Solar on the roofs: a tariff case raises the stakes on what is fair for consumers

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SALT LAKE CITY – Solar energy advocates say a Rocky Mountain Power proposal to reduce the amount it pays future rooftop solar owners for excess energy is a threat to further development of the renewable energy resource and will discourage further investment from Utah customers.

A tariff case on the proposal is expected to be heard this week by the Utah Public Service Commission after the utility company completed a three-year business case of the value of solar power on rooftops.

Kate Bowman, renewable energy program manager at Utah Clean Energy, told a webinar on Friday that the proceedings will define the future of rooftop solar power in Utah.

“Access to rooftop solar energy is a choice people want to make and a choice they should have,” she says.

Rocky Mountain Power’s net metering program began in earnest in 2008, with only 372 customers. In 2017, when it ended at that compensation rate, there were 27,800 rooftop solar customers in the state. Since then, it has had nearly 36,000 clients.

Nonetheless, Bowman said commercial and residential solar only make up 2% of Utah’s energy mix, with plenty of room to grow.

After the traditional net metering program ended, Rocky Mountain Power implemented a transition program agreed to in a stipulation approved by the utility board to reduce the rate from 8% to 10% for new customers.

In the latest proposal, Rocky Mountain Power is asking for a reduction in the compensation rate for new solar customers by 84%, advocates said.

“We believe that we should only pay the market rate and not the prime rate,” spokesman Spencer Hall said.

He added that the utility company’s recommendation to the Civil Service Commission on the issue of customer-generated electricity is to minimize the cost shifting to other customers by setting a rate that Rocky Mountain Power considers fair compensation.

But Bowman strongly disagreed that this was “fair” and said the benefits of rooftop solar power were vastly underestimated by the utility company.

“If Rocky Mountain Power’s proposal is approved, it sends a strong signal to potential solar customers that their energy exported to the grid is essentially worthless,” Bowman said.

Sachu Constantine, general manager of regulatory affairs for Vote Solar, said the national organization is reviewing solar power generation by more than 3,000 customers in Utah and has come up with its own rate of pay.

The 24 cents per kilowatt hour it earned – compared to Rocky Mountain Power’s rate of 1.5 cents, reflects avoided costs such as additional investments in infrastructure or loss of energy via transmission lines to the utility company because rooftop solar energy is generated on site. In addition, the analysis took into account climate benefits such as reduced carbon emissions and jobs created by the solar industry.

“It’s about fairness and allowing customers to participate in the value of solar,” he said. pointing out that such a low rate paid by Rocky Mountain Power will discourage further investment in rooftop solar power.

The utility company’s proposal simply does not reflect the value that rooftop solar power provides, Constantine said, adding that the group simply wanted a return to the net metering tariff, which was compensation based on a Direct kilowatt-per-hour gained, not a portion of it.

Josh Neves, attorney for Utah-owned Blue Raven Solar, said the future of solar power will be determined by what the Public Service Commission decides after Tuesday’s hearing.

After the net metering rate ended in 2017, Neves said, many solar companies in Utah closed their doors and moved their businesses elsewhere.

“Rocky Mountain Power’s current proposal will easily be the most regressive rate restructuring in the country and literally eliminate thousands of jobs here in Utah.

Hall said the export rate paid to rooftop solar customers is borne by other customers and does not affect the utility company’s profits.

He added that the state’s Office of Consumer Affairs, which had spoken out against the unfairness of net metering for those not on the system, generally agrees with the tariff reduction.

Correction: An earlier version mistakenly claimed that the export rate influenced the company’s profits but should have said it did not affect profits.

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