by Rein M. Terrado, Court House News, October 26, 2015

HONOLULU (CN) - Despite a state goal of 100 percent renewable energy, and abundant sunshine, Hawaii has stopped or severely reduced credits to solar panel owners who send power to the grid, and it did it illegally, The Alliance for Solar Choice claims in court.

The Alliance is an advocacy group for "the majority of the rooftop solar industry," it says in its Oct. 21 lawsuit against Hawaii's governor and Public Utilities Commission. Its members have installed solar panels on more than 10,000 Hawaii homes, businesses and public buildings, it says in the complaint in Oahu's First Circuit Court.

The Public Utilities Commission decided on Oct. 12 to severely curtail Hawaii's solar energy credit program, and did so without the required 30 days notice and a public hearing, the Alliance says.

"The decision constitutes a form of rulemaking," the Alliance says in the complaint.

The Oct. 12 ruling killed the Net Energy Metering (NEM) program, but grandfathered NEM customers and those with applications pending on that day.

As a result, new customers of the Alliance will receive no credit for sending their excess electricity to the grid, or significantly less credit than existing NEM customers.

Net metering gave solar customers full retail credit for the energy they delivered to the grid, from which it was resold to others.

"With net metering, consumers take control of their energy use through private investment and provide other taxpayers with clean energy and cost savings," the Alliance says in the complaint.

Net metering applied to eligible solar, wind, biomass or hydroelectric generation facilities and to hybrid systems.

Forty-four states have net metering policies; California has the highest solar penetration. With the Oct. 12 ruling, Hawaii joined five other states that do not require their utilities to provide net metering. Those states are Alabama, Tennessee, Texas, South Dakota and Idaho.

The Alliance claims that Hawaii's net metering program worked well, and was a significant component of the Legislature's recent decision to seek 100 percent renewable energy.

Under the Oct. 12 ruling and order, new solar energy costumers in Hawaii will have three options: self-supply, grid-supply and time-of-use.

Under self-supply, solar costumers cannot send excess energy to the grid. This option is for "customers who primarily intend to consume all of the energy produced by their system."

Self-supply customers will get a minimum monthly bill of $25 for residences and $50 for small businesses, according to the complaint.

Grid-supply customers will get energy credits on their monthly bills, but at a significantly lower rate than under net metering.

Time-of-use customers will get incentives to shifts their energy use to the middle of the day, when solar power is most powerful.

The grid-supply and self-supply programs took effect Oct. 21; the time-of-use tariff has not yet been established.

"The decision creates substantial uncertainty about the rates at which customers will be credited for exported electricity in the future," the lawsuit states.

"The PUC decision goes far beyond anything proposed by even notoriously anti-solar Hawaiian Electric," Alliance spokesman Bryan Miller said in a statement. "The PUC's decision is neither fair nor justified."

According to the lawsuit, "Although the PUC invited and received hundreds of public comments in addition to the positions of the parties, it fails to hold a public hearing," which is required by state law.

Notice of the hearing must include a statement of the topic, a copy of the proposed rule and the date, time and place of the public hearing, among other things.

By failing to notify the public and hold the hearing, "The PUC exceeded its statutory authority, violated state law and violated Constitutional due process," the complaint states.

And the Public Utilities Commission failed to make the ruling available to public until a day after it was signed and in effect, the Alliance says.

PUC Chairman Randy Iwase seemed confident that the ruling would stand.

"We could've [ended it] as of September of last year, but we didn't," Iwase told Pacific Business News.

"The decision we rendered is a good one, and will withstand scrutiny, and we will meld a defense," Iwase said.

The PUC ruling came as Hawaii reached record levels of rooftop solar penetration. The Environment America pegged the solar power capacity per Hawaiian resident at 312 watts, the highest amount of solar per capita in the nation.

The Alliance seeks declaratory judgment and reversal, modification or remand of the PUC's Oct. ruling and order. It also wants the court to declare that the PUC has no authority to issue the decision under its investigative powers, and a preliminary and permanent injunction against its implementation.

The Alliance is represented by Mark Valencia with Case Lombardi & Petit in Honolulu.

LINK>>> Lawsuit Text