In a hearing held before the Michigan Public Service Commission (PSC), DTE Energy was finally granted its golden goose: the abolishment of net metering in its service area. And the writing had been on the walls for nearly three years.
In 2016 the Michigan legislature passed Public Acts 341 and 342, which required the PSC to phase out net metering and create a new distributed generation program. The PSC was also tasked with measuring and pricing “a distributed generation customer’s incoming and outgoing electricity flows separately on an instantaneous basis” and established “a method for consistent and appropriate cost-of-service billing”.
What happened next was that DTE made a proposal wherein the electricity that a customer uses from the grid would be billed at the customer’s full retail rate and the energy the customer sends out to the grid would be credited to the customer at the average monthly wholesale price of energy; an inflow/outflow model where one flow was valued much more highly than the other.
This initial proposal was rejected by the PSC, who ordered that the outflow credit be based on the power supply component of the customer’s retail rate, minus transmission charges. This was done because the commission felt that DTE would be getting credit for transmission that it was not providing. Eventually, the final outflow credit that was approved for DTE came to 7.477 ¢/kWh for the first 17 kWh per day.
This all became final with the announcement of the commission that:
Today, as directed by the 2016 laws, the commission is issuing a landmark decision to phase out net metering and to phase in a new methodology that reflects a cost of service for customers participating in the program.
Here’s a fun little graphic showing what the payback period for a residential system will look like under the new guidelines:
Here's how the net metering replacement will affect payback for DTE's rooftop solar customers — compared to the original policy and what DTE had proposed. pic.twitter.com/kJZKelTcNU
— Jim Malewitz (@Jmalewitz) May 2, 2019
The biggest savior, if it can be called that, for distributed solar in DTE’s service area came from a motion that the commission denied, as DTE also looked to establish a system access contribution charge on distributed resource owners. As reported by pv magazine at the proposal’s inception, this charge would have been $2.28-$2.31 per kilowatt basis based on the rated capacity of the PV system. The charge was defended by the questionable claim that such customers are “are not supporting the costs of the infrastructure required for their service.”
So, just to be clear, in this case, the PSC has accused DTE of getting credit for transmission that it was not providing and DTE has accused customers of not supporting the costs of the infrastructure required for their service.
Lastly, the state regulators also approved a substantial rate hike for DTE customers, one which raises prices almost 9% for use an average of 500 kilowatt hours of electricity a month. In a dollar figure, these customers will see bills increase by $6.19.
At the end of the day, it’s Michigan and DTE. The gutting of net metering has been a foregone conclusion for years now, today just happened to be the date of execution. All of the decisions made today: the new compensation model, the rejection of the access fee and the rate hikes will take effect in one week, on May 9.
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DTE is just the worst.
The Light Poem – Andrew West
The digital light of the man made city shatters night’s darkness
Night’s peacefulness
Organical night
Night’s ability to make one self more in touch with matters more than at hand
But at the source
Crashing into the solar energy of organic light during day
The light of life meets the light of death
Tell me where light comes from
I ask science
He laughs
Light is a creator
Royal blue ocean no wind smooth as glass
Not a ripple as far as sight travels glistens
Warmth is represented in the reflection… I listen
And wait for life to evolve into itself
Mother earths children are gifted with mathematical light
The perfect angle… man calculating how to survive, using sun’s rays
The sky is the page measuring the rotation of stars and tracking the ages
Light that was produced when we were yet to be
Has finally reached us
Look up
Energy created millions of years ago is touching your face
I’m a DTE customer who lives in a condo, where I cannot install PV panels, and I think this change is absolutely fine. Net metering ignores the costs associated with outflow electricity, dumping them on all the other customers in the service area.
“Costs with outflow electricity”? Do you mean the electricity that your neighbors are providing the business down the street, without having the involve the transmission grid?
I suggest you do more research on the value of distributed energy and the benefits that it can provide, and not just from the perspective of a company whose guaranteed profit is threatened by rooftop solar.
Solar provides energy during peak hours. It saves DTE from foolishly investing capital into more expensive fracked nature gas production that will sit idle at night.
That resembles some typical utility talking points. However, DTE was specifically asked during the hearing to identify all alleged “costs” incurred when it receives outflow electricity. There were none. Instead, the hearing record showed only benefits from solar customer exports . You should thank your solar neighbors for “dumping” valuable and clean electricity on you.
Agreed – Here is California, with aggressive Solar policy and distributed energy for home – we have avoided the construction of new transmission lines to deal with demand.
https://pv-magazine-usa.com/2018/03/27/distributed-solar-and-efficiency-saves-california-2-6-billion-on-power-lines/
This just means more money in the pockets of people! Homeowners! facility partners!
