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Renewable energy groups protest proposed OG&E demand charge in Oklahoma

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


Renewable energy groups protest proposed OG&E demand charge in Oklahoma

Solar energy and renewable energy advocacy groups arespeaking out in opposition to new and increased fees that could be imposed oncustomers of Oklahoma Gas andElectric Co. as part of a rate case proceeding being considered byOklahoma regulators.

The Oklahoma Corporation Commission is scheduled to hold ahearing May 3 on the OGE EnergyCorp. subsidiary's rate case, which includes a proposed $2.75-per-kW-month chargeand a jump in the fixed monthly charge.

Susan Glick, a spokeswoman for the Alliance for Solar Choicein Oklahoma, said in an interview that the demand charge would not only applyto solar customers but to all residential customers, and that the fixedcustomer charge could more than double. "Demand charges arepoor policy for residential customers, and incredibly punitive," Glicksaid. "There's no reasoning behind it and no evidence to support it inOG&E's case."

Demand charges can kill incentives for energy conservationand can be confusing to customers because the charges are not representative ofactual energy use patterns over a month, according to Glick. "It would belike if my supermarket based my monthly grocery bill on the shopping load I didfor Thanksgiving dinner when every single other day all I buy is red beans andrice," she said.

According to TASC's testimony submitted to the OCC, theorganization is committed to maintaining and encouraging consumer choice and "fairrate-setting practices, particularly as it applies to the Company's residentialsolar customers and those customers who hope to power their homes with solar inthe future."

Several utilities across the U.S. have sought to impose demand charges, with the one of thefew to succeed. Solar installations in the Salt River Project's serviceterritory, according to Glick, declined by 95% following the addition of thedemand charge.

Glick said some utilities appear to be using demand chargesas a mechanism to address solar competition concerns.

Other groups, including the Sierra Club, also filed opposingtestimony with the OCC. The utility's proposal "to double themandatory customer charge and impose a demand charge based on the customer'speak energy usage is unfair, inequitable, and counter to Oklahoma's goals toencourage demand reduction and alternative energy development," the SierraClub said in its testimony. "OG&E's proposed rates are contrary tostate energy policy and will ultimately increase costs to serve customersbecause it will discourage energy efficiency and distributed generation."

The Sierra Club said the utility's requested customer chargewould be among the highest in the country for residential customers.

The OCC determinedApril 12 that OG&E's proposal for distributed generation tariffs should beconsidered as part of the utility's ongoing rate case. The company firstproposed thedistributed generation tariffs in July 2015, which would have included demand,energy, fuel and customer charges, and a new net-metering rider, in response toa 2014 law thatallows electric utilities to seek to impose a special fee on customers whogenerate their own power.

OG&E in December 2015 asked the OCC to a rate increase of $92.5million when compared to OG&E's rates that were implemented in August 2012.Since its last rate case, OG&E said it has added 700 miles of transmissionlines, 5,500 miles of distribution lines, more than 11,000 transformers and 12substations to better serve a growing number of customers, the cost of whichthe company said is not reflected in its current rates.