On the last working day of the summer, the Utah PSC released its decision in the recent rate case of Rocky Mountain Power (RMP), a subsidiary of Pacificorp (itself owned by Berkshire Hathaway Energy). RMP had proposed a net metering facilities charge, a flat fee to be imposed on all residential customers that have rooftop solar and participate in Utah’s net metering program. Now the good news: the solar fee was soundly rejected.
This was a real win for customer choice and energy self-determination. RMP’s proposed solar fee was yet another example of a utility working to undermine a successful net metering program without justifying its proposal with actual costs and benefits.
The Commission rightly found the evidence, such as it was, to be “inconclusive, insufficient and inadequate to make a determination under a recently passed statute that requires an evaluation of costs and benefits.
“We conclude under these circumstances the better course is for [RMP] and interested parties to gather and analyze the necessary data, including the load profile data that is foundational to this analysis, and present to us their results and recommendations in a future proceeding.”
There were many concerns with the RMP proposal starting with some shady math. RMP’s proposed solar charge was derived based on the reduction in revenue resulting from using one’s own investment in solar generation. In other words if you consume less, we will charge you more!
The proposal took the average residential customer electricity purchase (698 kWh per month) and the average residential solar customer purchase (518 kWh per month), calculated the difference in distribution cost recovery between these two average consumption numbers, and called it a subsidy. The problem of course is that there are many more thousands of residential customers without solar who use even less than that each month, who were not being asked to pay a charge for the shortfall. Nor was the utility suggesting that a customer who uses more than the average electricity be given a credit for the excess payment. Nope – not even a thank you.
Another problem with RMP’s proposal was the narrow view it used to justify its sweeping solar fee proposal. It singled out one aspect of the entire spectrum of costs and benefits provided by distributed solar, and only for one class. This approach, known in regulatory parlance as single issue rate making, is dangerous for regulators because the regulated Company selectively seeks more revenue for a narrow part of a large issue when there may be other related factors that swing in the opposite direction. The good folks at the Commission did not take the bait however.
In a state whose motto is “Industry,” it’s troubling to find a major institution like RMP trying to discourage private investment in new technology that saves customers money, supports local business innovation, and adds value to the utility grid. RMP’s frontal attack on a customer’s right to self-determination fortunately did not go unnoticed. A huge congratulations is due to the many Utah stakeholders – local advocates, businesses, members of the faith community and others – who voiced their support for rooftop solar choice in the state. And thanks to the Utah PSC for their leadership in requiring a fact-based discussion of net metering impacts.
As requested by a number of parties in this case, the PSC is opening a new docket to look at the costs and benefits of net metered solar generation that will kick of on November 5. We may not be out of the woods, but thanks to the PSC, we are on the right path.
