by Environmental Defense Fund Associate VP of Clean Energy John Hall
The list of solar power’s benefits goes on and on.
Solar doesn’t pollute or waste water. Solar is getting cheaper every day, making it an increasingly affordable option for people to produce their own electricity and save money on their electric bills. The solar industry is employing thousands of people across Texas. And numerous studies show solar helps keep the electric grid balanced and reliable. What’s not to like?
Well, some utilities see customer-owned solar power as a threat to their profits – and want to stop its growth.
That’s why El Paso Electric has a new proposal that discriminates against homes and small businesses with solar panels. This proposal unfairly penalizes people who install solar, limits customer choice, and works against sunny El Paso’s impressive solar potential. Let’s break down the details.
The utility
El Paso Electric serves approximately 400,000 customers in West Texas and New Mexico, and supports solar power – but only when the utility owns and controls the resources. This isn’t the first time El Paso Electric has tried to block solar growth – last year, it unsuccessfully attempted to hit solar customers with a new, unexpected monthly charge. Now the utility’s back with a similar agenda.
The utility’s proposal
El Paso Electric is proposing a new rate structure that targets solar customers. If the utility succeeds, people and small businesses with solar panels will suddenly be hit with a higher monthly customer charge, as well as a new charge with which they will likely be unfamiliar: a demand charge.
A demand charge is a fee the customer pays based on the maximum amount of energy they use at any given point over the course of a month. A demand charge is normally imposed on larger commercial customers, like big box stores, not homes and small businesses. Today, El Paso Electric does not even measure the demand of individual residential or small commercial customers, meaning people don’t have the information needed to understand how their demand charge would be calculated. And if the utility gets its way, it will not notify a customer of their maximum demand for the prior month until weeks after the fact – denying customers the ability to manage their highest demand, which could result in a substantial fee.
El Paso Electric also proposes all solar customers (but not all customers) be switched to a time-of-use rate that charges more for electricity used in the summer during the hot day. If done right, time-of-use pricing can encourage the use of clean energy, but El Paso Electric’s proposal misses the mark.
People and solar lose
The utility isn’t going after the big players – like industrial customers or megastore chains – whose energy-use is significant and makes up a large part of El Paso Electric’s total demand. Instead, the utility’s targeting individual people and small businesses with solar, who have little means to fight back and make up a little more than one half of one percent of the utility’s Texas customers.
Moreover, the proposal is a bait-and-switch: El Paso Electric encouraged customers to install solar generation by offering financial incentives, and now wants to impose high charges on those same customers, who likely purchased solar to buy less electricity and save money.
El Paso Electric publicly claims to support energy efficiency and solar. For example, the utility touts its investment in solar facilities, and advertises its growing community solar program. But it seems the utility only supports solar when it owns the panels, not when customers do.
The clock is ticking
El Paso Electric’s hearing is later this summer, from August 21 – September 1. If the utility succeeds, new rates will start to be collected later this fall, but the higher rates will apply for usage since July 18th. The El Paso City Council just rejected the proposal, so El Paso Electric will consolidate its appeal of that decision into its current application at the Public Utility Commission of Texas.
El Pasoans will never be able to reap the rewards of their city’s solar potential if their utility nips customer-owned solar in the bud. Environmental Defense Fund and others have intervened in this case to protect Texas’ burgeoning solar economy and ensure El Paso Electric does not get away with its harmful efforts. Stay tuned.
This article was originally published on EDF’s Energy Exchange blog, and has been reprinted with permission.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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Thank you for your insight. As an El Paso Electric customer interested in installing solar panels in my property, I am concerned about EPE’s request for fees. However, I am also aware that there are costs associated with keeping up the electric grid and transmission system. Can you offer additional insight on the sustainability of the grid should EPE’s revenues go down?
As a voter and a consumer, I want to make sure that I am making the right decision.
Hello Omar,
This post was authored by EDF, and we published it, so I would have to pass your comment on to EDF to get their answer. But from our (pv magazine’s) side, what we have observed is that in places with small amounts of distributed solar like Texas, there is little danger that utilities will suffer a significant loss of revenues. In terms of sustainability of the grid, that is also not in danger, as places with high penetrations of renewable energy often have higher levels of grid reliability (as measured by customer-minutes per year of blackouts) than those that are more dependent upon conventional power sources.
I hope that answers your question. You can also ask this question of EDF. The original post on their site can be accessed through the link on the bottom of this article.
Christian Roselund
Americas editor
pv magazine USA