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Vermont Utility Seeks a New Solar Fee

The Washington Electric Co-op says the new fees for photovoltaic systems would cover fixed costs that otherwise are passed to other customers

Posted on Jul 8 2014 by Scott Gibson

UPDATED July 11, 2014

An electric co-op in Vermont has joined the ranks of utilities around the country seeking regulatory approval to add fees for their customers who have rooftop photovoltaic(PV) Generation of electricity directly from sunlight. A photovoltaic cell has no moving parts; electrons are energized by sunlight and result in current flow. (PVPhotovoltaics. Generation of electricity directly from sunlight. A photovoltaic (PV) cell has no moving parts; electrons are energized by sunlight and result in current flow.) installations.

Washington Electric Co-op wants to make changes to its net-metering program that would include a grid service fee of 4.63 cents per kilowatt hour for new net-metered customers. The co-op which serves about 10,500 residential and business customers in a three-county region in north-central Vermont.

(On July 11, the not-for-profit co-op said its net-metering plan had been approved by the Vermont Public Service Board, clearing the way for the co-op to begin accepting new net-metering applications.)

New solar customers also would have to pay the $11.79 monthly service charge that all customers now pay, regardless of how much excess electricity they produce. Currently, customers with PV installations can offset the $11.79 by selling power to the grid.

Under the new plan, a customer producing 300 kWh of electricity per month would pay a total of $13.89 per month, co-op general manager Patty Richards said, $2.10 more than a non-solar customer. The new net-metering rules wouldn't apply to existing solar customers.

Customers with PV arrays rated at 15 kW or less would still earn 20 cents a kWh for excess power. Those with systems larger than that get 19 cents per kWh.

She said the new fees would help the co-op cover the fixed costs of maintaining its infrastructure. A number of utilities around the country have requested fees for solar customers, arguing they contribute less for grid maintenance than non-solar customers because they buy less electricity and can zero out their bills under net-metering rules.

The fee plan is supported by a state office

Washington Electric must win approval for its proposal from the Vermont Public Service Board, but it already has the support of Darren Springer, the deputy commissioner of the Vermont Department of Public Service, according to a report posted at VtDigger.org.

Renewable energy advocates told VtDigger.org the proposed net-metering changes would make it harder for residents to finance solar systems in the co-op's service area. "If this tariff is implemented, going solar is going to be less appealing to WEC customers because the cost will functionally be higher," Ben Walsh of the Vermont Public Interests Research Group said.

Renewable Energy Vermont, an industry trade group, opposes the co-op's plan, the report said.

The co-op has gone 100% renewable

Washington Electric's situation is somewhat different than other utilities, Richards said. For one, all of the power it distributes already comes from renewable sources, including hydro and wind projects and a landfill gas-to-energy project in Coventry, Vermont.

Richards said the co-op encourages net-metering among its customers. And it has a tiered rate system that encourages conservation by setting a price of 9.4 cents per kWh when customers use 200 kWh or less of electricity per month, and 21 cents per kWh for those who use more than that.

Another factor is that peak demand for electricity in Vermont is during the winter, when there's less solar-generated power available. In states where peak demand occurs in mid-summer, distributed solar power is more valuable because it can help utilities meet demand without bringing costly generating facilities online.

Still, Richards said, the co-op has certain fixed costs and that its proposal is an effort to be fair to all co-op customers.

Separately, the co-op is seeking a 3.78% rate increase. Regulators haven't ruled on that.


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Image Credits:

  1. Jack Hanoka / National Renewable Energy Laboratory
1.
Tue, 07/08/2014 - 10:38

Why do they insist on complicating things
by But Why?

Helpful? 1

The solution is to treat solar customers the same as they do any other wholesale supplier of electric to them. Stop paying retail prices to solar customers for a wholesale product and you eliminate the issue entirely. Utilities don't charge their other wholesale suppliers for grid access so why would they have to charge individual wholesale suppliers that have solar cells? Any electirc solar customers use is billed at full retail and carries with it any access fees any other customer would pay. Any electic a solar custmer sells back to the utility is sold at wholesale prices just like any other electric a utility system buys from any other supplier. Its fair to everyone and eliminates SOME of the economic distortion that drives solar generation at this time.

There is no justification for me paying my neighbor (via my utility company) a retail price for a wholesale product.


2.
Mon, 07/28/2014 - 17:15

Edited Mon, 07/28/2014 - 17:25.

RE:But Why
by Dennis Heidner

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Actually - wholesale generators are generally charged for interconnect fees. They are generally charged for transmission fees, and they certainly may be charged for congestion fees. Treating residential solar PV installations only as large wholesale producers is very unfair to the small producers.

The small producers also are trying to recover their costs. If the grid system falls under the requirements of an "open access tariff" - then there indeed may be a federal requirement to allow interconnection and a cost recovery for the small producer.

This VT case is different. It is a co-op. Not for profit. That means each of the customers owns and is responsible for all the costs and benefits of THEIR electrical grid. Infrastructure costs have been traditionally volumeteric - more you use, the larger share you pay.

Since it is a non-profit, I would suggest individuals that insist that the policy might be unfair, check with the co-op and find out how they determined the costs. If they are basing the fee's based on the cost to move a kWh (either direction) on the local distribution system - that would seem to be perfectly fair. They are not likely to be trying to recoup lost profits. The proposed fee also sounds like they have allowed for a reduction in the portion of costs related to generation. But even that may need to be recouped if the co-op owns their own hydro facility.

Co-ops are very different cases than the investor owned utilities. But on the public investor owned grids - remember that the distribution system in the neighborhoods - might be wires and transformers provided by the utility - but the right of way is often taken, leased or granted to the utility by the property owners. If the land is owned by the city, county, state or federal government - those entities certainly can add conditions which might promote the use of renewables by small producers.

In the end, most of the discussion comes down to a conversation on public policy. Vermont has had active discussions on renewables, they've made those policy decisions. I am sure the co-op has made a similar and transparent decision on behalf of their members/owners.


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