Posts Tagged ‘value of solar’

El Paso Electric (EPE) – which is a for-profit company with a monopoly in the El Paso area – is seeking higher rates for the utility’s west Texas customers and launching another attack on solar customers. Despite increasing rates last year, the utility wants to collect an additional $42.5 million each year from its customers. Under the new proposal, EPE’s customers would face an overall 8.7 percent increase, amounting to $8.25 per month for the average residential customer. Solar customers would be hit even harder under the proposal, which an average bill increase of $14.09 per month.

Under EPE’s proposal, residential customers with solar would be subject to demand charges, which factors in the customers maximum demand for electricity at a single point in time. Demand charges are almost never used for residential customers because they are complex and can lead to significant fluctuations in bills.  Demand charges also make it very difficult for customers to take action to control their bills.  Solar customers would also be subject to time-of-use rates, which means electricity rates are different based on the time and day of the week.  While time-of-use rates can be a good tool, there is no justification for forcing them on customers with solar, but not other customers.

The 2017 utility tries to justify its discrimination against solar customers by using the false “cost-shift” argument. EPE plans to put the solar customers in a special class to “establish a fair rate structure that reflects the cost to serve each customer class.” To put it simply, EPE and other utilities are using the false argument that solar customers do not pay their fair share of grid-upkeep costs. This has been proven to be a false assumption by numerous studies conducted to calculate the value of solar. The improper allocation of costs to solar energy users will reduce the number of people willing to invest in solar and will leave current customers with no way to recover their costs.

EPE’s persistence in targeting solar customers has raised concerns. Several solar industry and advocacy groups, including The Alliance for Solar Choice (TASC) and Eco El Paso are going to fight the proposal at the Public Utility Commission of Texas (PUC) . Public Citizen is supporting these efforts by pushing the City of El Paso to make fighting the unfair solar fees and preventing the attack on solar a priority.

If you live in El Paso, take a minute to email the city to voice your opposition to the proposed unfair rates for solar customers.

“Demand charges found unreceptive audiences among regulators in 2016, and last year, Texas residents clearly rejected El Paso Electric’s same drastic and unprecedented rate design that punishes solar customers,” says TASC spokesperson Amy Heart. Senator José Rodríguez also issued a strong statement in opposition to the proposal:

I’m disappointed that El Paso Electric insists on discouraging people from installing solar on their homes. The electric company once again wants to single out solar customers by increasing their rates at least two times the amount of their non-solar neighbors. Solar customers will no longer be able to save on their electric bills, which was the reason they installed solar panels in the first place…I strongly believe these anti-solar proposals contradict the intent of Senate Bill 1910, which I passed in 2011 to authorize solar net metering in El Paso Electric’s service territory.

Fortunately for solar customers and non-solar customers alike, the evidence clearly shows that solar customers are contributing at least as much value as they get from the grid. A recent report from the Environment America Research & Policy Center evaluated 16 “value of solar” studies, and all but a couple that were conducted by utilities showed that the value of energy solar customers contribute to the system is higher than the retail rate they offset with net metering.

If you live in El Paso, help us and Eco El Paso fight back by sending an email to the El Paso City Council.

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A rate case is fundamentally about determining how much money an electric utility needs to collect from ratepayers to pay for expenses (and make some return on investment), how those expenses will be divided among the different customer classes (residential, commercial, industrial), and how customers in those different rate classes will be billed.  It’s probably obvious that these decisions can impact affordability and equity among customers.  Rate cases can also have significant environmental impacts though.

The Austin Energy rate case is an opportunity to make changes that can allow the utility to transition away from fossil fuels and towards greater reliance on clean energy solutions, including solar energy at homes and businesses, energy efficiency, energy storage and demand response (temporarily reducing usage when energy demand and prices spike).  What the utility spends money on, what programs are offered, and how rates are designed have profound impacts on climate change, air quality, water pollution, water use, land use – all of which impact society in a variety of ways, including public health and vulnerability to natural disasters.  So, it might sound boring at first, but if you care about the environment or social equity, you should care about how your electric utility is doing business.

What we’re advocating for:

  • 2009-08-21-fayette

    Fayette Power Project

    Budget to allow Austin Energy’s portion of the coal-fired Fayette Power Project to retire.  It is responsible for 80% of Austin Energy’s greenhouse gas emissions (and over 28% of Austin’s greenhouse gas emissions from all sectors).  It’s also a major source of other air pollution that causes and worsens respiratory diseases (sulfur dioxide, and nitrogen oxides – which contributes to ground level ozone formation) and cause neurological disorders mercury.  And it requires over 5 billion gallons of water to operate.  The latest adopted plan for Austin Energy calls for the retirement of the utility’s portion of Fayette by 2023, and Austin Energy staff say its remaining debt associated with the plant must be paid off before it can be retired.  The plan calls for that money to be collected in a dedicated fund through annual budgeting, but that isn’t happening, putting the retirement plan at risk.  Please use our action page to email City Council about budgeting to retire Fayette.

  • Maintain residential rates that encourage energy conservation and allow thrifty customers to keep their bills low.  Austin Energy has proposed to increase electric rates for those who use the least energy and reduce them for those who use the most.  For those trying to reduce their electric usage for environmental reasons or because their household budgets are strained, Austin Energy’s proposal will increase bills.  Austin Energy’s proposal will also make it more difficult to project from year to year how higher much summer rates will be from winter rates.  Both of these changes would reduce the incentive to conserve energy and invest in energy efficiency upgrade.  And these changes were proposed despite a study that Austin Energy commissioned that said that the existing rate structure is succeeding in encouraging conservation.  These proposed changes to how residential customers are billed would be a step backwards.
  • LegalZoom Austin Solar Installation - Meridian Solar

    LegalZoom Austin Solar Installation – Meridian Solar

    Adopt a policy to fairly compensate businesses for energy they produce from solar energy systems.  The City Council has adopted goals solar energy on homes and businesses, but Austin Energy’s current policy doesn’t include any way for most commercial customers to receive compensation for the energy they provide to the utility.  Incentives have temporarily filled that gap, but they are coming to an end.  The value of solar (VoS) rate is used to provide bill credits to residential customers, based on the calculated value of local distributed solar energy.  The same method should be used to compensate commercial customers.  Making this policy change will help grow solar adoption, while shifting away from incentives.

  • Ensure that enough money is collected to fully fund energy efficiency, solar energy and demand response programs.  Helping customers reduce their electric bills by making energy efficiency improvement or install solar energy systems doesn’t just benefit those customers who participate in those programs, it benefits all customers by allowing the utility to avoid purchasing expensive power that would drive all of our bills up.  The Energy Efficiency Services fee is used to collect money for this purpose.  With more people moving to Austin all the time, Austin Energy needs to ensure that budgets are set to match the need for local energy improvements.

Public Citizen and Sierra Club jointly participated in the Austin Energy rate case over the past several months, in an effort to push the utility to make environmentally sound decisions about both spending and billing customers.  That was just a warm-up for the real decision-making process though.  Because Austin Energy is owned by the city of Austin, the Austin City Council will make the final decisions about the rate case.  That’s where you come in.  City Council members, including Mayor Adler, need to hear from Austin Energy customers.  There will be a public hearing on Thursday, August 25th at 4:00 p.m. at City Hall.  Meet at 3:00 p.m. for a rally to support fair rates that meet Austin’s environmental goals.

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