Pepco will have to pay back ratepayers roughly $800,000, after the D.C. Public Service Commission found the utility violated the law in its management of solar programs in the District.

At issue are metering and accounting practices for community solar facilities, which serve some 6,200 D.C. residents. Community solar is a way for people to benefit from clean energy without having to invest in rooftop panels. Customers can subscribe to a solar facility and earn credits based on the facility’s energy production, lowering their electric bills.

Pepco bungled its handing of community solar accounts, the commission found, by failing to provide solar credits in an accurate and timely fashion and at times undercounting solar generation.

“The impact of that was that thousands of people in these programs were not seeing the bill savings every month that they should have been seeing,” says Liz Veazey with the nonprofit Solar United Neighbors. “If people don’t think that these programs work and they’re skeptical of them and they’re not actually seeing the credits on their bills, that’s a big problem.”

The vast majority of community solar subscribers in D.C. — about 5,000 — are enrolled for free through the city’s Solar For All program. The program is available to any resident making less than 80% of the area median income, and promises to cut subscribers’ electricity bills in half for 15 years.

The Office of the People’s Counsel, which represents D.C. ratepayers, and the D.C. Office of the Attorney General jointly filed a complaint with the commission in March, 2022.

People’s Counsel Sandra Mattavous-Frye says it’s important to make sure these solar programs are working smoothly.

“Community solar levels the playing field, so that all consumers can receive and can participate in the benefits that can be achieved through solar,” says Mattavous-Frye. “It’s no longer, and should never have been, where only those people that could afford to pay for solar installations actually get it.”

At the heart of the case, Pepco argued it had the right to install its own meters at community solar facilities, and base its solar credits off of those meters. But the commission found this violated D.C. law, and that Pepco must rely on meters installed by the solar facility owners. It matters because in the past, Pepco’s meters have not matched those of the facility owners, and have undercounted solar generation, according to the complaint.

Pepco undercounted solar generation in the Solar For All program by 5,000 megawatt hours between January 202o and September 2021, according to the complaint — equivalent to the power needed to run about 500 homes for one year.

At the same time, Pepco failed to pay the owners of community solar facilities what they are owed, including the District Department of Energy and Environment. Facility owners are supposed to be compensated for any solar credits that have not been subscribed by customers. But Pepco did not do this in a timely or accurate manner, the commission ruled.

In its filings with the commission, Pepco admitted to some of the billing problems, and said they have since been remedied. Ben Armstrong, Pepco’s director of communications, declined an interview, but said in an email that the company is working to comply with the commission’s decision and will begin removing its meters.

“The move toward a cleaner, more sustainable energy future is not without challenges,” Armstrong said. “We remain committed to helping expand access to solar and other distributed energy resources and providing our customers with innovative and affordable options to meet their evolving clean energy needs.”

The commission decided not to fine Pepco, because there was no indication the violations were intentional. Instead, the commission ordered Pepco to repay ratepayers for the costs incurred by the company’s illegal installation of its own meters at more than 300 community solar facilities.

“We gave Pepco the benefit of the doubt that its flawed reading of the law and our regulations was not a deliberate attempt to undermine them,” the commission wrote. But, the commission added, that doesn’t mean that Pepco can dump “the consequences of the company’s error onto the backs of ratepayers.”

Pepco says it spent about $805,000 on the meters, a cost the company passed on to its ratepayer base. The commission has asked for a more precise accounting of the cost and will then determine repayment details. In addition, the commission ordered Pepco to review its past allocation of community solar credits under the supervision of an outside auditor. The commission is also considering revamping its community solar regulations to make sure similar problems don’t happen again.

Mattavous-Frye says Pepco’s mishandling of community solar is an impediment to D.C. meeting its goals to cut carbon emissions, transition to clean energy, and provide solar to low-income residents. Under D.C. law, 100% of electricity sold in the District must come from clean sources by 2032, including 15% from locally-generated solar. The District also has a goal to sign up 100,000 households in the Solar For All program by 2032.