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Rooftop solar controversy unwinds before utility regulators

FILE: Workers install solar panels on a home in Lehi on Tuesday, May 17, 2016.
FILE: Workers install solar panels on a home in Lehi on Tuesday, May 17, 2016.
Deseret News

SALT LAKE CITY — Utah may be experiencing wintry weather, but the rooftop solar controversy is becoming glaringly hot — with a flurry of activity happening on the regulatory front that is sure to put the state in the national spotlight.

The Public Service Commission has been wading through a bevy of public comments generated by Rocky Mountain Power's November request to charge new fees to rooftop solar customers who buy their systems after Dec. 9.

The commission issued a scheduling order in the fee and rate structure changes, setting aside a full week in August to consider the matter. In addition, commissioners could choose to act on the Dec. 9 request, signaling the price change by granting approval, establishing a new date or doing nothing at all.

It is a complex matter because if the commission doesn't approve any of Rocky Mountain Power's requested fees, the Dec. 9 date becomes meaningless. At the same time, solar companies and solar advocates say the date signals uncertainty for would-be solar system purchasers and has driven down interest by 40 percent, according to Vivint CEO David Bywater.

"It is an official notice that rates may change, and it has injected ambiguity," Bywater said. "The result is a chilling effect that is happening today."

Rocky Mountain Power spokesman Paul Murphy said ratepayers have a right to know that potential pricing changes are on the table.

"We think people should know that the rate structure they have right now is going to change," Murphy said. "The Public Service Commission has already stated there is an unfair subsidy that is being passed on to nonsolar customers by solar customers."

The state Division of Public Utilities argued in a filing to the commission that it is premature to signal a rate change that might not even happen.

"No changes have yet to be made to net metering provisions. It is possible none will be made," the filing states. "While the creation of a new tariff may have the function of indicating to new customers that their rates are subject to change, it also sends a message to existing customers that they are different and not likely to be subject to changes to the net metering program."

The division questioned whether a dual rate structure for otherwise identical sets of customers is legal and stressed that the proposed tariff is likely to "signficantly" disrupt an existing industry.

Bywater said the solar industry has created 4,000 jobs in Utah over the past five years and is among the fastest growing in the state.

He said the uncertainty around new fees for solar customers after Dec. 9 will kill those jobs and drive a thriving industry to its knees.

"This has already done huge damage to the solar industry," Bywater said. "To allow a regulated monopoly to kill it overnight is a travesty."

Rocky Mountain Power said it conducted a study that found a typical rooftop solar customer underpays the actual cost of service by about $400 a year. The effect, it said, is to shift costs of $6.5 million a year to other residential customers. Over the next 20 years, the cost shift to customers is estimated at $667 million if net metering fee changes aren't implemented.

The utility company is asking the commission to approve a three-part rate for residential net metered customers, a method similar to the rate plan used now by commercial customers with self-generation. The residential rate is separated into charges of $15 for a fixed customer charge, $9.02 per kilowatt for peak period demand, and 3.81 cents per kilowatt-hour for the amount of energy used.

Bywater said it is the most onerous proposal ever put forth by a utility company.

"We think it is crazy," he said.

The Utah Solar Energy Association commissioned Dan Jones & Associates to conduct a poll of 834 registered voters from Nov. 21-29 to tap attitudes toward rooftop solar systems.

The results show that 56 percent of those surveyed would consider putting rooftop solar on their homes if it resulted in a 10 percent decrease in electricity costs. If electricity costs increased by 10 percent, only 17 percent of those surveyed would be likely or very likely to install a system.

Poll results also indicate that 76 percent of people are opposed to increased costs for solar customers, and 82 percent believe customers have a right to reduce their electricity usage without paying fees compared with other customers. The poll has a margin of error of plus or minus 3.39.

Murphy said the survey results were generated by questions designed to elicit a specific, skewed response.

He added that the answers would create a different picture if people were asked if they thought it's fair to pay for their neighbor's rooftop solar system, or if it's fair to pay more for electricity to provide more profits for private solar companies.

Utah lawmakers will also consider a proposal in the next legislative session to phase out the state tax credit for rooftop solar in five years because of its impact on state education funds.