HB 244: Allowing Utahns to Contract for Solar Electricity

This bill passed both the House and Senate unanimously.

Libertas Institute supports this bill.

House Bill 244, sponsored by Representative Francis Gibson seeks to exempt residential rooftop solar companies who sell electricity service from regulation by the Public Service Commission because they are not considered a “public utility.”

Many Utahns are interested in utilizing technologies that provide alternative energy sources. While government subsidization should not pick winners and losers in these markets, government regulation should not stand in the way either.

In Utah, electricity is provided by state-regulated utility monopolies. Because these utility companies are given this regulated-monopoly status, the Public Service Commission (PSC) is charged with overseeing the rules and regulations that govern utility operations including pricing. Any “public utility” falls under the oversight of this Commission. With the advent of affordable residential rooftop solar panels, many people are buying or leasing these panels for some (or all) of their own personal electricity needs.

Given the significant up front cost of solar panels and installation, some customers would prefer to merely purchase their power from the company who provides the panels, rather then own or lease the panels themselves. This arrangement in other states is called a “power purchase agreement” (PPA). Unfortunately, in Utah, due to regulation by the PSC, these PPAs are not allowed. This is partly because the PSC considers these solar companies to be “public utilities,” despite not being a regulated monopoly.

This bill recognize these companies as independent energy producers. These companies are not public utilities and are not monopolies, and should not be subject to the same regulation as other public utilities.

Consumers should have choices in the marketplace. Insofar as residential solar energy production is possible, consumers should be free to contract with companies willing to offer such services without unnecessary interference from the state. This limited exception for rooftop solar is a welcome reform in Utah.