Connect with us

Hi, what are you looking for?

CleanTechnica

Clean Power

Not Just Illegal, Targeting Solar Facilities With Fees Is Also Poor Policy

Originally published at ilsr.org.

Should utilities be able to add special fees on customers that have solar or small wind installations?

Not only is it against Minnesota state law, but in our recent comments to the state’s Public Utilities Commission, we explain how one-off fees on customers using distributed generation to cut their energy consumption violates the spirit of good utility rate design, and inhibits development of a more efficient electricity system.

Six Minnesota utilities were singled out by the Commission in the recent investigation, all guilty of having fees imposed (usually associated with metering) on customers with distributed generation systems. The fees were wide ranging, as were the purported costs they were intended to recover. The fees also directly conflict with the state laws meant to encourage “maximum encouragement” of distributed renewable energy resources.

From our comments:

“Targeted fees on qualifying facilities can hardly be considered consistent with ‘maximum possible encouragement,’ especially when there has been so little evidence presented by the state’s electric utilities that such fees reflect a full and accurate accounting of the costs and benefits of such facilities. A regulatory tool does exist to fulfill this purpose, called the value of solar tariff, but no utility has yet opted to use it.”

It’s unfortunately not unexpected to see utility companies reacting to change on the electric grid in this manner, as several other technological shifts in other industries suggest:

To an extent, this reaction reflects the slow and conservative nature of the electric utility business. Electric utilities are often as unprepared for the rapid technological changes in efficiency or solar as were typewriter manufacturers or landline phone companies were for computers or cell phones. But such a lack of preparation is not an excuse to penalize customers whose own investment of capital can offer system benefits greater than their compensation, as suggested by the premium of Xcel’s 2016 value of solar price over its residential retail rate.

What could utilities do differently? In Minnesota, specifically, they could learn a lot from the Commission’s Alternative Rate Design proceeding, exploring ways to design rates in a way that incentivizes customers to act in a way with maximum benefit to themselves and the electric grid. Examples include time-of-use rates that charge customers less to use electricity when it costs less to deliver, or reward them more for putting power onto the grid at times of high demand.

The fees aren’t just illegal or poorly conceived, as we say in our comments, “they reflect a knee-jerk reaction to change—reflected in inconsistent and incomplete rationale—rather than a thoughtful and transparent approach to appropriate rate design.”

We can do better.

Download the full comments here.

For timely updates, follow John Farrell on Twitter or get the Energy Democracy weekly update.

 
Appreciate CleanTechnica’s originality? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador — or a patron on Patreon.
 
 

Advertisement
 
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Written By

John directs the Democratic Energy program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His seminal paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

Comments

You May Also Like

Clean Transport

Electric vehicle fans cried foul over the dim showing for EVs in the new US Postal Service delivery truck contract, but Oshkosh Defense may...

Batteries

GM has come a long way since the 1966 Electrovair II, with big plans for new EV factories and a little hint about new...

Air Quality

To the families of Fife considering SGN's offer of 'free' hydrogen appliances, be aware that you would be putting your loved ones at risk...

Cars

Is the hesitancy for the average US consumer to switch to an EV psychological or structural? What information needs to be shared with a...

Copyright © 2021 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.