Solar Companies Denounce Utah Utility’s NEM Proposal


Salt Lake City-based utility Rocky Mountain Power has proposed net energy metering (NEM) rate changes for new rooftop solar customers, and a group of local and national solar companies is calling on Utah regulators to reject the proposal, claiming that it could result in problems like those recently seen in Nevada.

Rocky Mountain Power has requested to replace the current NEM rate structure with a three-part one that would include a $15.00 fixed charge, a $9.02/kW peak-demand charge and a 3.81 cents/kWh energy-use change. The utility says the new pricing would affect only new rooftop solar customers applying for NEM connection after Dec. 9, 2016, and current customers would stay under the current rules. (Notably, the NEM changes in Nevada were originally retroactive.)

According to Rocky Mountain Power, the utility conducted a study that found a typical Utah rooftop solar customer underpays their actual cost of service by about $400 per year. This cost shift currently amounts to $6.5 million each year to other residential customers and is forecast to grow to as much as $78 million annually if the rate is not addressed, the utility says.

“Rocky Mountain Power supports renewable resources as long as an appropriate rate is in place that allows customers to use private generation without adversely affecting other residential customers,” says Gary Hoogeveen, Rocky Mountain Power’s senior vice president and chief commercial office, in a press release. “Customers partially relying on renewable energy through the net-metering program must still pay their fair share of the costs to serve them.”

Rocky Mountain Power says that although it can purchase the same amount of electricity from large solar farms for about 3 cents/kWh to 4 cents/kWh, residential NEM customers currently receive utility bill savings worth about 10.5 cents/kWh for the solar energy they produce. The proposed rate changes would reduce those residential NEM savings to about 7.1 cents/kWh.

Rocky Mountain Power says it is also proposing a new $60 application fee for most NEM customers to cover the actual costs of processing the applications. In 2015, the administrative costs were $560,000, but the fees only recovered $17,000. The proposed fees would address this shortfall, the utility says.

The company has filed its proposal and the results of its study, but ultimately, the decision about potential NEM changes will be up to the Utah Public Service Commission.

As such, more than 20 local and national solar companies, including Sunrun, SolarCity and Vivint Solar, have issued a statement urging Utah regulators to “establish fair and appropriate rates for solar customers.”

“We encourage the Public Service Commission to foster a collaborative, transparent process and to recognize all the benefits rooftop solar generation provides to the power system,” the companies say. “Utah is ranked the most business-friendly state in the country, and to maintain that reputation, we must continue to attract and support the explosive technological, investment, and job growth of the solar energy industry.”

The solar companies also warn that similar NEM changes caused troubles for the Nevada solar market.

“Recently in Nevada, energy regulators passed new rules supported by their utility NV Energy – also owned by Rocky Mountain Power’s parent company, Berkshire Hathaway – that dramatically increased fees on solar homeowners,” the companies say. “Those new rates caused rooftop solar applications to fall by ~99 percent and forced over a dozen local and national solar companies to either go out of business, cut jobs or leave the state.