PGE Hints at Intention to Raise Rooftop Solar Costs
Posted on March 10, 2015 by Bob Jenks
Tags, Energy
PGE recently filed a general rate case asking the Public Utility Commission (PUC) to increase rates by a little more than 3% in 2016. CUB is just beginning its review of PGE’s request. However, our initial read did pick up on PGE’s plans to seek higher charges on customers with rooftop solar. This proposal is concerning to us for several reasons.
Several states have seen utilities go after rooftop solar by proposing to raise fixed monthly charges on customers who choose to install rooftop PV systems. Not only is PGE planning on proposing something similar, it is citing Wisconsin as a good model. Wisconsin utilities have proposed some of the most extreme anti-solar proposals in the country. If this is the model PGE intends to follow, it will be as divisive here as it has been in Wisconsin.
Here is what PGE’s CEO, Jim Piro said in testimony:
“PGE has seen increased adoption of distributed solar in recent years. While customers should continue to have the option to install solar generation on their premises, the current regulatory framework does not adequately address the subsidization of these customers by the rest of PGE’s customers.
“The Public Utility Commission of Oregon (OPUC) recently opened a value of solar docket (UM 1716) and PGE looks forward to participating in it. Though PGE does not have a specific proposal in this general rate case, we think some of the policy issues can be addressed through pricing mechanisms such as a customer charge that differentiates between the distributed generation customers’ use and benefits from the grid, and the use and benefits for other customers. We also hope to evaluate options considered by other states, including those most recently adopted in Wisconsin.”
Fixed monthly charges undercut the economics of net metering programs, which allow customers to install solar panels and then only pay for the net energy they purchase from the utility. If a customer uses 800 kWh in a month, but generates 600 kWh, the customer would purchase 200 kWh from the utility. Net metering is one of the key innovations that have allowed solar investments to flourish in the past few years.
Now, many states around the country are fighting against these programs, and Wisconsin has been at the forefront of this fight over the last year. Solar industry penetration in Wisconsin is relatively low, which raises the question: why is Wisconsin making such a ruckus over solar?
The answer seems to be opportunity. Wisconsin’s politics and government have become extremely partisan in recent years. The Midwest Energy News published a great summary of the fight in Wisconsin, which begins with:
What’s the matter with Wisconsin?
That’s what many clean energy proponents are asking, in the wake of the Wisconsin Public Service Commission (PSC)’s decisions in favor of rate restructuring that could virtually kill solar and other types of distributed generation across much of the state.
Despite significant public opposition, the PSC in November decided to approve rate cases filed by utilities We Energies, Madison Gas & Electric (MGE) and the Wisconsin Public Service Corporation, which could drastically reduce the feasibility of installing solar or other types of renewable energy for consumers in the Milwaukee, Madison and Green Bay areas.
In Wisconsin, the three big electric utilities came in with rate proposals to raise the fixed charge part of the bill that everyone pays regardless of what they use or generate. Madison Gas and Electric, for example, proposed increasing the charge from $10.44/month in 2014 to $21.83/month in 2015 and to $48.66/month in 2016.
By charging high fixed costs, the utility will discourage customers from installing solar rooftop systems. In Wisconsin this seemed to explicitly be the goal of many of the advocates of the increases. Utilities also proposed to eliminate the ability of customers to install solar units as part of a solar leasing program. Solar leasing is a popular option in Oregon, and is a key part of the business strategy of Solar World, which has a manufacturing plant in Hillsboro.
Ultimately, the Wisconsin Public Service Commission agreed to support a settlement that raised the fixed charges to $19 per month in 2015.
While the utilities in Wisconsin, like PGE, claim that this is about eliminating subsidies, a Wisconsin judge has found otherwise. Last month a Wisconsin judge overturned one of these rate cases, finding that the record did not contain evidence to support the decision.
While Wisconsin courts are having trouble with the utility attacks on solar power, PGE likes them and sees a model that it can bring to Oregon.
Let’s hope they think this through a bit more.
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04/27/17 | 0 Comments | PGE Hints at Intention to Raise Rooftop Solar Costs