Across the Southeast, consumers are pushing back as utilities press for increases in the fixed fee on monthly electric bills.
Fixed fees hurt anyone who uses less electricity, such as customers with rooftop solar, or low-income customers who live in smaller housing units, or consumers who buy a more efficient air conditioner.
Customers with solar net metering “go away” if “you put a high cost” on all customers, whether they “take one kilowatt-hour or 1,000 per month,” advised Jacob Williams, general manager and CEO of the Florida Municipal Power Agency, in a speech last July to executives who operate municipal utilities across Florida (video at 35:20).
Low-income consumers get hit the worst by higher fixed fees. They generally “shoulder the highest percentage of rate increases” when fixed fees go up, because the additional burden falls hardest on low-consuming customers, and low-income customers are generally in that category, reasoned the National Association of State Utility Consumer Advocates in a 2015 resolution.
Thousands of citizens in Georgia, South Carolina, and Tennessee have opposed utility attempts to increase fixed fees in recent months—many of them through campaigns organized by the Southern Alliance for Clean Energy (SACE).
Georgia Power’s proposed rate hike would combine a higher fixed fee with higher per-kWh prices, a double whammy that would raise the bills of low-consuming customers more than 25%, as shown in this graphic from SACE:
SACE helped persuade hundreds of Georgia Power customers who opposed the rate increase to submit letters to Georgia regulators, while allied groups engaged thousands more customers, with many attending a public hearing or rally. Georgia regulators will decide the rate case on December 17.
After Duke Energy proposed to triple its fixed monthly fees, SACE and allies began organizing early this year and persuaded more than 1,000 customers who opposed the increase to attend one of five hearings across the state, which were convened by South Carolina regulators. Eleven hundred customers submitted written comments opposing the tripling of fixed fees.
“We largely defeated” the Duke proposal, said Bryan Jacob, solar program director for SACE, but Duke did get approval to increase the fixed monthly fee to $11.78 for Duke Energy Progress customers and $11.96 for Duke Energy Carolinas customers. Overall, Jacob considers utility attempts to increase fixed fees to be the biggest ongoing issue regarding distributed solar in the Southeast.
The Knoxville Utilities Board in Tennessee has raised the fixed fee on electric bills from $6 per month in 2010 to $20.50 per month now. SACE delivered over 3,000 customer signatures this year asking the utility to “freeze the fees,” and collected hundreds of stories from customers facing an energy burden. The utility in its most recently announced plans did not include a fixed fee increase, which SACE says in a post is a hopeful sign, but adds it will remain watchful.
In Florida, the state’s municipal utilities will decide whether to follow their wholesale electricity provider’s advice to make customers with solar “go away” by imposing “a high cost.” Vote Solar has reached out to its supporters who are served by those municipal utilities, and asked them to express their concerns to the wholesale provider’s board chairperson, said Katie Ottenweller, Southeast director with Vote Solar. This challenging situation in Florida appears to be still in its early stages.
Another tool in the box
One way to think of fixed fees is that if your electric bill had only a fixed fee, and no per-kWh charge, after you paid the high fixed fee the electricity you used would be free, and there would be no financial incentive to use rooftop solar or reduce your electricity consumption. The further a utility moves in raising the fixed fee, the worse the fixed fee is for rooftop solar and efficient use of electricity.
Fixed fees are one more way that utilities can block solar, in addition to hijinks in modeling utility integrated resource plans (as in Georgia, Tennessee, North Carolina, Virginia, Michigan, Montana, and Puerto Rico), and paltry compensation for rooftop solar, as planned in Tennessee.
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