The Utah solar industry and Rocky Mountain Power (RMP), the state’s largest utility, have been locked in what seemed like an intractable battle over the future of net metering in the state. Well, yesterday that battle came to an end as the two fighting sides came to a compromise with which both could live.
Under the agreement, current net metering customers will be grandfathered under current “export credit levels” (Utah’s way of describing net metering) until 2035, but full-rate reimbursement will end for new solar customers after Nov. 15. New customers and installers will have a three-year period to adjust to the eventual implementation of a rate program based on a calculation of the value that solar provides to the grid. During the transition, customers will still receive credits – just not at full retail rates.
Also during the transition, the state’s Public Service Commission (PSC) will oversee a study that will be completed no later than 2020 to determine the value of solar that will inform the rate structure after the adjustment period.
Discussions between RMP and solar groups have been ongoing since December, when a RMP rate increase request faced such public outrage that the utility asked the PSC to suspend its rate request, a request the commission granted.
Fourteen interested parties joined the agreement, including:
- Utah Division of Public Utilities
- Utah Office of Consumer Services
- Auric Solar
- Intermountain Wind and Solar
- Legend Ventures, LLC (d/b/a) Legend Solar
- Vivint Solar
- Utah Clean Energy
- Utah Solar Energy Association
- Utah Citizens Advocating Renewable Energy (UCARE Utah)
- Healthy Environment Alliance of Utah (HEAL Utah)
- Salt Lake City Corporation
- Summit County
- Park City Municipal Corporation, agreed to terms, conditioned upon final approval by respective governing bodies.
Utah’s Public Service Commission is expected to vote on the proposal at its Sept. 19 meeting, and all parties involved are urging it to approve the deal.
Gov. Gary Herbert applauded the deal, taking the unusual step of issuing a press release on it.
“By bringing key parties together, we have found a collaborative and strategic approach to meeting our net metering challenges,” said Gov. Herbert. “With this fair and balanced agreement, Utah will soon become the first state in the nation to preserve the vital role of our emerging solar industry as it becomes sustainable, without subsidies, in our diversifying energy market.”
The Utah Solar Energy Association gave its enthusiastic stamp of approval to the deal.
“Throughout this process, the Utah Solar Energy Association had two clear priorities: to keep rooftop solar affordable for Utahns and preserve the 4,400 jobs the solar industry has created,” said Ryan Evans, president of the association. “This compromise maintains solar as an affordable and secure investment, encourages self reliance and promotes choice in our energy market.”
Cindy Crane, president and CEO of RMP, said she was pleased that the agreement removed an alleged “cost shift” from solar users to non-solar users, a common refrain from utilities that national studies suggest only happens at rates of more than 10% (Utah’s current penetration rate is 3.6%, according to the Solar Energy Industries Association). In addition, 16 state-level studies have proven the cost-shift argument to be Game of Thrones mythical.
“While no compromise is perfect, this settlement sets in motion a process to do just that,” Crane said. “Subsidies will continue for a transition period until a new market-based solution is established that balances the interests of all customers, whether they choose to install solar panels or not.”