Letter to the Editor: Rocky Mountain Power solar study is flawed and incomplete

Photo by EzumeImages/iStock/Getty Images Plus; St. George News

OPINION — Solar is finally taking hold in Washington County and in Utah in general. In fact, Utah is the 6th largest solar state in the nation, which surprised me. Even conservative Utah Congresswoman Mia Love’s city of Saratoga Springs, where she served as mayor, is bursting with rooftop solar.

But the future of solar may be at risk if Utah’s Public Service Commission doesn’t make the right decision regarding a rate hike requested by Rocky Mountain Power.

I drove to Salt Lake City with my partner Paul Van Dam for an August 9 public hearing at which the Public Service Commission took oral comments from citizens about rooftop solar and RMP’s proposed rate increase for those who have solar or would get solar in the future. We both took time before the meeting to bone up on the details pertaining to the PSC Docket 14-035-114 and it was quite enlightening.

Rocky Mountain Power (RMP) is arguing that non-solar customers are subsidizing those who have roof top solar thus necessitating, they feel, a rate increase, in all fairness (of course!) to their non-solar customers. This new docket resulted from RMP’s 2014 general rate case (Docket No. 13-035-184) which generated opposition and resulted in the PSC’s requirement that the Company’s net metering program costs and benefits be analyzed.

In response to this, RMP initiated a load study to assess the usage characteristics of Utah’s “residential” solar customers. The study was focused on peak energy usage, degree of differentiation between solar and non-solar customers, and the offset between energy delivered to customers and energy delivered from customers to RMP.

The study was supposed to help determine if usage patterns between solar NEM customers are different from non-NEM customers such that a separate tariff might be warranted for solar users.

This seems like a reasonable thing to do until one considers that RMP produced the study themselves rather than an unbiased third party doing it for the Commission’s information and decision-making.

In full disclosure, I must acknowledge that I am a solar customer, hence the reason Paul and I traveled to Salt Lake City for the hearing to comment. I’ll also disclose that the reasons for the switch to solar include the fact that RMP had been steadily raising rates. So I have to question their assertion that they are “protecting” non-solar customers since my experience as a former non-solar customer was that rates were going steadily up and where they were headed, I did not know.

One thing that many non-solar customers don’t realize is that NEM customers often have leftover energy credits from their solar production that equates to “free power” that RMP receives from its rooftop solar customers. Another thing is that non-solar customers benefit from NEM customers since excess power they generate and which is not used in their own system stays in the grid for other customers – perhaps their next door neighbor – to use.

Also, solar users are generally people who are very conscientious about energy use and have made great effort to minimize their own energy consumption even before buying solar. Often after installing solar, they become even more aware of their usage, as we have, and work to conserve even more.

As Paul and I prepared for the hearing, we reviewed concerns expressed by Sierra Club, HEAL Utah, UCAR and others, which made it clear to us that RMP’s load study is flawed and should not be relied upon by the PSC. Comments made during the hearing served to confirm that.

The first speaker had spent his career analyzing power use and rates clear up to the federal level. He said unequivocally that RMP’s analysis is wrong. He explained in great detail why that is the case. Furthermore, he stated that rooftop solar is a small portion of RMP’s capacity and that even in ten years that will be the case. He summed it up this way, “It’s a solution in search of a problem.” He encouraged RMP to file again in ten years if there really is a problem!

That started the hearing and the number of speakers who spoke against RMP significantly outnumbered those who were for by the time we left. We left because there were so many people signed up to speak and the room was filled to overflowing. Others were in a separate room with audio while many stood in the halls. We had great seats at the front near the commissioners, so we gave those up for others to enjoy.

Getting back to RMP’s load study and its deficiencies, an organization named Pecan Street was approached by Sierra Club and other concerned entities to review RMP’s study. From Pecan Street’s December 5, 2014 testimony to the PSC Review and recommendation of RMP proposed residential load research plan:

Pecan Street Inc. is a 5-year old non-profit launched with the assistance of a $10.4 M DOE grant with the expressed purpose of conducting research on residential energy usage in Austin, Texas. Today we are a globally recognized research organization that has developed unique processes for collecting residential and commercial energy data and supporting localized energy research. We are currently engaged with utilities and communities across the world, including San Diego, California, Boulder, Colorado, Oak Park, Illinois, and Amsterdam Smart cities to help those regional entities better understand how to transform their energy landscape.

So Pecan Street brought considerable knowledge to their review the RMP’s plan. One of their concerns was that RMP did not include the photovoltaic system size and orientation of customer systems into their data collection plan. The size of a system and its orientation determine how much energy is being produced and the time of day that energy may be at its peak:

“West facing arrays, for example, produce energy later in the day than south facing arrays, often resulting in energy production that is more closely aligned with grid peak demand. Without this data, it will not be possible to determine whether or not all NEM customers impact the grid in the same fashion.”

