Washington Electric proposes fees to offset net metering costs

-A A +A

Washington Electric proposes fees to offset net metering costs

Wed, 07/02/2014 - 11:13am -- tim

by John Herrick vtdigger.org The Washington Electric Co-op is proposing changes to a program that allows homeowners who generate renewable energy to sell excess power back to the electrical grid. The East Montpelier-based electric utility is asking state regulators for permission to tweak its net metering program. Patty Richards, the co-op’s general manager, says Washington Electric wants to ensure the program is “fair to all of our membership.” WEC is proposing adding a fixed customer charge and a new grid service fee based on the amount of power the net metering member generates. The co-op’s proposed charges would cover fixed costs that some net metering customers pass on to other customers, Richards said. Critics of the state’s net metering law say it allows customers to reduce their electricity bills to zero and not pay for the utility’s cost for maintaining electrical infrastructure, such as poles and wires.

But renewable energy advocates say the fees would make it harder for residents to finance solar installation in Washington Electric’s north-central Vermont service area. Net metering customers can currently finance solar installations for roughly the cost of a monthly electric bill.

Ben Walsh, a clean energy advocate for the Vermont Public Interests Research Group, says the fixed fee will effectively drive up the cost of solar.

“If this tariff is implemented, going solar is going to be less appealing to WEC customers because the cost will functionally be higher,” Walsh said.

Unlike other utilities that benefit from using solar power during times of summer electricity peak demand periods – when they would otherwise have to use more expensive fossil fuel generators to power air conditioning units – Washington County peaks in the winter at times when solar power is unavailable.

As a result, the net-metering program costs the co-op money to operate. By adding fees, Richards said the program would become cost-neutral and allow the co-op to offer the program to all members without increasing rates. The co-op is currently proposing a 3.78 percent rate increase that would take effect August 1.

This year the state expanded the net metering program after several utilities reached limits on the amount of power they can generate from rooftop and back yard solar, wind and other renewable energy sources.

Hardwick and Morrisville electric departments and the Vermont Electric Cooperative have since reinstated net metering programs, according to state officials. Washington Electric must seek approval from the Vermont Public Service Board for the fixed customer charge and grid fees.

Any utility that has a power portfolio that is 90 percent renewable and 10 percent net metered is eligible to design their own program. WEC is committing to purchase 20,000 renewable energy credits to qualify for this provision in the new net metering law.

Darren Springer, the deputy commissioner of the Vermont Department of Public Service is supporting Washington Electric’s proposal.

“A one size may not fit all,” Springer said. “We understand that WEC has a different profile when it comes to net metering. We’ll learn from this how some of these approaches work in the real world.”

As part of the net metering law, state regulators will redesign the state’s net metering program by 2017. Allowing utilities to experiment with their own net metering programs will inform this discussion, Springer said.

Renewable Energy Vermont, a renewable industry trade group, is opposing Washington Electric’s proposal because it makes installing solar less economical.

The group does not have formal recommendations for how WEC should better redesign their program to deal with their winter peak. But Gabrielle Stebbins, the group’s executive director, suggested some possible options, such as an incentive for small-scale wind power.

Utilities currently offer a “solar adder” to ensure customers get a fixed price for solar net-metered power. The price is 20 cents per kilowatt-hour for systems that produce less than 15 kilowatts and 19 cents per kilowatt-hour for systems that produce more than 15 kilowatts.

The co-op is proposing a 4 cents per kilowatt-hour grid service fee for new net metering members, which totals about $2.10 per month for the average WEC member who uses 500 kilowatts per month and has installed a 300 kilowatt system, according to WEC.  Including the standard fees that all customers pay, the  net-metering member would pay about $35 per month.

The co-op is also asking to keep the renewable energy credits that their customers create when they install their renewable energy projects. The utility could keep these credits so the power is credited as renewable or sell them in exchange for power that is a mix of renewable and fossil fuel power.

WEC will encourage net metering customers to improve home energy efficiency through Efficiency Vermont’s home audit program. High electricity consumers – households that use 750 kWh per month or greater – will be required to undergo an audit, according to the proposal.

Clarification: Washington Electric’s grid service fee for net metering-customers would add an average of $2.10 to the basic fees paid by all members.