Oklahoma regulators consider new demand charges for rooftop solar
- Oklahoma's two largest electric utilities could soon raise demand charges for rooftop solar customers under a new tariff structure being studied by state regulators, The Oklahoman reports.
- Staff of the Oklahoma Corporation Commission (OCC) have been holding meetings to discuss implementation of SB 1456, which went into effect in November. The law allows utilities to ask regulators to design a new rate structure for customers with distributed generation, which could include new charges.
- Officials from Oklahoma Gas & Electric and Public Service Co. of Oklahoma told the paper they continue to study what they might include in new rate proposals, and both indicated that new demand charges are possible.
To charge customers more, the utilities would have to prove that customers with rooftop solar are shifting costs to customers without it. When rooftop solar owners generate their own electricity, they pay less to the utility, leading many power companies to argue that they are shifting the cost of grid upkeep to non-solar customers.
Currently, utility bills for residential customers are made of two components — a fixed monthly charge, and an energy charge that fluctuates with consumption. The demand charge would measure the peak use of each customer in each billing cycle and charge based on that highest use. While commonplace for commercial and industrial customers, such charges are rare nationwide for residential consumers, who have less flexibility in moving electricity usage to non-peak hours.
OG&E has between 200 and 250 residential customers with distributed generation, The Oklahoman reports, and Public Service of Oklahoma has about 100 net metered customers. The utilities argue that the demand charges are the best way to ensure that non-solar customers aren't burdened with undue costs for grid upkeep.
Solar advocates say that residential demand charges will hurt the industry and be unfair to residential customers.
"The ability of a residential customer to manipulate demand is severely limited," Kim Sanders, with the Alliance for Solar Choice, told the paper. "It usually will take the top usage over a 15-minute or 30-minute period of the month. You're going to catch residential owners at their most vulnerable moments, when the washer, dryer and dishwasher are all on at once."
But while demand charges could impact the solar value proposition negatively, they could help storage catch on as well. As Ravi Manghani of GTM Research told Utility Dive this spring, the need to bring down peak usage to avoid high demand charges for grid use can make storage a more attractive investment for residential and C&I customers alike.
- The Oklahoman Utilities eye tariffs for solar, wind users
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