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August 01, 2014

Rocky Mountain Power Solar Fee Heats Up Utah


Earlier this week, the Utah Public Service Commission held a two-day hearing on Rocky Mountain Power's request to impose a $4.65 monthly fee on customers with rooftop solar. If approved, Utah would be only the second state in the country to penalize customers who have installed rooftop solar -- last year, the Arizona Corporation Commission approved a fee of $0.70 per kilowatt of solar installed (the average residential installation is 3-6 kW).

Hundreds of citizens rallied outside the Public Service Commission's offices in Salt Lake City, below, and later packed the hearing inside to protest the proposed solar fee. (See more photos of the rally here.)

Rally-against-solar-taxPhoto by Kim Sanders

Rocky Mountain Power's proposed fee is not based on any evidence that rooftop solar customers impose additional costs on the utility's system. Rather, the company is arguing that because customers with rooftop solar purchase less electricity, they aren't contributing sufficiently to the fixed costs of maintaining the distribution grid.

What the company's sparse analysis fails to take into account, however, are the many benefits that rooftop solar customers offer the grid. The absence of any accounting for these benefits is inexcusable because state law (recently amended by SB 208) requires the Public Service Commission to weigh the costs and benefits of net metering prior to imposing any fee.

Despite that law, Rocky Mountain Power submitted no evidence of the benefits of net metering in its initial application. In a last-ditch effort to cobble together a record that would support a decision in its favor, the company asserted that the price paid to small utility-scale renewable resources was an adequate proxy for the benefits of net-metered rooftop solar. (The reason that the price paid to these "qualifying facilities" under the federal Public Utility Regulatory Policies Act is not conclusive of the benefits of net metered distributed solar will be discussed in a future post.)

The Sierra Club and Utah Clean Energy, however, did present detailed evidence of the benefits of rooftop solar. First, net-metered rooftop solar customers reduce their electricity consumption during the time of day and of the year when it is most expensive for the utility to provide power, and thereby save the utility and all other ratepayers a lot of money. This locally generated power is even more valuable than remotely generated power, since almost no electricity is lost during transmission.

Moreover, the 14.2 megawatts of solar installed in Rocky Mountain Power's territory helps the utility meet its capacity reserve requirements, and reduces or defers the need for upgrades to the distribution system. The Sierra Club's expert, Dr. Dustin Mulvaney of Ecoshift Consulting, calculated that these benefits added up to more than $1.4 million annually -- and this isn't even taking into account the very real benefits of reduced emissions of carbon dioxide and other pollutants that result when rooftop solar generation displaces fossil fuel generation. Dr. Mulvaney estimated that a modest 6.8 percent growth rate of rooftop solar in the Rocky Mountain Power territory could avoid over 20 million metric tons of greenhouse gas emissions from 2015-2040.

The Sierra Club, along with Utah Clean Energy, The Alliance for Solar Choice, and Utah Citizens Advocating Renewable Energy, are asking the Commission to deny Rocky Mountain Power's effort to impose this unjustified fee on rooftop solar customers. Instead, the Commission should open up a separate proceeding to undertake a comprehensive evaluation of the costs and benefits of net metering, and to allow adequate time and opportunity for public input. Over ten thousand citizens and many local leaders,  including Salt Lake City Mayor Ralph Becker, have come out against the proposed fee, as has the city's major newspaper.

The hundreds of citizens who rallied in opposition to the fee on July 29th called it a "sun" tax. This show of public support for distributed solar -- not just from net-metered customers -- should remind the Public Service Commission of the broad social benefits that this resource provides.

- Casey Roberts, Staff Attorney, Sierra Club Environmental Law Program

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