Oncor settlement ends byzantine solar rate request

Public Utilities Commission of Texas (PUCT) today approved a settlement between myriad petitioners, including the Solar Energy Industries Association (SEIA), Texas Solar Power Association and Dallas-based utility Oncor, that required the utility to withdraw its plan to add what pv magazine in March called “bizarre” fixed charges to the bills of solar consumers.

“The settlement agreement is a big win for the 10 million Texan families served by Oncor who will now continue to have the option to install solar and other distributed-resource technologies like storage without being subjected to the onerous and discriminatory minimum bill charge that would apply only to them,” said Benjamin Inskeep of EQ Research. “It avoids what would have been a catastrophic tariff for many families and completely undermined the value proposition of solar DG for many.”

In March, Texas-utility Oncor filed a proposal that would have imposed either a minimum bill of $3.53 for every kilowatt of maximum demand that customers with distributed resources – solar, micro-wind turbines or batteries – had or the standard residential rate – whichever was more expensive for the customer.

“I’m not sure exactly what Oncor was thinking when they proposed the [tariff], but in general, I’ve seen a growing number of “creative” utility proposals like Oncor’s that would impose new charges on solar and other distributed generation customers,” Inskeep said. “Clearly, utilities are concerned about revenue erosion.”

“But penalizing [distributed generation] customers for their investments years after is hardly a reasonable solution,” Inskeep continued. “Fortunately, the vast majority of these proposals have been rejected, withdrawn or significantly curtailed.”

Inskeep was also troubled by Oncor’s proposal because:

1. it did not provide for any grandfathering period for any existing distributed generation customers;
2. Oncor would have used a complicated and opaque calculation to determine a different minimum bill value for each DER customer, which would have significantly complicated the solar sales process;
3. since Oncor was calculating a customer’s unique minimum bill based on the customer’s past energy usage or demand, a customer had no power to take action in the future to reduce his or her minimum bill (e.g., through energy efficiency investments or adding energy storage to an existing solar DG system); and
4. the proposal undermined a number of long-established ratemaking principles.

It appears from a series of documents hidden in TPUC’s antiquated public records database that, to get Oncor on board with withdrawing its byzantine rate proposal, the signatories agreed to let the utility increase residential base rates by 3.4%, despite having TPUC settled rates in effect. The new rates will take effect on November 27.

Nevertheless, the solar industry seemed pleased that it managed to get the original proposal withdrawn.

Sean Gallagher, vice president of state affairs for SEIA, said the settlement would allow current and future solar customers the freedom to choose their energy source without fear of financial penalty.

Texas has some of the strongest solar resources in the nation and is home to nearly 9,400 employees in the U.S. solar industry, according to The Solar Foundation’s National Solar Jobs Census.