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Rocky Mountain Power Faces Uphill Battle on Proposed Net Metering Fee Hike

November 14, 2016 By Cheryl Kaften

Utah’s largest utility, Rocky Mountain Power announced on November 9 that it is proposing new rates to state regulators (Docket No. 16-035-21) for customers statewide who want to generate their own rooftop solar power, but remain connected to the utility.

The new pricing for net metering would apply only to new customer-operators; those on the existing plan would be grandfathered.

A study of what rooftop solar customers are paying – ordered by the Utah Public Service Commission in November 2015 – has established that the current rate structure is not sustainable, the company claims, with costs of $6.5 million being shifted each year to other customers, according to a report in the Deseret News-Utah.

Those expenses — which the utility company says will surge to $667 million over the next 20 years — are driving a proposed three-prong rate increase for any solar customers that sign up after December 9.

“Rocky Mountain Power supports renewable resources as long as an appropriate rate is in place that allows customers to use private generation without adversely affecting other residential customers,” Greg Hoogeveen, the utility’s chief commercial officer, commented in an official company statement.

“Customers partially relying on renewable energy through the net metering program must still pay their fair share of the costs to serve them,” he said.

The utility is recommending a three-part rate for residential net metered customers – a method similar to the rate plan used now by commercial customers with self-generation. The residential rate is separated into charges of $15.00 for a fixed customer charge, $9.02 per kilowatt for peak period demand, and 3.81 cents per kilowatt-hour (kWh) for the amount of energy used.

“Residential net metering customers now receive bill savings worth about 10.5 cents per kilowatt-hour of electricity they produce even though the energy company could purchase the same amount of electricity from large solar farms for about 3 to 4 cents,” the utility claimed.

Under the new rates, Rocky Mountain Power said it is proposing changes that will result in bill savings of about 7.1 cents/kWh for the majority of its customers.

“This value reflects the benefits from both the produced kilowatt-hours and the reduction of the customer’s demand. These savings accurately reflect the reduced costs to serve the rooftop solar customers and do not rely on any subsidies from non-rooftop solar customers.”

Net metered customers still rely on the grid 23.99 hours of each day, Rocky Mountain Power said it learned from its study – noting that, while costs for installing rooftop solar have dropped dramatically, the number of private solar customers is growing exponentially in Utah:

  • 2012 – 1,548 customers
  • 2013 – 2,222 customers
  • 2014 – 3,572 customers
  • 2015 – 6,690 customers
  • 2016 – 17,230 customers (projected)

The utility claims that it “will not make any additional money through the rate change.”

However, consumer advocates  blasted the proposal, asserting that Rocky Mountain Power is punishing rooftop solar customers, according to the report in the Deseret News–Utah.

“Consumer access to rooftop solar is a tremendous asset for Utah’s future. It creates jobs and economic growth while contributing to a cleaner, more resilient energy system. Rocky Mountain Power’s recent filing isn’t just a step backward; it is a leap in the wrong direction,” Sarah Wright, executive director of Utah Clean Energy, told the local news outlet.

“While we recognize we may need to make changes to net metering, this draconian proposal will hurt Utahans for years to come,” Wright added.

Matt Pacenza, executive director of HEAL Utah, echoed the fear that the new fees will deter the adoption of rooftop solar. He told the newspaper, “Solar has become affordable recently to a wide range of Utah families. That stops now. An investment that would pay off in a decade now will take 20 or 30 years before it pays back — if ever.”

The energy company submitted the results of the study, but the Utah Public Service Commission will determine the rate for net metered customers. More information can be found at utahsolarworks.com.

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