Vote Solar to challenge Massachusetts’ demand charge ruling in court

Last week’s decision by the Massachusetts’ Department of Public Utilities to allow Eversource to charge its net metered customers demand charges sparked outrage in the industry – and one solar advocacy group is turning that outrage into action.

January 12, 2018 Frank Andorka

Image: Government of the Commonwealth of Massachusetts

Well, that didn’t take long.

With the ink barely dry on the decision by Massachusetts’ Department of Public Utilities (DPU) to allow utility Eversource to impose demand charges on its net metered solar customers, solar advocate organization Vote Solar said it will appeal the decision to the state’s Supreme Court as soon as early February, with the support of Earthjustice.

One week ago, the DPU decided, in a ruling it described itself as “atypical” and outside its usual rulemaking procedure, to allow Eversource to impose demand charges of $2.21/kW and $2.71/kW on its two classes of residential customers to cover a “cost shift” to non-solar customer it claims is happening.

Their argument isn’t unusual. For years, utilities have argued that rooftop solar customers, because they produce electricity on their own property, they don’t pay for grid upkeep.

Research, of course – like a recent study by Lawrence Berkley National Laboratory – says the argument is technically correct, cost shifting only happens at high rates of penetration – 10% or more. And even at 10%, research suggests an impact of only half a cent per kilowatt-hour.

Massachusetts residents got around 5% of their electricity from solar in the first nine months of 2017, according to the U.S. Department of Energy’s Energy Information Administration’s latest numbers.

While the move isn’t unprecedented (Salt River Project, an unregulated utility in Arizona, has imposed similar charges), it does break with the general nationwide pattern of regulators rejecting such charges.

The move inspired widespread opposition in the industry, and Vote Solar said it will file the suit in part because the order could cost solar consumers between $4,400 and $9,400 over the life of a solar-electric system.

“The Commission’s decision to effectively hike rates for future solar customers is wildly out of step with Massachusetts’s commitment to clean energy and climate leadership and the DPU’s own record of ensuring that solar customers are fairly compensated for the valuable local power they generate,” said Nathan Phelps, program manager for Vote Solar and expert witness in the case. “We are committed to reversing this decision and ensuring that the Commonwealth can continue building its clean energy economy, creating jobs, and fighting climate change.”

Vote Solar also argued the decision compromises the state’s clean energy economy, which today employs more than 100,000 people and has driven more than $11 billion in investments in the sector.

“This decision departs from the Department’s own precedent, is not supported by the evidence in the record before the Commission, and is counterproductive to the state’s own energy policies. We will ask the Supreme Judicial Court to get right what the Commission got wrong,” said Hannah Chang, Earthjustice attorney.

In 2017, Vote Solar and five other leading regulatory experts released a report, titled “Charge without a Cause,” demonstrating that demand charges are both unfair to customers and are an ineffective mechanism for utility cost recovery.

Vote Solar and Earthjustice expect their appeal to the Massachusetts Supreme Judicial Court to be filed by early February.

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.