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Utah sets net metering rates, ending yearslong battle

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Utah sets net metering rates, ending yearslong battle

The Utah Public Service Commission has established rates at which rooftop solar customers who export energy to the grid will be paid, settling a yearslong battle over how to compensate the growing number of citizens who opt to power their homes with solar panels.

The Oct. 30 order represents a compromise between renewable energy advocates and PacifiCorp, Utah's largest utility, which operates as Rocky Mountain Power Inc. in the state

The order directs PacifiCorp to pay its rooftop solar customers 5.969 cents/kWh for power exported to the grid from June through September and 5.639 cents/kWh from October through May.

Regulators in 2017 established a transition net metering program as they decided how to create a new, more final system. Under the transition program, PacifiCorp paid rooftop solar customers 9.2 cents/kWh for excess energy they supplied.

PacifiCorp had asked commissioners to lower credit rates to between 1.3247 cents/kWh and 2.6293 cents/kWh. Solar energy trade groups said the utility should maintain or increase the transitional rate. Advocacy group Vote Solar argued that rooftop solar customers should be paid up to 22.6 cents/kWh, a calculation that included not only the value of electricity but also environmental benefits such as reduced carbon emissions.

But the three commissioners, all of whom were appointed by Republican Gov. Gary Herbert, rejected the idea that they should account for the environmental benefits of rooftop solar generation. More states, such as Colorado, are reforming utility ratemaking to give more weight to environmental effects. Utah has a voluntary renewable portfolio standard of 25% by 2025.

"While we recognize the importance of environmental considerations, carbon policy, economic development, and public health, these matters fall within the regulatory ambit of other government agencies," the order said. "We will not appropriate those agencies' authority or pretend to their essential expertise by adopting a boundless view of our own in the context of utility ratemaking."

"[W]e also recognize the opportunity to update the export credit rate in the event that carbon or environmental requirements allow the utility to avoid quantifiable costs through customer generation," the order added.

Regulators rejected PacifiCorp's request to impose application and metering fees on rooftop solar customers.

Rocky Mountain Power serves roughly 907,000 electric customers in Utah, and 40,450 of them were rooftop solar customers as of the fourth quarter of 2019. That year, Rocky Mountain Power paid $2.3 million to rooftop solar customers for generating excess electricity. PacifiCorp is a subsidiary of Berkshire Hathaway Energy.

Regulators across the nation have been grappling with how to strike a balance between fairly compensating rooftop solar customers without passing the costs of grid infrastructure on to customers who cannot afford to install solar panels.