“Peak usage” time was a focus of RMP’s study since that is when they face their highest energy demand and must be able to meet that demand. However, by excluding details on solar size and orientation from their study, Pecan felt RMP’s study was incomplete.

It makes sense that this information should have been included if RMP was using their study to show the PSC that they were coming up short on meeting their peak power demand due to NEM but they argued in a separate filing that “The Company does not have ready access to three of these variables including size, orientation and gross consumption.”

I found the comment interesting. Although I don’t have details on all NEM customers with whom RMP deals, I do know that when I applied to RMP to participate in their NEM program, I had to submit my rooftop solar layout and system size, so in my case, and I assume most other NEM customers’ cases, RMP already has the information that Pecan Street said they omitted.

Pecan Street’s review of RMP’s load study addressed many other aspects of the study in too much detail to include here so I provide a link to their testimony should others be interested.

One problem that I and concerned NGOs noted in their testimony is the exclusion of commercial from RMP’s load study. RMP asserted at a technical conference on this issue that commercial customers already have demand meters installed, which is sufficient in providing data to develop load characteristics. However, excluding this information from the load study gives the appearance of omission that could bias the study against residential NEM customers.

The PSC directed RMP (according to their PSC December 19, 2014 testimony) to include in the study:

  • Usage at the times of peaks
  • Degree of differentiation between Utah residential NEM customers and Utah residential non-NEM customers
  • The degree to which energy delivered to the customer from RMP is being offset by energy delivered from the customer to RMP

These requirements specify “residential” – not commercial – and whether the PSC by inference directed RMP should include the other information that the NGOs and Pecan Street feel they should have included, I do not know, but RMP’s December 2014 testimony clearly states they do not feel the Commission directed them to do so.

Regarding the exclusion of “commercial” in the study, RMP replied that their direction was to study residential but they are not opposed to additional evaluation of commercial and will work to develop plans for commercial evaluation. This was their 2014 testimony. I have found nothing in my study to indicate they have done commercial evaluation and included it at this point, but with the massive amount of information in this docket, I may have missed that.

In November 2016, Rocky Mountain Power applied to the Utah Public Service Commission to implement a new rate structure on Utah households that power their homes with rooftop solar.

It will be up to the Commission following the August 9 hearing to determine if the scope of the study should be expanded to include commercial and the other issues raised. I will add that RMP’s study included a mere 62 sites. They explained that it would cost to do many more, and that may be the case. But it raises the question: Is a 62-site sample a fair evaluation?

HEAL Utah in collaboration with Westminster College produced their own solar study feeling the utility’s justification for a rate change is based on limited data. The HEAL study sought to provide a broader set of data including history of rooftop solar in Utah, utility bills of solar users – before and after adopting solar – motivations for adopting solar and demographic data on owners in hopes this would provide additional data to the Commission for their decision.

HEAL’s survey was sent to 498 rooftop solar owners; 220 respondents completed the survey – a number approximately six timed larger than RMP’s study group.

I noticed during the 8/9 hearing that many of the solar customers who spoke were extremely well prepared with detailed information about the solar industry and the flaws in RMP’s study. Some, as ourselves, indicated that if fees get too onerous they will just go off grid, but acknowledge they (and we) don’t want to do that since it won’t help the situation.

But, if RMP’s purpose (under parent company Berkshire Hathaway) is to drive rooftop solar out of the market so they can control the solar market, virtually eliminating any distributive system in favor of an “at risk” centralized system, then going alone may make sense to many who can afford to do so.

Of course there were speakers from the electrical community, Dixie Power and others, who spoke in favor of RMP’s request. An August 10 Deseret News article about the hearing quoted RMP’s spokesman Jon Cox about the current compromise that focuses exclusively on energy reimbursement rates to NEM customers.

“We currently buy solar from two different sources: rooftop solar customers and solar farms. The main difference between the two is that the state of Utah requires us to pay three times more for rooftop solar than solar farms. We believe that needs to change so our other customers aren’t paying above-market rates for solar when other sources are readily available.” The article also notes that, “…every kilowatt generated on rooftops is one less the utility company sells.”

That, however, fails to acknowledge that the homeowners have incurred the cost of installation that produces that rooftop solar – effectively keeping RMP from having to seek it elsewhere. It also ignores the fact that solar farms are businesses that get certain business write offs while residential solar owners do not, other than initial tax credits.

One must also ask, “Does RMP get free energy credits from solar farms as they get from rooftop owners who do not use all their energy produced?” I doubt it.

RMP’s assertion that non-NEM customers are subsidizing NEM customers ignores the fact that NEM customers make up such a small portion of RMP’s overall customer base that one must ask what all the brouhaha is about. According to RMP’s website they have 875,130 customers in Utah. Only 20,000 of those are rooftop solar NEM customers. That’s a mere 2% of their entire customer base. Again, there request of a fee hike seems a “solution looking for a problem.”

