Solar energy advocates got their day in the sun before the Alabama Public Service Commission Thursday, as the state’s electricity regulators heard testimony over a formal complaint filed regarding a fixed fee that Alabama Power charges its residential solar customers.

The solar advocates and customers argue that Alabama Power’s solar fee is not backed up by real-world data and is stifling the rooftop solar industry in Alabama.

The utility says the $5 per kilowatt fee, called the capacity reservation charge, paid by about 200 customers, is needed to cover the costs of having back-up power available for those customers when their panels aren’t producing.

With most residential solar arrays around 4-5 kilowatts, that fee typically adds $20-25 per month to the electric bills of solar power customers. The plaintiffs say that fee can nearly double the amount of time it takes for rooftop solar customers to pay off their initial solar investment.

“The effect, if not the purpose, of these charges is to deter customer-sited solar development in this company’s solar territory,” said Karl Rabago, a renewable energy expert testifying for the plaintiffs. “And in this unfortunate respect, the charge has been remarkably successful.”

Alabama Power’s pricing manager Natalie Dean testified first that the company needed to charge the fee to cover costs to the company for having backup power available for when solar customers’ panels are not producing electricity.

“The capacity reservation charge recovers the cost of providing backup power service to those customers when they need it,” Dean said in her testimony.

Attorney Kurt Ebersbach of the Southern Environmental Law Center questioned Dean on the process of developing the capacity reservation charge and the benefits to the utility of having distributed solar resources connected to the grid, especially during peak summer demand hours.

The SELC is representing environmental group GASP, which is challenging the fee along with Energy Alabama and customers who are paying the charge. The original complaint that led to Thursday’s hearing was filed in April 2018.

Dean said that the cost to the company of maintaining backup power for those customers remained constant despite benefits to the system on sunny days.

The capacity reservation charge applies to any residential customers capable of generating their own electricity, by solar or other means. It was implemented in 2013 at $5 per kilowatt, but after this petition challenging the fee was filed, Alabama Power also petitioned the PSC to increase the fee to $5.42 per kilowatt.

Dean said during her testimony that Alabama Power was revising that request to make the fee $5.41 per kilowatt instead.

Dean’s testimony took nearly an hour and 45 minutes of the two-hour hearing, followed by Rabago. Rabago read a prepared summary of his already filed testimony for the commission outlining the case made by the plaintiffs that Alabama Power hasn’t sufficiently demonstrated why the charge is necessary.

“The charges are inappropriate, and in my view, they're unlawful because they rely on projected revenue deficiencies and not on the cost to serve customers,” Rabago said.

Rabago, a former Texas Public Utility Commissioner and Deputy Assistant Secretary for the U.S. Department of Energy, also highlighted the fact that utility regulators in other states have rejected or reduced similar fees when they’ve been proposed.

“Customers seek to lower their bills in all sorts of ways. Solar is just one,” Rabago said. “That is their right. And the utility has no right and should have no right to claw those savings back in the form of unjustified charges.”

Attorneys for Alabama Power and the PSC staff had no questions for Rabago.

The hearing room at the Public Service Commission in Montgomery was full, with some people standing around the edges or seated in the aisles. Others sat in the waiting room where they listened to the testimony through the building’s speaker system.

Many were solar energy advocates wearing stickers that read “Let it shine.” Others carried signs promoting renewable energy, and two college-age renewable energy advocates played a board game “Monopoly for Millenials” in the waiting room.

Keith Johnston, managing attorney for the Birmingham office of the Southern Environmental Law Center, said the crowd showed how important this issue is for Alabama residents.

“People care about this issue,” Johnston said. “They want to be able to use solar for a lot of different reasons and I think we saw that with this turnout.”

Administrative Law Judge John Garner ran the hearing and repeatedly reminded the crowd that live streaming or videoing the proceedings was not allowed. At least three people were escorted out of the hearing room after recording or broadcasting video of the hearing.

Garner requested that both parties submit proposed orders to the Commission by Dec. 20. Garner said the Commission’s ruling on the complaint will be issued during a regular meeting of the PSC and will be announced on the agenda in advance.