Rooftop Solar Settlement Details

Rooftop Solar Settlement Details
28 August 2017

If you have solar, or are you thinking of installing solar, skip straight to the details.

For months now, Utah Clean Energy has been immersed in negotiations with Rocky Mountain Power and other interveners on proposed rate changes for rooftop solar customers. Last November, Rocky Mountain Power filed a proposal that was unacceptable. It would have made solar unaffordable for most Utah households and eliminated the thousands of jobs that this industry brings to our state. We entered settlement negotiations in hopes of avoiding that outcome.

After a challenging and thorough negotiation process, Utah Clean Energy and other official interveners signed a settlement agreement with Rocky Mountain Power. The agreement will serve as an interim solution to the standoff over utility rates for rooftop solar customers.  For better or for worse, more work to ensure Utah’s long-term solar future is still ahead of us.

The settlement is the result of a collaborative multi-stakeholder effort initiated by Governor Gary Herbert and the Office of Energy Development (OED) Director Dr. Laura Nelson. Without their commitment, and the hard work of fellow interveners, a negotiated solution would not have been possible. Together we have brokered a compromise between Rocky Mountain Power, the solar industry and solar advocates. While not perfect, the settlement agreement will sustain rooftop solar in Utah in the near term, providing a stable market for residential and commercial solar customers while we undergo an Export Credit Proceeding.  The full settlement proposal can be found here: https://psc.utah.gov/2016/06/20/docket-no-14-035-114-2/

What is the Export Credit Proceeding?

The settlement includes an agreement to undertake a new proceeding to determine the value of solar power when it is exported to the grid. That means more analysis, evaluation, negotiation and well…work! But, it is an opportunity to get it right for solar. Utah Clean Energy, the utility, utility regulators and fellow advocates will once again dig into the value of rooftop solar to determine a long-term solution and rate design for solar customers. The proceeding could last up to three years. 

In the meantime, here is a breakdown of the settlement agreement. The settlement agreement has been submitted to the Utah Public Service Commission and is now awaiting their approval. It cannot be considered final until it is approved by the Commission.

 

Agreement Details

Note: This is a complex agreement that we have distilled down, and the details below should be read carefully. We also note that this agreement only applies to Rocky Mountain Power customers and is pending approval by the Utah Public Service Commission.

What We Avoided

In their original proposal, Rocky Mountain Power requested a $15 fixed monthly charge, a $9.02 Per-Kilowatt Peak Demand Charge (which would cost approximately $30 - $80 per month depending upon your peak electricity demand), and a reduced energy rate for solar customers.  We were able to avoid all of these added fees! 

What does the settlement mean for you?

I Already Have Solar On My Home
If you currently have solar installed on your home you will be grandfathered into the current net metering program and rate structure until January 1, 2036 (YES!). Grandfathered customers will not be subject to additional solar-specific fees or charges during this time. This was a big win and a vital provision Utah Clean Energy and industry partners pushed to ensure!

I Am Ready to Go Solar Soon
Those who submit a completed net metering application before November 15, 2017 will also be grandfathered into the current net metering program until January 1, 2036. Another big win!

If You File a Net Metering Application After the Deadline Above:  Welcome to the “Transition Program”
If you file a net metering application after November 15, 2017, you will be part of the “Transition Program.”  Transition Program customers will no longer receive a kilowatt-hour per kilowatt-hour credit for the extra solar energy you send to the grid. Rather, you will receive a fixed credit for your extra solar energy.  What that means is that the solar power you generate on-site and use in real time will be directly powering your home and reducing your energy bills. However, if you’re generating more energy than you are able to use in any given 15-minute increment, you are sending that solar energy to the grid, and you will be compensated for that electricity based on the new “export credit rates” outlined in Table 1 below.

Customers in the Transition Program will be guaranteed these rates and compensation, until 2033!
After January 1, 2033 Transition Program customers will be switched to whatever rate structure is put into place following the Export Credit Proceeding (that’s the docket we will be working on for up to the next three years).

Table 1: Export Credit Values for Transition Program Customers – Guaranteed until 2033*

Schedule
Export Credit for solar (¢/kWh)
Average Electricity Price from RMP (¢/kWh)
Residential (1, 2, 3)
9.2 cents
10.2 cents
Medium Commercial (6)
3.4 cents
3.7 cents
Medium Commercial  Energy Time of Day (6A)
6.6 cents
7.1 cents
Medium Commercial Demand Time of Day (6B)
3.4 cents
3.7 cents
Large Commercial (8)
3.5 cents
3.8 cents
Metered Outdoor Nighttime Lighting (15)
4.9 cents
5.3 cents
Traffic and Other Signal Systems (15)
7.8 cents
8.4 cents
Irrigation (10)
5.6 cents
6.1 cents
Small Commercial (23)
8.2 cents
8.9 cents

*The Transition Export Credit Rate is set at 90% of the average price for electricity for residential customers and 92.5% of the average price for electricity for commercial customer classes.  As part of the settlement, parties agreed to support an extension of the Utah Solar Tax Incentive at 2018 levels ($1,600) through 2021. If the incentive isn’t extended, the export credit rate will rise to 92.5% of the average price for electricity for residential customers.

How Long Do I Have to Get into the Transition Program? Are There Other Limitations?

It depends on how long it takes us to finish the Export Credit Proceeding.  The Transition Program will be available until the Public Service Commission issues a final ruling in a new Export Credit Proceeding, which is expected to last up to three years.  However, there is a cap on the amount of new solar projects that can be included in the Transition Program (see Table 2). If you install solar after the ruling on the export credit proceeding is issued then you will be subject to whatever rates come out of that proceeding. 

Cap on Solar in the Transition Program

There is a cap on the amount of solar allowed in the Transition Program. Table 2 shows the amount of solar allowed under the cap and an estimate of the number of installations that will be included in the Transition Program.  If you install solar after the Transition Program has met the caps below, you will temporarily be allowed into the Transition Program but your rates will not be guaranteed until 2033. You will be subject to new rates once the Export Credit Proceeding is complete.

Table 2 – Estimated Number of Solar Installations Available During Transition Program

Customer Class

Cap (MW)

 

Estimated # of Installs

Residential, Outdoor lighting & Small Commercial

(Schedules 1, 2, 3, 15, 23)

170

Residential

25,862 homes

Outdoor Lighting & Small Commercial

707 businesses

All other Commercial

(Schedules 6, 6A, 6B, 8, 10)

70

 

927 businesses

What’s Next for Rooftop Solar?

Rocky Mountain Power will open the Export Credit Proceeding as a new docket to determine the export credit rate for future solar customers (those who install solar after the Transition Program is closed).  This case could take up to 3 years. The value that future solar customers receive for their energy will depend on the outcome of this docket, so it’s critical that we all continue to make the case for a fair valuation of solar energy.

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