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Oxford council narrowly votes down removing tax on solar

OXFORD, Ga. - The Oxford City Council narrowly voted down a proposal by member David Eady that would have eliminated the city’s standby capacity charge for customers who install solar panels or other distributed generation technology.

The final vote was 4-3 against the measure. Mayor Jerry Roseberry cast the tie-breaking vote. 

Eady told The Covington News that Oxford requires a customer with a DG system to pay a monthly standby capacity charge based on the capacity rating of the system. 

“For residential customers, the monthly stand-by capacity charge is $11.15 per kilowatt (kW) capacity of the system. Residential systems are typically three to five kW, so the additional monthly charge for a typical system would be $33.45 to $55.75 per month, regardless of how much electricity you purchase from the city utility each month. Customers would continue to pay the monthly base charge (currently $15/month for residential) and normal electric use rates ($0.1072 to $0.1535 per kWh for residential, depending on thresholds of use) on any electricity provided by the city, as reflected on the meter.”

He told council members Monday that doing away with the standby charge would not greatly impact the revenue generated by the city’s electric rates. 

“The gist of it is, it’s fairly inconsequential. If we get 10 people who install the typical solar roof, we’d get about $2,500 less revenue per year from our electric rates based on the savings that they would be achieving.

“If we had 100 people, which is highly unlikely, install the same solar panels, we’d have about $25,000 less in revenue per year.”

Roseberry said he opposed eliminating the charges citing the need to further examine its financial impact on the city.

“I’m opposed to this,” he said, “I think we need to better look at our financial situation in the city, not just now, but in the future.”

Roseberry said Oxford requires citizens to pay other minimum fees,

“We require our citizens now to pay a minimum water fee every month. They’re required to pay for sanitation every month, whether they put anything in the trash or not. And it’s not unreasonable to ask everyone if you’re hooked up to the system that you bear some of the burden.

“This city, right now, owes over $3 million to MEAG (Municipal Electric Authority of Georgia). We’re not meant to pay it right away, but we’ve got to keep those numbers in mind. There’s a lot more to it than just the people who want to put in solar and save money.”

Eady said even if the standby charge was eliminated, customers with solar would still pay the base rate plus the charges for any power they use.

“We all pay a base rate, which is to help cover the fixed cost of our electric utility and then we pay our variable rates. So people who are customers in Oxford will still pay that base rate and they’ll still pay the variable rate on any electricity they use,” he said.

“What this is doing is removing a tax on distributed generation technology like solar panels, which is a discriminatory tax without any basis.”

Roseberry said while he would one day like to install solar, the city needs to get a better handle on its finances before eliminating the charges. He said people selling solar were behind the push to eliminate the charges.

“The people who are pushing this so hard are the commercial people that sell the service. They’re the ones that are really pushing it hard,” he said, “I hope one day to put solar in my home, but the finances of this city, we need to be sure we’ve got a good handle on those things before we start to making changes like this.” 

Eady reiterated that eliminating the charges would not have a major impact on city finances.

“The city itself, from a revenue standpoint, would be minimally affected by people installing solar panels,” he said, “ We have about 600 or so customers and the probability of 10 percent of those customers installing solar is very low.

“But if 10 percent of our customers install solar panels, 60 customers, we’re still only talking about less than $18,000 impact on our revenue. And one hundred installs is around $25,000 in lost revenue. We’ve got a very large margin on our electric utility right now to absorb some revenue erosion form people installing an energy conservation technology like solar panels. 

“And again, I believe it’s a discriminatory tax and it holds no place in our electric rates.”

Jeff Wearing, Sarah Davis and Mike Ready voted against eliminating the charge. George Holt, Jim Windham and Eady voted in favor.

After the vote, Eady explained why he thinks the charge is unfair.

“If you install all new windows in your house, put in new insulation and put in a new heat and air system and reduced your electric load by 30 percent, good on you. We get 30 percent less money from you every month,” he said.

”If you put in a solar panel that reduces your energy consumption by 30 percent, you’re going to get taxed for the capacity of that solar system in the amount of $11.15 per kilowatt. So you get taxed if you put in solar but you don’t get taxed if you put in insulation. They both have the same effect. That’s why I say it’s a discriminatory tax.”

Eady also said the move to eliminate the standby capacity charges in not being pushed by the solar industry. He said it is community driven.

“Several community members formed a nonprofit group, Sustainable Newton, about a year ago and started looking at what they could do to promote sustainability within the county. It was decided to initiate a “Solarize Newton” campaign in order to leverage collective buying power to lower costs for folks interested in making the investment in solar panels for their homes and/or businesses. 

“Sustainable Newton partnered with Georgia Interfaith Power and Light and Solar Crowdsource to develop and implement the solarize campaign, similar to those in many other Georgia communities—for example, Savannah/Tybee Island, Dunwoody, Decatur, Athens, and Atlanta. The timing of this initiative is to ensure folks also can take advantage of the 30 percent federal income tax credit for installing solar panels, which starts to sunset next year. 

“As the group started planning the initiative, I pointed out that Oxford and Covington have these stand-by capacity charges that effectively “tax” solar installations and make the investments less cost-effective. I’ve been speaking out against the fee in Oxford since about December 2016, so this is not something that is coming from the solar developers; it is coming from residents within our community.”