Utah’s largest electric utility company wants to place new charges on rooftop solar customers, a proposal that critics say would unfairly penalize the customers; in addition, they fear it could lead to a scenario similar to the one that recently played out in Nevada, with rooftop solar companies abandoning the state after policymakers weakened the net metering system.
Rocky Mountain Power’s plan would nearly triple monthly customer charges and peak-time usage charges for rooftop solar customers, although the company says the new charges are necessary to create an equitable system between solar and non-solar customers.
The Utah Public Service Commission is holding a hearing on Wednesday to get public input on the company’s controversial proposal. Next week, the commission plans to hold a multi-day hearing where Rocky Mountain Power, solar companies, and other official intervenors in the case will get to state their positions.
Under Rocky Mountain Power’s proposal, new solar customers would pay a $15 per month service charge, compared to $6 per month now; a $9.02 per kilowatt demand charge for “on-peak” demand; and a 3.81 cents per kilowatt hour charge for electricity. From May to September, on-peak periods occur from 3 p.m. to 8 p.m. From October to April, on peak occurs from 8 a.m. to 10 a.m. and 3 p.m. to 8 p.m.
Currently, if rooftop solar owners generate more electricity than they use, the utility company buys the excess power at the retail rate . This practice is known as net metering. Rocky Mountain Power estimates these solar customers annually underpay $400. The total cost shift is worth $667 million over 20 years, according to company projections.
“Rooftop solar benefits all customers by reducing the need to build new polluting power plants, saving all customers money,” the Sierra Club told state regulators. “Rooftop solar also protects our air and water by using clean, free sunshine as opposed to dirty fossil fuels. These benefits far outweigh the cost shifts alleged by Rocky Mountain Power, which at most amount to only a few pennies a month for average non-solar customers”
States that choose the same path as Nevada, where utilities succeeded in implementing “similarly discriminatory” rate designs to the one proposed by Rocky Mountain Power, “have suffered a near complete loss of rooftop solar development,” the Sierra Club said. “This loss has meant less economic growth and fewer choices for customers.
In 2014, Rocky Mountain Power first floated the idea of a $4.25-per-month charge on net-metered customers. Instead of approving the charge, state regulators opened an investigation into the costs and benefits of the company’s net metering program.
Utah’s fight is indicative of a tension found in several states. The most contentious battle occurred in Nevada, where state regulators in 2015 overhauled the rules governing residential solar, slashing the credits solar panel owners received for sending power back to the grid. In June 2017, though, Nevada Gov. Brian Sandoval (R) signed a bill restoring net metering rates close to the retail level for rooftop solar customers.
Solar companies Vivint Solar Inc., Tesla, and Sunrun had shut down their operations in Nevada after the net metering program was cut, but all the companies announced they would resume operations contingent on the bill becoming law.
In comments filed with Utah regulators, Vivint Solar, a retail solar power company, said the traditional electric system did not provide consumers with viable alternatives to generate or receive reliable electric power. “The introduction to the market of distributed solar energy systems has begun to change that. By providing consumers with at least partial alternatives for their energy needs, distributed solar has begun to introduce competitive pressures that will only increase as technology improves over time,” Vivint Solar said.
Rocky Mountain Power’s parent company, PacifiCorp, and NV Energy are subsidiaries of Berkshire Hathaway Energy, a company owned by investor Warren Buffett. Berkshire Hathaway Energy officials have stated that net metering should be scrapped in favor of a system that recognizes a utility’s fixed-grid costs and uses distributed generation at times when it is needed most.
Rocky Mountain Power has offered some form of the net metering program to its customers since 2002. Utah’s rooftop solar market has nearly doubled every year for the past 10 years, and the estimated annual economic benefit to Utah’s economy rose to $300 million in 2016. According to the Department of Energy’s 2017 U.S. Energy and Employment Report, solar electric generation represents more than 5,894 jobs in Utah.
Rocky Mountain Power contends the costs of its net metering program exceed its benefits, causing non-net metering customers to increasingly shoulder additional costs to subsidize net metering customers’ use of the electric system. “The exponential rise in solar installations — a 600 percent increase since the commission initiated this docket — means this cost-shifting will grow quickly in the coming months and years,” Rocky Mountain Power said in a January 2017 filing.
The PSC will likely set a time frame for issuing an order on Rocky Mountain Power’s net metering program at the conclusion of next week’s hearing, the commission said.