No Solar Fee for Xcel Customers
Last week, Adam talked about Xcel Energy’s plans for a new monthly feeon Colorado solar panel owners’ electric bills. The public outcry hasbeen significant, and yesterday, Xcel announced they were dropping theproposed fee. After the news broke, Adam updated his post; and nowhere’s a closer look at this interesting conflict. Just because Xcel isthe first utility to propose such a fee doesn’t mean it will be thelast, and the issues at hand are at the heart of making solar a viablelong-term prospect for Americans.
To those home and business owners who use solar to power theirbuildings, the new distribution fee seemed unfair, as though they wouldbe “punished” for their commitment to clean energy and energyindependence. But energy independence from your local utility doesn’tlook good on the books, and as Adam pointed out, there are somecompelling arguments in favor of such a fee. There’s a great deal ofinfrastructure to be paid for. Just because you have a solarinstallation doesn’t mean you should be exempt from sharing in thatcost. As the Denver Business Journal reports,
“We made this proposal in good faith as a reasonableapproach to provide for a fair allocation of costs and benefits betweencustomers with solar panels and customers without solar panels,” saidKaren Hyde, VP of rates and regulatory affairs for Xcel’s Coloradodivision, known as Public Service Co. of Colorado. “However, we appreciate that the proposed rate mechanism has caused significant customer confusion.”
“Significantcustomer confusion” indeed. The fee couldn’t help but seem a slap onthe wrist to solar owners who, after all, only installed solar becauseXcel and their state and federal governments encouraged them to do so.But since very few people have standalone solar installations with hugebattery banks, most solar installations are still connected–quiteadvantageously–to the grid. Beth Hart, president of the Colorado SolarEnergy Industries Association (CoSEIA), agrees the utility shouldreceive payment from solar owners but that the approach should differfrom this hotly contested fee.
“Wewant the utility as backup power. That makes the most sense as an Xcelrate payer, as a Coloradoan, and as a nation. We want our utilities tostay viable. The question is how can we do that,” Hart said. “…Let’stalk about some flat fees, not convoluted calculations that don’t work.”
This is not the end of the debate by any means. Utilities benefitfrom distributed generation resources (like home solar) in a few ways:they lift a predictable burden from peak load supply, meaning theutility’s generational capabilities can stretch further; they savedistribution and transmission costs; and in the case of many utilities,and Xcel is one, the utility retains the rights to all renewable energycertificates generated by the resource. The ways in which the utilitiesbenefit from solar need to be held in the balance when a faircontribution to utility maintenance/privileges from solar owners isdiscussed.
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