Utah Solar Energy Companies Feel Threatened By Rocky Mountain Power Proposal

“We’ve been fighting to make sure that the cost and the benefit are properly evaluated. What Rocky Mountain Power has done is only look at the cost and to say that solar customers are somehow an undue burden on the grid.”

So, we have a solar power dilemma on our hands.

Now before I begin, please remember I’m no solar energy expert and I didn’t even stay at a Holiday Inn last night, so please be patient.

The dilemma revolves around a recently submitted proposal by Rocky Mountain Power that would drastically affect Utah’s residential solar power customers if passed by the Utah Public Service Commission. In essence, the proposal centers on increasing costs for Utahns who want to power their homes via solar. So why is this happening?

Before we can continue, we first must understand the issue of net energy metering (NEM). For a solar powered house, the middle of the day represents peak harvest time — the sun is out and shining brightly, so solar panels can absorb energy at a high rate. This energy production, however, runs contrary to the times a house is actually using the most energy — morning and night. Because of this NEM exists, which allows solar energy customers to export energy to the utility grid during down times and retain that energy during peak usage times for no extra charge. This process happens through a credit structure, with Rocky Mountain Power required to provide a credit for the energy exported to them by a solar power customer, and then exchange that same power for the credit when it’s needed.

Here’s why Rocky Mountain Power is upset. They performed a study that says a typical residential solar customer underpays their actual cost of service by roughly $400 per year, a cost that is then shifted onto the shoulders of other non-solar residential customers. This comes from the issue of NEM talked about above, where Rocky Mountain Power argues two things:

1. They must currently credit solar power customers at a much higher rate than they could purchase the same amount of energy from large solar farms for a lower cost.

2. Solar customers are not paying their fair share for maintaining the power grid.

Under their proposal, Rocky Mountain Power would hike rates for only solar energy customers, adding hundreds of dollars per year to the cost of a solar energy system. In a statement from Senior VP Gary Hoogeveen, this reasoning was outlined.

“Rocky Mountain Power supports renewable resources as long as an appropriate rate is in place that allows customers to use private generation without adversely affecting other residential customers. Customers partially relying on renewable energy through the net metering program must still pay their fair share of the costs to serve them,” he said.

Here’s why solar power advocates are upset. First, they believe this to be a classic case of a monopoly attacking a potential challenger. A similar proposal to change net metering rules was passed in Nevada and the results have been devastating to solar power providers/consumers — Solar City, Sunrun, and Vivint Solar all ceased operations within the state and within 12 months, rooftop solar applications dropped by 99%. Solar power advocates fear that the current proposal would result in similar destruction for Utah, negatively affecting the economy, job creation, consumer choice, and environment/air quality. If that were to happen, it’s not hyperbole to say that residential solar power systems within Utah would virtually be eliminated.

Second, advocates are calling into question the results of Rocky Mountain’s study. The belief is a biased entity (Rocky Mountain Power) has submitted a proposal to the Public Service Commission based on a study that takes into account only the cost of service for solar customers, rather than conducting a cost/benefit analysis that examines not only the cost, but the benefits provided by solar customers to both the utility and non-solar customers. Solar advocates argue there are numerous benefits being completely ignored by the study which help offset the cost, which you can read here (see items 10 and 11).

“Rocky Mountain Power is very clear that they weren’t looking at any external benefits of solar,” Erica Dahl, Director of Public Policy and Government Affairs for Vivint Solar, told Beehive Startups. “That’s part of the pushback, this can’t be taken out of context. You need to look at the cost and benefit. Solar has demonstrated the benefits, it’s just not something Rocky Mountain Power or the Commission has indicated they want included.”

On a basic level, the Public Service Commission’s job is to act in the best interest of ratepayers by finding a fair and balanced approach. Public outcry against this proposal is based upon the fear that this isn’t be done, with solar power being railroaded in favor of an existing monopoly. For Utah, this will boil down to whether or not the Commission views Rocky Mountain Power’s study as a valid, all-encompassing look at what’s happening. And solar advocates are arguing that it is definitely not.

“We’ve been fighting to make sure that the cost and the benefit are properly evaluated,” said Dahl. “What Rocky Mountain Power has done is only look at the cost and to say that solar customers are somehow an undue burden on the grid. When you look at what Public Service Commissions in other states have done, many of them have found a net benefit for solar. Minnesota, for instance, their Public Service Commission did an independent study and found that solar customers generated $36 million in excess benefits for the utility.”

If passed, the proposal would go into effect on December 9, meaning anyone wanting solar energy in Utah after that date would be subjected to new rates. In response, solar power advocates have started an online petition to bring awareness that has generated 9,000+ signatures in less than two days, calling the proposal “one of the most aggressive, anti-consumer, anti-competitive, and anti-solar proposals ever brought forth by a utility in the United States….We ask the Commission to conduct a robust and fair cost-benefit study so that Utah homeowners can continue to invest in solar and energy independence.”

You can read the entirety of Rocky Mountain Power’s proposal here.

You can read the Utah Solar Energy Association’s rebuttal here.