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Kansas Supreme Court Invalidates Demand Charges For Residential Solar Customers

Solar energy advocates have won an important legal battle against demand charges imposed on rooftop solar customers in Kansas.

In 1980, the Kansas legislature passed a law that said utility customers using renewable energy may not be subjected to “higher rates or charges” or “any other prejudice or disadvantage.” Though the meaning of the law should be intuitively obvious even to a slow witted fourth grader, authorities in Kansas, including the Kansas Corporation Commission, brazenly ignored it and approved a request by Westar Energy and Kansas Gas and Electric to add a monthly fee — known as a demand charge — to the utility bills of people who installed a rooftop solar system. A lower court then blessed the demand charge provision, demonstrating why it is important to select judges who are capable of reading simple English.

Image courtesy Tesla

Several renewable energy advocacy groups, including EarthJustice, the Sierra Club, and Vote Solar, appealed the lower court decision to the state’s Supreme Court. In an opinion by judge Caleb Stegall, the court ruled the 1980 law “clearly prohibits the Utilities from price discrimination against distributed generation customers, something the Utilities admit they are trying to do.” It said the attempt to treat customers with rooftop solar systems differently than other customers is “simply price discrimination” and that the “rate design is unlawful.” It remanded the case back to the KCC to do what it plainly should have done in the first place, which was follow the law.

Judge Stegall in his opinion made note that the Kansas statute was passed following the chaos that resulted from the OPEC oil embargoes of the 1970s. He referred to “America’s crisis relationship with fossil fuels” and noted the law exhibited an early awareness of global climate change. The state law “codified the goal of incentivizing renewable energy production by private parties,” Stegall said.

David Bender, the Earthjustice attorney who argued the case, said in a statement after the ruling, “As the Kansas Supreme Court recognized charging solar customers more for their electricity is price discrimination, plain and simple. Kansans, like all Americans, have a right to the free solar energy delivered to their roofs every day without fear of illegal utility charges that serve only to preserve the utility’s anti-competitive monopoly and prop up uneconomic fossil fuels. We are happy the court agreed with us.”

In a report about the case, PV Magazine says, “Kansas, although it is one of the sunniest states in the nation, recently had just 8 watts of small-scale solar per capita, versus the national average of 69 watts per capita. According to SEIA, Kansas ranks 47th by state with 47 MW of solar installed. Solar provides just 0.14% of the state’s electricity.”

The ruling in Kansas pertains only to Kansas. Unless other states have laws on the books identical to the one passed by the Kansas legislature in 1980, this decision will not be binding on courts in other states. But it is a precedent that can be cited by EarthJustice, the Sierra Club, and other renewable energy advocates as they continue to battle the discriminatory practices employed by utility companies to punish those who dare generate their own electricity on their own rooftops. It’s a small step forward in the transition away from fossil fuels and toward the clean energy strategies of the future.

 
 
 
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Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. 3000 years ago, Socrates said, "The secret to change is to focus all of your energy not on fighting the old but on building the new." Perhaps it's time we listened?

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