Dropping prices on photovoltaic panels have brought a surge of residential installations and net metering, where utilities pay households for the electricity they return to the grid. But utility managers agree the pricing structure for net metering needs to change.
LaVarr Webb is a spokesman with UAMPS — Utah Associated Municipal Power Systems — and sees a revolution coming with home-produced energy.
“UAMPS leadership doesn’t believe our members should fight it, but we should embrace it, lead it and encourage it,” he said. “Having said that, there is still very much a need to have a baseload energy system and a strong grid ... and of course, that costs money.”
The problem with net metering for utilities large and small is that it does not adequately distribute the costs of maintaining the infrastructure. Rocky Mountain Power, the largest provider of electricity in Utah, has received a lot of flak for its recent proposal to increase charges to rooftop solar customers. UAMPS supports 34 community-owned members in Utah that provide their own power, and they’re struggling with similar issues.
UAMPS members get their power through a variety of means, like hydropower, locally owned gas plants and shares in larger coal-fired plants, and they maintain their own power lines. It takes money to keep that infrastructure running — a cost power providers traditionally built into their per-kilowatt hour price.
“Basically, the traditional model doesn’t work because everyone isn’t using it,” said Allen Johnson, the power department director for Bountiful city. “Some people say, ‘I’m generating my own load … I don’t want to pay anything to utility,’ so all those costs are being shipped to their neighbors.”
In other words, non-solar customers end up paying a disproportionate cost of maintaining the grid.
In June 2015, Kaysville tried to put a moratorium onnet metering to evaluate how to keep costs low for all electric customers. The city soon found itself in hot water as solar-supporting citizens protested. John Loveless, an electric engineer and rooftop solar enthusiast, was among those upset.
“I was livid they’d consider it. It makes sense to do a moratorium if there’s so much solar it’s causing problems, affecting the stability of the grid, but that only happens when half the customers have solar and there are ways around that,” he said. “It was a knee-jerk reaction.”
He also explained some of solar’s appeal for residential customers. He has 24 panels that charge his electric car and essentially make his home a “net zero” power consumer.
“I think it’s really cool to have energy that falls from the sky for free. It’s the ultimate independence,” Loveless said. “Why pay to burn something and pollute the air when you can use energy that falls from the sky for free?”
Beyond that, Loveless said, solar could contribute to clearing the Wasatch Front’s polluted skies.
“People who get solar are more likely to buy electric cars so their fuel will be free, and that there can solve half our air quality problems,” he said. “If you’re squelching solar, you’re squelching the electric car movement as well. They go hand-in-hand. I don’t think we should create laws and put penalties in place to prevent either one of them from flourishing.”
After hearing feedback from residents like Loveless and advocacy groups like Utah Clean Energy, Kaysville city quickly backpedaled, reinstating net metering but pondering future options. The city council is working to form a power advisory board staffed with experts to advise elected officials on issues like solar.
“This is such a new issue throughout the entire industry and one that can certainly be divisive,” said Kaysville Mayor Steve Hiatt. “Part of the reason we’re trying to be methodical is we recognize a lot of people are watching what we’re doing. We don’t want to be the ones that sit back and don’t tackle a complicated issue.”
On the larger scale, Rocky Mountain Power has proposed tackling that issue with a fixed monthly fee, a lower per-kilowatt hour rate and a demand charge for rooftop solar customers.
The demand charge would bill $9.02 per kilowatt for a household’s heaviest hour of electric use each month. The idea amassed heavy opposition from solar advocates, but small-scale electric providers see benefits in the charge, at least in concept.
“That was one of the first things we talked about that’s also the fairest,” said Johnson, with Bountiful power. “Our commercial customers get charged a true demand charge and … if we’re going to have (rooftop solar customers) be co-generators, they may not be typical residential customers, they may be more of a business.”
Utilities could instead impose a fixed monthly fee to cover grid maintenance costs, but that still puts a burden on fixed- and low-income households and creates less of an incentive to conserve energy, Johnson said.
Bountiful city, like Kaysville, supports local solar. Both cities currently have around 100 solar net-metering customers, and officials say they don’t want to discourage installations.
“It makes sense to generate power closest to the source,” Johnson said. “With a large-scale solar or wind plant, we pay 9 or 10 cents (per kilowatt hour) for their power, I’d just as soon as pay that to my customers.”
The biggest problem with local solar, though, lies with demand periods.
Bountiful, for example, is a bedroom community. Residents mostly go to work in Salt Lake County during the day, then return home in the evening, Johnson said. Peak electric demand is between 6 p.m. and 9 p.m. in the summer, when households run air conditioners, and 9 p.m. to around 10:30 p.m. in the winter for heating.
That’s also when solar panels generally aren’t producing power. The city instead has to turn to its natural gas plant to supplement evening demand.
“We’ve tried to explain (to rooftop solar customers) that if solar panels match their lifestyle, they are helping themselves and the grid,” Johnson said. “But if they are generating power when they aren’t home, and if the neighbors aren’t using it, then as a group ... it’s not helping any of us.”
That is the case with many UAMPS customers.
Households can help supplement summer demand by installing panels on the west side of their roofs instead of the east, although it’s not the most efficient way to generate kilowatts. In the future, improved batteries could save solar energy for peak demand periods, but that doesn’t help utilities much in the near-term.
“Battery storage is still quite expensive at this point, but people think with new technology, the price will go down,” Webb said. “Whether there’d be central battery storage or batteries in the home, or some combination, it’s all so new that we don’t have great answers yet.”
Another option being considered by UAMPS members is a feed-in tariff, which allows utilities to measure both the electricity flow into a home and flowing out, so they can be priced at separate rates.
“We’re not dictating what to do to our members, but encouraging them to consider (solar’s) value,” Webb said. “All factors need to be considered, including environmental benefits, including the fact that if enough people generate their own power down the road, UAMPS and member utilities may not need to build a new plant.”
As small-scale power providers ponder the rise of solar, they do offer some advantages for residents, compared with juggernauts like Rocky Mountain Power. As a monopoly utility, it’s heavily regulated by the Utah Public Service Commission, which will ultimately decide whether its net-metering proposal can move forward. The commission’s process has caused a lot of public confusion.
“(In Kaysville), a five-member council and mayor are essentially the power department and decision-making authority,” Hiatt said. “You’re not having to speak before some mysterious commission that you’re not sure who they are. It’s your friends and neighbors.”
Although the city’s early efforts to change net metering met some pushback, the local feedback has had a lot of influence.
“We’ve had a good relationship with solar community since then. We’re trying to do the right thing,” Hiatt said.
©2016 the Standard-Examiner (Ogden, Utah) Distributed by Tribune Content Agency, LLC.
