The results are in! Expert analysis on rooftop solar costs and benefits

The results are in! Expert analysis on rooftop solar costs and benefits
13 June 2017

Rooftop solar is flourishing in Utah, empowering families with an opportunity to generate their own electricity cleanly and efficiently. In response to the growing solar market, Rocky Mountain Power (RMP) has proposed new net-metering fees and bill increases specifically for solar customers. Collectively, RMP’s proposal threatens to stall further rooftop solar development in Utah.

The company’s central rationale for the new charges is the alleged shifting of costs from net metered residential customers to other residential customers who do not have solar.

Since day one, this claim didn’t add up. So Utah Clean Energy’s experts began digging into the Utility’s data to figure out just how RMP came to this conclusion.  In early June, Utah Clean Energy submitted our findings to the Utah Public Service Commission. Our full expert testimony is roughly 100 pages long. See below for a few highlights.

Our Findings

The Cost of Service study RMP used to determine their proposed rates is fundamentally flawed

There is a fundamental flaw in the analysis Rocky Mountain Power used to claim solar customers do not pay their fair share of costs to maintain the electricity grid. Rocky Mountain Power’s cost of service analysis (literally, a look at what costs are incurred in order to provide electricity to all customers) incorrectly includes “bill credits” as a cost. A “bill credit” is the monetary value ascribed to any electricity generation net metering customers export to the grid or use in their own homes. Bill credits do not increase Rocky Mountain Power’s costs to provide electricity; rather, they reduce the utility’s revenues and, potentially, their profits. Therefore, contrary to the Company’s assertions, net metering customers do not increase costs. When you correctly look at the analysis (using RMPs data), rooftop solar customers – and all that solar energy they generate - actually reduce costs for residential customers by $1.3 million a year.

The benefits from rooftop solar are significantly understated

Rocky Mountain Power's analysis is based on a one-year timeframe. Therefore it fails to account for the ability of rooftop solar to avoid long term system investments to meet peak demand. The $ 1.3 million in benefit noted above is based on just one year, but the benefits are considerably more substantial over a 20 year period. In fact, PacifiCorp’s 20 year resource plan shows the potential for a $400 million dollar benefit from rooftop solar!

Rocky Mountain Power’s proposed rate structure would mean low and moderate energy users will pay significantly more each month on their electricity bills than they would without solar.

  1. Rooftop solar customers would be charged 150% higher monthly fixed charge
  2. The proposal makes the payback period for many solar customers go from about 13 years to 30 years

What Does Utah Clean Energy Want?

Utah Clean Energy supports evidence-based changes to rates for solar customers in order to balance fairness and the benefits that solar brings to all ratepayers. It’s logical that Rocky Mountain Power seeks to find ways to be profitable. However, the proposed rate increases are drastic and threaten to stall rooftop solar and all the benefits it brings to Utah. There’s a better way forward.

Our full testimony is available for review here.

Next up in the rooftop solar case is rebuttal testimony.  For a deeper dive into the proposed rate changes, and a timeline of the full docket, click here.

 

 


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