When Rocky Mountain Power (RMP) and solar advocates in Utah reached a net metering compromise on Aug. 29, a battle over the centerpiece of progressive solar policy appeared to come to an end. With 14 influential groups, including the Utah Solar Energy Association, supporting the agreement, the upcoming Sept. 19 Public Service Commission (PSC) meeting to approve the deal appeared to be a formality.
Turns out, maybe not.
When Steven Michel, chief of policy development for environmental group Western Resource Advocates, looked more closely at the deal, his jaw dropped when he discovered, hidden deep in the fine print of the agreement, a scheme emerged whereby RMP plans to recover the money “lost” through the net metering programs by charging fees to non-solar customers.
Interestingly, the state’s solar industry, which routinely fights such fees when the plan is to charge them to solar customers, has remained silent on the program, called Energy Balancing Account (EBA) charges, largely using the argument that the fees are temporary and will fade away as net metering costs go down.
Michel, on the other hand, almost immediately filed written objections with the PSC.
“Allowing [RMP] to immediately recover the value of export credits through the EBA or another pass-through mechanism will increase customer bills by potentially tens of millions of dollars – without any general rate case determination that [RMP’s] current revenues are insufficient to support its cost of service,” Michel wrote. “[RMP] should not be permitted to pass through its EBA or other mechanism the value of the export credits until after the conclusion of its next general rate case.”
Michel maintains RMP’s request is outrageous, given that they have can’t justify what the future costs of net metering will be without a rate case. He also maintains the proposal could allow the utility to revive its wildly unpopular tri-level rate plan that drew the ire of the solar industry and its customers, leading to the utility to withdraw the request eight days later before it even got a hearing.
The withdrawal kicked off the negotiations that led to the compromise now at issue, which grandfathered current net metering customers at 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.
After the middle of November, 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 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.
At the time of the compromise, it looked like smooth sailing since 14 groups signed off – but Western Resource Advocates’ name was conspicuous by its absence.
“Under the [compromise], [RMP’s] Utah customers will have to pay additional charges that would not exist in the absence of the [agreement],” Michel wrote. “At the same time, these additional charges will result in additional revenues to [RMP] – without any showing in a general rate case that the company needs additional revenues to recover its cost of service.”
Utah’s RMP ratepayers should know whether the solar compromise reached will hold one week from today.