The Kansas Corporation Commission (KCC) unanimously rejected Evergy’s proposed rate changes for residential solar customers. The ruling denied the utility’s plan to impose a charge on customer-owned solar. It also turned down the utility’s proposed alternative plan to impose a minimum bill for all customers.
The Climate + Energy Project, the Sierra Club, and Vote Solar opposed both proposals and applauded the regulators’ decision. Dorothy Barnett, executive director of the Climate + Energy Project, called it a “big win” for solar and all Evergy ratepayers.
The 36-page decision ordered Evergy to put its residential distributed generation (DG) customers back on a two-part standard residential rate design, eliminating a demand charge.
Regulators originally approved a three-part rate design for residential DG customers in September 2018 as part of a Westar (now Evergy) rate case. The Sierra Club and Vote Solar, both parties to the docket, filed an appeal. In April 2020, the Kansas Supreme Court reversed the judgment of the Court of Appeals and the commission, calling the three-part design “price discriminatory” and sending the matter back to the KCC for more work.
In its Feb. 25 order, the commission turned down two alternate proposals from Evergy to recoup DG customer costs that the company claimed are not captured in the standard residential rate. The first proposal called for a grid access fee of $3.00/kW of installed DG capacity. The alternative called for a $35 minimum monthly bill for all residential customers.
The KCC decision means that rates for standard residential and DG residential customers will be identical, at least until Evergy’s next scheduled rate case in 2023.
Clean energy advocacy groups argued that minimum bills disproportionately harm low-wealth and fixed-income families, as well as discourage energy conservation and efficiency investment by reducing customers’ ability to control their electric bill.
Claudine Custodio, regulatory manager at Vote Solar, said that local clean energy saves money for all grid customers by generating energy where it is used, reducing the grid’s operating costs. She said the ruling allows Kansans to keep benefiting from solar investments that they or their neighbors make and prevents a “harmful, discriminatory fee.”
Despite the unanimous decision, some KCC members said they believe solar customers are being subsidized and said they liked the possibility of additional fees.
“The solutions purported by the company, we believe were flawed,” Commissioner Susan Duffy told the Topeka-Capital Journal. She said that rather than having “kicked the can down the road with this order,” regulators instead had given stakeholders “an opportunity … to work together and explore the best solution not only for rooftop solar issues, but other issues as well.”
And Commission Chair Andrew French told the newspaper that the issue continued to need to be addressed. He said he was “convinced” that there is “some amount of subsidy that flows to [solar] customers associated with their use of the grid.”
In a concurring opinion, Commissioner Dwight Keen indicated he was open to requiring electric utilities that want to enact rates that impact DG residential customers differently than non-DG customers to identify the services that DG customers will receive, and also show how those services are different from, or in addition to, what are provided to non-DG residential customers.
The KCC encouraged Evergy to explore rate designs that address the DG subsidization issue. It also encouraged all stakeholders to explore legislative changes to update Kansas’ net metering laws and other statutes.
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All other commodities have the delivery costs included in the price. Imagine going to the gas station and the owner says “since you use less gas than the big SUV we are going to charge you an add-on fee to cover our delivery costs.” Crazy, right? But that’s exactly what the electric utilities are saying to solar owners; you use less energy than your neighbor so you have to pay an add-on fee.
The really ironic part of all this is that solar owners are actually helping the power companies by reducing load on the shaky grid. No good act goes unpunished indeed.
Great analogy!