spallino expressed concern with the fact the utility pays solar customers a fraction of what the credits are worth in the bank when they are cashed out on their anniversary date: around 2.5 cents a kilowatt hour, he was told, compared to the 19 cents a kilowatt hour they are worth when they offset his energy bill. PSEG in its brochure says it uses a special state “buyback rate” to value the credits it purchases from customers.

All PSEG customers are permitted to change their anniversary date once, PSEG said.

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