The owner of a celebrated Passivhaus in Wisconsin will be making a lot less money for the excess electricity generated by his photovoltaic panels thanks to an about-face in policy by the local electric cooperative.
GBA readers will be familiar with Passive House in the Woods, a 1,940-sq. ft. house completed in Hudson, Wisconsin, in 2010 and documented not only in a blog written by its designer Tim Eian but also in several news stories by GBA’s Richard Defendorf.
Gary Konkol, who owns the house, has been notified by the St. Croix Electric Cooperative that he will no longer receive the retail rate for power generated by his 4.52 kW PV system. Instead, the cooperative is prepared to pay the “avoided cost” of the electricity, which is based on the cost to the utility of buying or generating the power.
The policy change, which was announced in May, will have the effect of lowering payments to Konkol and other cooperative customers with PV systems from 10 or 11 cents per kWh to between 2.75 and 3.75 cents per kWh, according to an article that originally appeared in Midwest Energy News. (This change only affects the price paid for any PV power exceeding the owner’s usage.)
The new policy is an about-face
“Unfortunately, the terms of service and rate issue has become a few members’ personal interests versus all the other cooperative members’ interests,” Cooperative president and CEO Mark Pendergast told Energy News.
Konkol’s house has been generating enough electricity during the summer to cover the cost of power during the winter, so he’s been paying only the $25 monthly service charge, due to rise to $28 in January.
But even the new fee won’t be enough to cover the actual cost of providing service, which is an average of $40, Pendergast said. “If a member is not paying for any energy purchases, the other cooperative members must make up the revenue shortfall,” he said.
The change of heart is a far cry from the cooperative’s original position. It waived the standard $2,000 hook-up fee when the house was constructed, and now Konkol is crying foul.
He told Energy News that the original arrangement with the Cooperative was “verbal and implied” and that the cooperative’s board of directors should grandfather the arrangement even if no formal contract was signed.
“It isn’t fair,” he said. “I would argue it’s the other way around, that we’re subsidizing the cooperative.”
Similar conflicts elsewhere
The St. Croix Electric Cooperative isn’t the only one grousing about the impact of residential PV systems on the bottom line.
In August, The New York Times reported on utility claims that a sharp increase in PV installations is shifting more costs to customers who don’t have any solar panels and ultimately will undermine their ability to maintain their distribution systems. California saw solar installations increase by 160% a year between 2010 and 2012, forcing the state to find almost $1.4 billion in revenue it was losing due to net metering.
“If the costs to maintain the grid are not being borne by some customers, then other customers have to bear a bigger and bigger portion,” Steve Malnight, a vice president at Pacific Gas and Electric, told the newspaper. “As those costs get shifted, that leads to higher and higher rates for customers who don’t take advantage of solar.”
The paper said Arizona and North Carolina electric utilities also want changes in rules on how much residential PV owners should be paid.
In Arizona, the state’s largest electric utility, the Arizona Public Service Company, wants to reduce net-metering payments to less than half the retail rate, or add fees to pay for grid maintenance, according to an article posted at cleanenergyauthority.com.
The Arizona Corporations Commission staff recommended this week that commissioners reject the changes and said the net-metering policy should remain in effect until at least 2016 when the utility’s next rate case comes up.
In Wisconsin, the St. Croix Electric Cooperative was not required to seek approval from the state’s Public Service Commission for its change in policy. “The commission does not have regulatory authority over co-ops,” a PSC spokesman said.