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In Utah, fight over future of net metering heats up

Utah regulators set a public witness hearing for Aug. 9 on PacifiCorp 's proposal to replace retail net metering for solar customers with a less generous tariff the utility says is more in line with the costs of serving those customers. The hearing will continue until everyone who shows up has a reasonable opportunity to address the Public Service Commission, an order for the hearing stated. If the volume of public comments filed in the PSC's docket is any indication, the commission is in for a long hearing. Dozens of people have sent emails and letters in opposition to the tariff change. (Docket No. 14-035-114)

PacifiCorp, which serves 875,130 customers in Utah as the state's dominant investor-owned utility, wants to cut payments for excess power that customers who own solar panels export to the utility, while establishing a separate rate class for rooftop solar customers with increased service fees and demand charges. The Berkshire Hathaway Energy subsidiary, which does business in Utah as Rocky Mountain Power, asked the commission to find that the costs of its net metering program with retail rate credits exceed the program's benefits and net-metered customers should be placed in a separate rate class to prevent unfair cost shifts to other customers. The company proposed new application fees for interconnections and a new electric service schedule for distributed generators.

Rocky Mountain Power Senior Vice President Gary Hoogeveen said in July 25 testimony that on an environmental basis there is no need to pay solar generators a retail rate that is three times what PacifiCorp pays wholesale renewable power generators for the same product. If a private generation customer exports excess energy, that customer should receive market value for that energy and the rooftop solar industry should stand on its own without subsidies, he continued.

PacifiCorp's proposals have prompted comments and protests from major solar companies, environmental groups, clean energy advocates, consumer advocates and many individual customers.

Costs vs. benefits

Testifying on behalf of the Energy Freedom Coalition of America, Tesla Inc. Energy Policy Manager Eliah Gilfenbaum said, "Customers with self-generation contribute the vast majority of the cost of serving them," and the long-term value to ratepayers and to the grid operator of these energy exports is higher than the average retail credit those customers receive. The coalition represents several companies that make and distribute rooftop solar equipment.

The dispute has fueled a clash between PacifiCorp and two solar companies over the utility's motions for detailed information on the companies' customer and financial information. Vivint Solar Inc. and Auric Solar LLC objected to PacifiCorp's efforts to dispute their position that the utility's proposals would ruin their businesses in Utah. Vivint has testified that PacifiCorp's proposed rate design would eliminate thousands of jobs, stifle competition and reduce customer choice.

The state Office of Consumer Services recommended moving away from net metering to a new rate design. Director Michelle Beck testified that both the state consumer advocate and the PSC's Division of Public Utilities, which makes recommendations to the PSC on ratemaking and other utility issues, have made transition proposals that would phase out the program. Beck said she favors a gradual transition and would grandfather existing net metered customers for 12 to 17 years with retail rate credits.

She said the positions of her office and the Public Utilities office are converging on an emerging cost-shift problem that should be addressed in rate designs in future rate cases. While she agrees that the cost of the net metering program under the current rate structure exceeds its benefits, Consumer Services does not believe that it is necessary to create a separate customer class for residential net metering customers.