As of the Aug. 9 meeting three tiers of NEM were under consideration by the PSC, but that might change. So far those who currently have solar or have installed by December 2017 will, under the plan being considered, be grandfathered under the current NEM rates for a yet-to-be-determined time period. That would include us.

Yes, I could say, “Great, we’ve got ours, now let solar go down the tubes.” But that’s not what this is all about. It’s also why I don’t particularly want to go off grid unless it becomes truly reasonable to do so. This is about a new future. For RMP to argue now that they want to protect their non-solar customers from subsidizing solar customer ignores the fact that many have gone to solar because of RMP raising rates to its customers.

It seems if RMP were really wanting to support solar – rather than coal and other fossil fuels – they would have gotten on the resident rooftop solar installation bandwagon long ago rather than letting other companies do that ahead of them, while they now come back whining about it. But with their parent company, Berkshire Hathaway, so heavily invested in coal that was not to be.

As the PSC docket is underway a second line of negotiation is underway between RMP, solar companies and the governor’s office. So, it also remains to be seen what will come of those negotiations. The mid-September decision has been delayed by the ongoing negotiations and there may be a new comment period depending on what the PSC decides.

As a retired twenty-year oil and gas employee who over the years has become concerned with climate change and the effects burning fossil fuels has had and continues to have on our planet, I want to do what’s right to help create a new better, cleaner and more secure future. I hope others will too. Public comments are still being accepted at 160 East 300 South, Salt Lake City, UT 84111 and via email to psc@utah.gov.

On August 9, the day of the PSC hearing, RMP ran a full-page advertisement in the Salt Lake Tribune praising themselves for their focus on solar. It appears that as long as RMP can control the solar game in Utah, they’re good with it, but not so much when free market competition faces them.

Written by LISA RUTHERFORD, Ivins, Utah.

Letters to the Editor are not the product or opinion of St. George News and are given only light edit for technical style and formatting. The matters stated and opinions given are the responsibility of the person submitting them.

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7 Comments

  • Caveat_Emptor August 15, 2017 at 1:18 pm

    Interesting perspective.
    Perhaps we need to avoid confusing two different issues that come to mind.
    1. The broad issue of identifying and implementing non-fossil fuel based sources of electricity, such as photo-voltaic and wind. Public policy initiatives help support this endeavor through federal tax credits, and EPA regulations that are aimed squarely at coal-fired power plants.
    2. The value of electricity generated by residential solar panel installations, that exceeds their own personal needs, at specific times of the day, and days of the week. This should be the focus of the RMP discussion, exclusively.

    As a non-solar customer, all I am expecting is that the PSC arrives at a fair reimbursement rate for those electrons generated by the residential solar customers. It strikes me that the heated public discussions have unfortunately confused both issues, as the PSC’s responsibility, when in fact they should be focused on valuing these electrons………

  • mmsandie August 15, 2017 at 3:01 pm

    No one mentioned that Rmp increases rates to pay for the new building in bloomington

  • Neil August 15, 2017 at 9:08 pm

    Rocky Mountain Power is a ruthless cartel that gouges the customers that are unfortunate enough to live in their monopolistic fiefdom. Their top tier rates are almost triple that of Dixie Power’s rates! If they had to compete with other power companies they would collapse under their own weight. Warren Buffet should be ashamed of himself.

  • ffwife August 15, 2017 at 9:21 pm

    If they want to ding me for purchasing a solar system for my home, I will get batteries and say goodbye. I will not be held hostage for doing the right thing and paying a considerable price tag up front for it. It is my equipment, I paid for it.

    • mesaman August 15, 2017 at 10:02 pm

      Y’all come back soon.

  • Brian August 15, 2017 at 10:04 pm

    This is actually quite simple, made so by the fact that the vast majority of power generated by solar is generated near peak times (ie. the most valuable electricity), and it is used by net-metering customers to offset the power they used at the lowest priced power. Ergo, net-metering customers are more than paying their fair share, despite the price difference compared to wholesale rates.

    However, I do see the need to cover the hard costs (meter, lines, etc), so there should be an equipment fee. But there is already supposed to be an equipment fee that everyone pays (even if you use zero electricity there is still a minimum bill that is $15 – $25 or so). Make that reasonably higher for net-metering customers because their equipment costs more.

    I think that is reasonable. By separating the hard costs from the power costs all three sides (net-metering customers, non-net-metering customers, and the utility) are all treated fairly.

  • Redbud August 16, 2017 at 2:36 am

    I can’t wait for the day when solar and battery storage become more affordable, and people leave their electric companies in droves! They use any excuse they can to raise customer’s rates. They claim to promote ”going green”, energy conservation, etc., but then show their true face by trying to suffocate the growth of solar power. I’ve thought about calling up Legend Solar, or some other company similar to them, and see if I could really save money by installing solar panels, but I fear the return on investment would take too long for my liking, and it’s not like I have the cash sitting around to just buy the system upfront, I’d have to finance some of it, and what happens if I try to sell my house before it’s paid off?

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