Midwest Energy News, September 26, 2013
The owner of this Wisconsin home says his co-op is underpaying him for energy he produces during peak summer hours. Gary Konkol’s home annually produces more energy than it consumes, but his energy bill is about to go up.
Konkol is one of just eleven customers of Wisconsin’s St. Croix Electric Cooperative who own solar electric panels on their home.
A new policy that took effect in May means those homeowners will see much lower payments for the extra electricity they generate on sunny days.
For Konkol and the others, that means waiting several more years to break even on their investments — if they break even at all.
Under the policy in place at the time Konkol built the home, that extra electricity flows back onto the grid, where it helps run his neighbors’ lights, televisions, and air conditioners. In return, the coop has reimbursed him for that power at the retail rate, the same rate he pays the utility for electricity. Depending on the time of year, it’s about 10 or 11 cents per kWh.
The concept is known as net metering, in which customers’ meters or bills run forward or backward depending on the electricity they use and produce. The past three years, Konkol has earned a credit on his bill during the summer months that paid for his wintertime usage, leaving just a $25 fixed monthly base charge.
That monthly base charge, which will increase to about $28 in January, doesn’t cover the cost of providing the service, which is closer to $40 on average, Pendergast said.
“If a member is not paying for any energy purchases, the other cooperative members must make up the revenue shortfall,” he wrote.
To address that problem, the cooperative’s board in May announced the utility will no longer pay solar owners the retail rate. Instead, it will buy customers’ surplus generation at what’s known as “avoided cost,” a rate based on what it would cost the utility to buy or produce an equivalent amount of electricity on its own.
That rate: between 2.75 and 3.75 cents per kWh.
Solar policy expert John Farrell, a senior researcher at the Institute for Local Self Reliance in Minneapolis, said solar power does tend to have additional value over a generic power source such as coal, and the avoided-cost rate doesn’t recognize that value. (In Minnesota, regulators recently started a process to develop a “value of solar” rate that considers solar’s premium.)
The conflict between this small cooperative and a dozen members is “a microcosm of a huge war being waged between utilities and customer-generators of power over the utility’s future financial livelihood,” Farrell said. Customers are finding less expensive ways to get energy, and utilities are responding by adding fees, raising rates, and hiking fixed charges.
“They just don’t know how to deal with it,” said a frustrated Konkol. “The way we produce electricity is changing, and the old model doesn’t work.”