A recent move by Wisconsin utility We Energies to not only raise electricity rates on all consumers but also to add an additional charge on those who produce their own energy and sell it back to the grid has sparked outrage within the state and beyond. The plan would raise the “fixed charge” on all customers’ electric bills from $9 to $16 a month, as well as reduce net metering — a policy that enables customers with solar panels or other forms of distributed generation to sell their excess electricity back to the grid — and add a new charge on these electricity-generating customers.
The result of such a policy, said Matt Neumann, owner of Wisconsin-based SunVest, would be dramatic: “It would not only end solar but remove the economic viability for any renewable energy in Wisconsin.” Neuman, whose company is the largest solar installer in the state, said the demand charge of $3.80 per kilowatt (kW) per month works out to about $220 per year for a 5 kW system, a deterrent for potential solar customers and an unfair penalty for those who have already chosen to go solar.
And by increasing fixed charges by 75 percent, Neumann said the utility is punishing everyone, even those who have taken steps to reduce their electricity consumption. The proposal also seeks to ban third-party ownership of renewable energy systems, meaning those customers who rent or lease, rather than owning the entire system outright.
Jess Williamson, We Energies spokesperson, said the company is “requesting modest increases that will help us to continue to make improvements to improve and modernize our grid, to meet environmental standards” and cover costs associated with maintaining a reliable electricity system. As for the additional charge and reduced compensation for customers who produce their own energy, Williamson said it’s simply a matter of fairness. “Under the current rates, they really don’t pay their fair share of grid operating costs,” she said. “We’re asking for a demand charge and also asking that instead of buying excess energy at a premium rate, that we pay a comparable market rate.”
Bryan Miller, co-chair of The Alliance for Solar Choice (TASC) and Vice President of Public Policy and Power Markets for Sunrun, said the idea that solar customers, who make up just a fraction of one percent of We Energies’ total customer base, are a serious cost to the company is “another reason this is such a frivolous case.” Miller pointed to recent testimony by the Public Service Commission’s own analyst, Corey Singletary, stating, “in light of the fact that the short-term sales risk to the utility appears fairly low, and given that the utility has not presented any evidence as to why such a dramatic increase in customer charges must be undertaken in this proceeding … I believe the Commission may wish to consider holding off on any large increases to fixed charges in this proceeding and instead open a separate generic investigation.”
We Energies’ current rate request comes as its customers already pay the second-highest electric rates in the state. “Since 2005, We Energies’ residential bills have increased 51 percent, while inflation is up 22 percent,” the Milwaukee Journal Sentinel reported. The utility’s parent company, Wisconsin Energy Corp., is currently seeking approval for a $9.1 billion acquisition of Integrys Energy Group — a move that has raised suspicion well beyond Wisconsin.
“It’s very clear they’re not looking out for the best interest of their customers, they’re looking out for the best interest of their stockholders,” said Debbie Dooley, co-founder of the Atlanta Tea Party Patriots. For Dooley, the situation with We Energies and the countless battles between utilities and solar interests across the country comes down to one simple principle: energy freedom.
“I think it’s wrong what they’re doing and it’s a tax. They’re trying to tax the sun and that’s how desperate they are to deprive their customers of energy freedom,” she said. Dooley will travel to Wisconsin next week to speak to the state’s Solar Energy Industries Association and she comes armed not only with a free market message that resonates with conservatives, but the experience of having seen that message work firsthand. Last year, Dooley spearheaded a successful campaign urging her state’s Public Service Commission (PSC) to require Georgia Power, the state’s sole investor-owned electricity provider, to significantly expand its use of solar energy.
Regardless of their opinions on climate change or other environmental issues, Dooley said the ability to exercise some degree of choice in the source of their energy is widely appealing to conservatives, particularly as the cost of solar power has declined so substantially in recent years. According to SunVest’s Neumann, in a conservative state like Wisconsin, that rings particularly true. “This is a national defense issue, a free market competition discussion, property rights, economic development — this is a Republican concept through and through,” he said.
Miller believes that the opposition to We Energies’ rate request from the state’s manufacturers and major employers like Johnson Controls, in addition to that voiced by the Commission’s own staff, will be enough to ensure the PSC’s rejection — but the implications of such a proposal are severe. “This will be rejected by the commission but if it were accepted, it would make Wisconsin the most anti-renewable energy state in the country and that is widely out of sync with the values of Wisconsin,” Miller said.
Williams said the utility has a history of supporting renewable energy and wants to continue to do so moving forward, but “in a way that doesn’t create a financial burden for customers who can’t afford it or can’t generate their own renewable energy themselves.”
The fight over the value of solar power and who stands to benefit is being waged all over the country as more and more Americans go solar and utility companies become increasingly aware of the risk the trend poses to their bottom line.
Last year, Arizona Public Service, the state’s largest utility, added what amounts to a $5 per month surcharge on solar customers. Similar proposals were met with significant backlash in Utah and Oklahoma and analysts say there will be more clashes ahead, simply because the charges aren’t addressing the fundamental problem. Utilities currently make their profit by providing two services, reliability and units of electricity, but that model “doesn’t fit in a world where I’ve got choices where my electricity is coming from, your wires or my roof,” Elias Hinckley energy and tax partner with the law firm Sullivan & Worcester, said in an earlier interview. Until that’s reconciled, “you’re throwing Band-Aids on it and hoping it goes away.”