A Wisconsin utility is seeking regulatory approval for a revised rate structure that adds new fees for customers who generate some of their own power with wind, solar, and other renewable energy systems, and cuts the amount of money they are paid for excess electricity through net-metering.
We Energies’ proposal would hike the fixed service charge (what it calls a “facilities charge”) for all residential electric customers from $9 to $16 per month.
The rate charged for electricity would drop from 13.94 cents per kWh to 13.49 cents per kWh. For a customer using 708 kWh per month, roughly what the U.S. Energy Information Agency says is typical for the state, the charge for electricity would drop from $98.70 to $95.51 (not including the mandatory facilities charge).
ThinkProgress reports the utility wants to impose a fee of $3.80 per kilowatt of capacity per month for customers who own photovoltaic (PV) arrays and wind generators. For a customer with a system rated at 5 kW, this new “standby charge” would amount to $228 per year.
In addition, We wants to reduce the amount it pays for excess generation from about 14 cents per kilowatt hour (kWh) to between 3 cents and 5 cents per kWh.
Milwaukee-headquartered We Energies, a subsidiary of Wisconsin Energy Corporation, has customers in parts of Wisconsin and Michigan’s Upper Peninsula, with a total of about 1.1 million electricity customers. It gets most of the electricity it distributes from coal-fired plants (about 53%), another 26% from natural gas and 1.5% from renewable sources.
We spokeswoman Cathy Schulze said the number of customers with the ability to generate some of their own power, with wind, solar and other forms of distributed generation, is less than 1,000. But, she said, as the renewable energy industry grows, those numbers will increase.
High net-metering rates helped solar and other forms of renewable energy get a foothold early on, she said, but they are no longer fair or necessary. The new rate structure would “even things out,” Schulze added, and allow We to pay a “wholesale price for a wholesale product.”
No third-party ownership
The rate proposal would prohibit homeowners from leasing or renting solar and other renewables. That’s consistent with current state law, Schulze says, which does not permit third-party ownership.
“State law currently defines third-party generators as ‘public utilities’ which would be subject to public utility laws, rules and [Public Service Commission] orders,” she said in an email. “Allowing third-party generators to sell power to individual customers would expand the problem of shifting the fixed costs of maintaining the system to other customers.”
Solar leasing is big business in some states, particularly California. It gives homeowners a chance to get into renewables with no big upfront charges, and the rate they pay for electricity is typically lower than what they had been paying.
Solar installers cry foul
We Energies says the new rates would be fair to all customers, but solar advocates in Wisconsin are anything but happy.
“It would not only end solar but remove the economic viability for any renewable energy in Wisconsin,” Matt Neumann, owner of the largest solar installation company in the state, told ThinkProgress.
The sharp increase in fixed charges, Neumann added, would punish everyone, including those who have taken steps to reduce their consumption of electricity.
It might not be the end of solar in the state, but customers with their own PV systems clearly wouldn’t be happy. For someone with a 5 kW solar system, for example, monthly charges would go up by $26, and any power sold to the grid would be worth between 21% and 36% of what it is now.
We Energies customers currently pay the second highest electricity rates in the state, The Milwaukee-Wisconsin Journal Sentinel reported. Since 2005, residential bills have gone up by 51%, the newspaper said, more than twice the rate of inflation.
The rate request comes as We’s parent company seeks regulator approval for a $9.1 billion purchase of Integrys Energy Group, a Chicago-based natural gas and electric utility, The Journal Sentinel said.
The state’s Public Service Commission will rule on the requests after public hearings over the next several months. Schulze said no decision is likely until December.