The Public Service Commission Declines Appeal in the Rooftop Solar Case

It has been over a year, and it has taken hundreds of pages of written testimony, days of hearings, and countless meetings to answer one critical question to the future of rooftop solar energy in Utah: how much is exported solar energy worth, exactly? In October 2020, the Utah Public Service Commission approved what is now called the Export Credit Rate (ECR) for rooftop solar. Several elements of this ECR were particularly damaging to the future of rooftop solar in our state. So, Utah Clean Energy filed an appeal to Commission’s order. Unfortunately, the Commission declined to revise its order consistent with our appeal.

The New Export Credit Rate

The PSC approved an Export Credit Rate of approximately 6 cents per kilowatt-hour. While this doesn’t represent the worst-case scenario of 1.5 cents proposed by Rocky Mountain Power, the new rate only accounts for two of the benefits that exported solar energy provides: the value of energy purchases that can be avoided thanks to rooftop solar and the value that comes from using aggregated rooftop solar installations across the state to help avoid building new power plants in the future. Adding insult to injury, the new rate is subject to change every year.

Utah Clean Energy’s team appealed this decision on November 30, 2020. The appeal addressed two of our biggest concerns with the PSC’s ruling: first, the PSC abdicated their authority to consider a broader set of benefits such as health, economic, and climate considerations when setting the ECR; second, the PSC’s decision included an annual update to the ECR. If left in place, this annual update leaves solar customers with no way to definitively determine a return on investment. In an order issued on December 23, 2020, the Commission reaffirmed its decision to exclude health, economic, and climate considerations when setting the ECR, and to retain the annual update to the rate.

Who is Impacted?

This new Export Credit Rate (aka Schedule 137) applies to any solar customer who applied for interconnection after October 30, 2020. If you already have solar, you are either grandfathered into the old net metering program (aka Schedule 135), or if you installed in the past two years, will be grandfathered into the rate of 9.2 cents per kWh (aka Schedule 136). See the graph below for more details.

Getting Into the Details of Utah Clean Energy’s Appeal

Utah Clean Energy’s appeal to the PSC’s decision urged the Commission to review statutory guidance regarding the Commission’s authority and reconsider its ability to consider factors beyond utility cost of service when setting rates. We argued that factors like the social, health, and economic well-being of Utah are relevant considerations when determining utility rates, and that the Commission is the only state agency that has the ability to ensure electricity rates are just and reasonable and in the long-term best interest of Utahns. Given this responsibility, we also asked the Commission to reconsider their decision to update the Export Credit Rate each year. Annual updates make it challenging to evaluate the long-term savings from solar, and prevent potential solar customers from understanding whether solar is the right decision for them. Finally, we asked the Commission to reconsider introducing the new, reduced Export Credit Rate gradually over time, as Nevada and Arizona have done, to avoid sudden negative impacts to solar installers in Utah. The Commission denied all three requests for reconsideration, affirming its original decision.

Vote Solar also filed a separate appeal in partnership with Vivint Solar and the Utah Solar Energy Association. Vote Solar’s appeal requested reconsideration of certain components of the actual value that the Commission approved for exported energy, and that the Commission make a final determination as to whether or not the costs of the former net metering program exceed the benefits (or vice versa). While the Commission also denied many elements of this appeal, the Commission did grant a rehearing on some of the issues related to how the ECR will be calculated. This rehearing will take place in early 2021. The results of this rehearing are unlikely to substantially alter the ECR.

Last, Rocky Mountain Power filed an appeal requesting the Commission to net energy generation and exports on an instantaneous basis, rather than a monthly basis. On this issue, the Commission agreed with the utility.  

What’s Next

Utah Clean Energy will continue following this proceeding as it plays out this year, but the ECR in schedule 137 is largely established at this point. The experts at Utah Clean Energy are here to help you understand how the new Net Billing Service works and what the new rates might mean for your home or business. If you have questions, contact our Renewable Energy Program Manager Kate Bowman (kate@utahcleanenergy).

Solar Rates Comparison 

Schedule 135: Net Metering

Solar customers who filed an interconnection agreement before November 15, 2017 are grandfathered into the Net Metering Program until January 1, 2036. Net Metering customers receive a kilowatt-hour credit for each kilowatt-hour of energy exported to the grid. Credits roll over from month to month until March, when they expire and the value of the expired kilowatt-hours is credited to Utah’s low-income billpayer assistance program, the Home Energy Lifeline Program (HELP). Net metering is no longer available to new customers.

Schedule 136: The Transition Program 

Solar customers who filed an interconnection agreement between November 15, 2017 and October 30, 2020 are grandfathered into the Transition Program until January 1, 2033. The Transition Program provides a credit for each kilowatt-hour exported to the grid that equals 90 – 92.5% of a customers’ average retail rate for electricity. Exported energy is netted against energy purchased from the utility on a 15-minute basis. Table 1 provides specific export credit values for each type of utility customer. Net metering is no longer available to new customers.

Table 1: Export Credit Values for Transition Program Customers