Net metering programs are great for many reasons— not only do they encourage solar, they are also good for the grid, the environment, other grid users, and even utilities. No matter who you are, it’s a win. This makes the pushback against these programs not only surprising but also counterproductive. Yet the struggles continue. Here’s an overview of some recent net metering challenges.
Tucson Electric Power tries and tries again to reduce their payment to net metering customers
Earlier this June, Tucson Electric Power (TEP) made a proposal to the Arizona Corporation Commission (ACC) to lower their reimbursement rates to net metered rooftop solar owners. Their claim was that the proposed payment would be compensation for grid expenses, as well as being “fair market pricing,” since the payment would be the same amount as what they pay for excess power from utility-scale solar in their service territory. Currently the retail rate payment to net metered customers is $0.11 per kWh, but under the proposed rate it would go down to $.058 per kWh for new solar customers.
The ACC staff responded with a recommendation that rates for net metering customers should be considered within a full rate proceeding, rather than standalone regulatory dockets. After receiving this recommendation, TEP withdrew the proposal, and instead will include the same request in a rate case later this year. Beginning on January 1, 2017, they will ask for new rates that will cover returns on investments made since 2011. This request will have to go through a public hearing before the ACC considers it, which will be happening some time next year.
In Minnesota, new solar customers face an increased charge for net metering
A recently passed energy and job bill, HF 1437, will allow municipal utilities and electric cooperatives in Minnesota to charge more to net metering customers. This increase will start next month for new solar customers only; current ones will not be affected. According to the new law, any additional charges made to net metered customers must be “reasonable and appropriate for that class of customer based on the most recent cost of service study.”
However, for Xcel Energy, the state’s dominant electricity provider, the rules will work a little differently. Xcel will be able to file a multi-year rate plan with state regulators and request payment from net metering solar customers based on their specific performance metrics.
Iowa’s two major utilities refuse to net meter solar installations under third-party ownership
Iowa’s two main utilities Alliant Energy and MidAmerican Energy, are refusing to allow net metering for any solar installations owned by third parties. MidAmerican argues that net metering is only for customers who buy all of their power from utilities, and Alliant says that third party metering would be violating the rate tariffs because they would be “reselling” energy.
One of the major impacts this will have is on a plan to install solar arrays in the city of Ashbury. Because the company installing it — Dubuque-based Eagle Point Solar — is a third party, net metering would not be allowed, making the scale of the project no longer financially viable. This refusal also violates a Supreme Court ruling last summer in a case that involved Eagle Point, which gave them permission to net meter in Dubuque.
Without the ability to net meter, the project will have to be significantly scaled down, from a total of 586 kilowatts to 356 kilowatts. This will change the initial plan, which involved two arrays being installed, one 230 kW system in City Hall and one 356 kW installation for the city’s wastewater treatment plant, offsetting 90 percent of the building’s electricity use.
Ohio regulators may limit net metering
The Public Utilities Commission in Ohio finalized their net metering rules last year, which were subsequently challenged by American Electric Power (AEP) and brought to the state supreme court. The rules would use an “identical rate structure” to determine how much net metering customers would be paid for the excess energy fed back to the grid, essentially paying them back the full retail price for energy. AEP stated that other ratepayers would have to pay for them, and that solar customers were being subsidized for using solar — a stance we know could not be further from the truth.
Nothing has been determined yet, but the latest word is that in a plan to settle the dispute, regulators may decide to add limitations to the net metering rules.
In Colorado, net metering customers may also face some challenges
Currently Colorado’s biggest rural electric co-op, Intermountain Rural Electric Association (IREA), offers one of the highest credits in the state for solar energy fed back to the grid. But this may change after a request to their board of directors asking to reduce the reimbursement for net metering customers. This would reduce the retail rate from $0.123 per kWh to $0.065 per kWh.
Nevada compromises on an amendment to a new bill
Last May, Nevada Senator Patricia Farley (R) drafted an amendment to the energy and job bill SB 374, which called for a cap on net metering, as well as changing the state’s energy conservation standard. The amendment was based on the utilities’ argument that other ratepayers were subsidizing solar customers, and that the distributed generation was cutting into their profits. By the end of May, Nevada Energy and The Alliance For Solar Choice (TASC) agreed to cap net metering at 235 megawatts and require Public Utilities Commission of Nevada to design a net metering tariff by December 31, 2015. If they do not meet this deadline, the current tariff will remain in place until the new one is finalized.
Wisconsin appeals for solar
In Wisconsin, solar advocates are appealing a decision made by the Wisconsin Public Utility Board to increase fees on distributed solar customers in We Energies Utility territory. The current policy also limits the availability of net metering. We Energies cites a lack of evidence supporting net metering, despite the fact that the utility had previously commissioned a reports that showed solar to be a cost-effective option.
A report put out by Environment America disproves all arguments made against net metering
Environment America Research and Policy Center did a study to find the true impact of net metering. Their report, “Shining Rewards: The Value of Rooftop Solar Power for Consumers and Society,” came to the unsurprising conclusion that net metering benefits everyone. “While some utilities claim they’re subsidizing solar panel owners, our report shows the opposite is probably true,” said Bret Fanshaw, Solar Program Coordinator with Environment America. “If anything, utilities should be paying people who go solar more, not less.”
The report looked at 11 net metering studies. Eight showed that the value of solar energy was higher than the average local residential retail energy rate, and that the median value of solar power was nearly 17 cents per unit, compared to the nation’s average retail electricity rate of 12 cents per unit. Additionally, electric systems are getting a net benefit from solar owners. This includes reduced capital investment costs, less energy costs, and reduced environmental compliance costs. “Using independent data and evidence, this report confirms what we have long known—when solar panels go up, everyone benefits,” said Bran Klein, senior attorney with the Environmental Law and Policy Center.
Making sense of net metering
Despite all of the struggles net metering goes through, there are fewer excuses that utilities can use to stop net metering programs. “Solar power’s rewards are far greater than its costs,” said Environment America’s Bret Fanshaw. “That’s why we should be encouraging more of it across the midwest and across the country, not penalizing it.”