In California, the classic NEM agreement ended in 2015 (No longer do you “give a KW take a KW” You buy the energy and sell the energy at the Time-of-Use that it is both used and produced – AND – for every KW iIhave to buy from the grid I have to pay $0.02 to get it. so If at 3pm I export a KW to the grid, I get $0.31 – When I pull a KW from the grid at 6pm. I am charged $0.33; however, I am almost always producing more power than I am using and if I do need to tru-up after 12 months. the fee is minimal.
Anna, let me tell you what DTE has done to you. When someone who has installed solar PV on their roofs and excess is pushed back onto the grid and right into the meter at your condo. DTE as most electric utilities place a charge on your electric bill each month for ‘fuel’ charges, line and maintenance fees, when the power is coming from a neighbor over the wiring between the home and your condo facility. When this excess power is used by your condo unit, does DTE remove the fuel charge and line and maintenance fees from the “local distributed non-fueled generation resource”? What will the homeowner with solar PV do? Go one step further and install smart energy storage to his/her existing solar PV system and become self consuming of his solar PV generation each day. This will allow the solar PV adopter to use their generated power more efficiently by storing PV generated energy during the day and using the energy in the late afternoon and early evening to power their homes. Late at night during off peak hours, the smart energy storage system will recharge with off peak or super off peak electricity to help run the home the next day from sunrise to early morning when the solar PV picks up the load again.
Now where does that leave you? The neighbor with solar PV has little to no monthly electric bill, the excess power is stored for later self use. This leaves DTE short on monthly electricity sales. DTE approaches the MPSC with a rate case for recovery of “lost revenues” and your electric rates will go up again. I find the Jim Malewitz chart interesting, but probably not accurate. You see Anna, when DTE raises electricity rates the ROI of the solar PV system gets shorter, so instead of the predicted 17.7 years, it might just be 15.5 years with the first rate increase. The probability of more people adopting solar PV for their use, will again create “lost revenues” for DTE and another rate increase for you. Again the solar PV adopters system will pay off in maybe 13 to 14 years. So on and so forth.
You can be assured, your condo’s electric bill will go up in perpetuity over the next decade to cover “lost revenues” and “stranded assets” for DTE.
So DTE killed Net Metering for its customers. Will CMS soon follow? Looking to install an array before the Michigan utility monoploy destroys solar. Between the real property tax and now net metering little incentive to go green.
I can assure you that the DTE new net metering program will fail as they can not even properly credit customers on a 1 to 1 basis. We are moving to an energy storage system with each system we sell, so customers can keep the power they use and significantly reduce the amount of power they purchase from DTE. Dave Lewenz Power Home Solar.
This is the irony of what DTE wanted. But, it is the typical corporate way now – short term gain even though you push customers out long term.
It is amazing that the utilities insist on driving their customers away. If you use their grid to pump the power to your neighbor and get credit for it later then they want to pay you at wholesale rate treating your power production the same as a centralized edge generated resource using the entire transmission infrastructure instead of the point of use generator that it is using little if any transmission infrastructure. If you add solar with storage you can use all of your power at the effective avoided rate. As these systems become more reliable with redundant distributed generation resources, this negates the need for the utility the same way the internet negated the need for land line telephone.
The real problem with solar for the utility is that it reduces the amount of capital investment that is needed to support their generation and transmission. The evolution of the utility business model has made them into an investment bank simply placing capital into service in order to achieve a fee in securing a return for their investors. Increased solar generation means that they can not place as much capital into these guaranteed return investments that the FERC and CPS guarantees them. So now how do they continue to place capital, and get the rate payers to secure the returns for their investors?
If the utility was actually providing value we would not have to legislate to protect them from the progress of technology. They really need to rethink their business model. They are not the investment banker that they used to be but should be what the rate payers really need, a customer service and support organization.
It’s wear and tear on an alternative energy systems batteries people. $150 dollars a year. That’s all grid tie is worth. Get a battery inverter, not a grid tie inverter and cut DTE loose. The added benefit is that you’ll have power in a grid down event. Get smart. Its not about money but rather being self sufficient and independent of the corporations. I’ve been off grid 20 years. I know what I’m talking about. It was really expensive when I started. Now it’s cheap. Yeh that’s right!! Do it and stop whining.
And how exactly are they suppose to innovate in an environment they cannot control because the regulators control everything? Its a catch 22. You can’t expect the utilities to change there business model unless the regulators change it for them.
Only when the last tree has died and the last river been poisoned and the last fish been caught will we realize we cannot eat money.
– Cree Indian Proverb
These rooftop solar homes can only generate for their neighbors on the same neighborhood transformer.
Essentially they are lowering the demand on the primary side of the transformer leaving more for the grid. Energy companies complain these people are not paying to use the lines and transformers. Is there a law requiring all residential homes have connection to electrical utility?? If so dont complain about the equipment being used.