Dive Brief:
- Texas regulators approved a settlement between El Paso Electric and other stakeholders to drop demand charges and a $11 fixed charge aimed at rooftop solar users.
- The settlement, filed with the Public Utilities Commission of Texas (PUCT) last month, came after "fierce opposition" to the rate proposals from El Paso residents, according to the Texas Observer.
- The settlement follows a decision by Xcel Energy in Colorado to strike a settlement with stakeholders to drop a grid charge and focus on time-of-use rates, the preferred rate design by solar advocates.
Dive Insight:
The latest settlement in Texas comes as part of a recent trend of utilities and solar advocates in some states skirting contentious policy battles in pursuit of compromise proposals.
El Paso Electric's rate increase request last year included a monthly surcharge and demand charges for rooftop solar users to help cover $1.3 billion in generation and distribution assets.
Solar advocates claim the proposal has already slowed down sales, but the sector could be set to regain some traction with the settlement. The Alliance For Solar Choice (TASC) said the deal a growing trend of utilities and other stakeholders "agreeing that residential demand charges are not the way forward."
Just this week, Xcel and solar advocates in Colorado struck a similar settlement to drop demand charges and push TOU rate adoption. That followed a decision from Arizona's UniSource Energy Services to abandon its push for mandatory demand charges for all residential customers, altering them to apply to solar owners only.
In those states and elsewhere, utilities have floated demand charges as a way to recover fixed grid costs in a more nuanced way than through traditional fixed charges. Many critics, however, worry that consumers do not have the tools or the know-how to respond to the rates, which charge consumers based on their peak monthly usage.
