Rocky Mtn Power will compare cost to serve solar customers before fixed charge decision

Dive Brief:

  • The Utah Public Servic Commission imposed a new rate calculation on Rocky Mountain Power (RMP) last week, requiring the utility to compare its cost of serving customers who receive net energy metering credits for rooftop solar generation with those who do not, the Salt Lake Tribune reports. 
  • The ruling, adopted Tuesday, compels the utility to compare its standard cost of service determination for customers with net metered rooftop solar and those without. The calculation is intended to allow commissioners to evaluate distributed generation (DG) costs and benefits before deciding on the utility’s request for a monthly charge.
  • RMP officials argue the fixed charges are is necessary to cover infrastructure costs it claims are shifted to non-DG owners by Utah’s 4,000 customers with rooftop solar or other generation, about 0.5% of RMP’s consumers. Renewables advocates say the calculation fails to capture the full range DG values, including the avoided costs for new generation, transmission, and distribution assets, avoided pollution, and the economic and customer advantages of a distributed grid.

Dive Insight:

Rocky Mountain Power, Utah's biggest electricity provider, is a subsidiary of PacifiCorp, which is owned by Warren Buffett’s Berkshire Hathaway Energy. A bill passed by the Utah legislature in the most recent session requires the PSC to study the costs and benefits of distributed generation before ruling on rate changes like the charge proposed by RMP.

The PSC plan requires RMP to calculate and compare costs of service for a single customer class that includes “net metering customers” and two customer classes “wherein the net metering and non-net metering customers are segregated.”

Rocky Mountain Power attempted last year to impose a $4.65 monthly charge for customers with deistriuted generation, but regulators rejected that push, ruling the utility must “gather and analyze the necessary data, including the load profile data that is foundational to this analysis [of net metering], and present to us their results and recommendations in a future proceeding."

The net metering proceeding in Utah was one of the 91 state-level actions across 42 states related to net metering, rate design, or solar ownership during Q3 2015, according to "The Fifty States of Solar," a recent report from the North Carolina Clean Energy Technology Center. They included 26 actions related to fixed charges to all customers, 22 involving net metering policy changes, 14 that would impose charges on solar and/or DG owners, and 13 requiring state-specific solar valuation or net metering studies.

The nationwide push for fixed charges and reforms to retail rate net metering was precipitated by a 2013 Edison Electric Institute report entitled "Disruptive Challenges" that encouraged utilities to redesign their rate structures to account for increasing amounts of distributed generation cutting into their value streams.

Those changes have been met by stiff opposition from the solar industry and renewables advocates throuhout the country, who view the rate changes as attempts to stifle the growth of clean energy and consumer-sited generation, and recently some sector observers have called for a middle path that more accurately values distribtued generation. The author of EEI report, for instance, recently encouraged utilities to pursue different policy options in a new white paper for the clean energy think tank Ceres. 

Better solutions to the utility revenue challenge than monthly charges would be “inclining block rates, reforming net energy metering, use of bidirectional meters, time-of-use rates, accountability incentives, and identifying new revenue opportunities for utilities,” Peter Kind, author of "Pathways to a 21st Century Utility," told Utility Dive.

Filed Under: Solar & Renewables Distributed Energy Regulation & Policy Corporate News
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