Net Metering Affects Rural Electric Cooperatives Too

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June 11, 2015

Net metering issues for solar power don’t just affect customers of large utilities. As recent news from Colorado makes clear, rural cooperatives have much at stake too.

In a piece earlier this week, Cathy Proctor of the Denver Business Journal describes how a wave of new solar customers for Colorado’s largest rural cooperative could lead to changes in the way the utility treats net metering. Intermountain Rural Electric Association (IREA), which serves about 148,000 customers across parts of six Colorado counties, is poised this year to see the number of solar rooftop customers on its system quadruple from the end of 2014. By the start of next year, about a thousand IREA customers will have installed solar rooftops that are tied to the electric grid.

That means it is important for the utility to get its net metering policy right. Today, though, IREA pays solar customers the full retail rate for excess power produced from their solar rooftops. That amounts to a little more than 12¢ per kilowatt-hour for power produced from a solar rooftop. Compare that figure to the 5¢ per kilowatt-hour that IREA pays for power from other sources. Simply put, IREA’s net metering policy means the utility is paying far more than it should to owners of solar rooftops.

To correct the problem, IREA proposed steps to bring its net metering policy into balance. The plan consisted of lowering the payment for solar rooftop generation to 6.5¢ per kilowatt-hour, while also allowing solar customers to purchase electricity at that same lower rate when the sun goes down. The utility also would have assessed a new demand charge, averaging about $9.30 per solar customer, to ensure that revenue exists to pay for both the cost of the grid and for standby power for when a customer’s solar panels aren’t working. It stands to reason that customers who choose to use the grid as a battery backup should pay something for power that’s generated in case they need it.

Such a plan seems logical enough, especially considering that IREA is paying solar rooftop owners twice what the utility could have paid to other – presumably more reliable – electricity providers. Naturally, the solar industry and its customers, having grown accustomed to the generous subsidy, disagreed. On Tuesday, the Denver Post reported that officials at IREA decided to delay its plan amid pressure from solar customers. Let’s hope those officials eventually see past the self-interested arguments of a few dozen solar rooftop owners and do what’s right for all of their customers.

As PACE argued in The Hill in April, net metering fights in Louisiana and elsewhere across the nation expose the truth that overpaying solar rooftop owners for their excess electricity is bad for almost everyone. Not only do bad net metering policies force utilities to spend money unwisely – remember that IREA is paying double the market rate to solar rooftop owners – but those policies potentially raise power bills for all other customers. By overpaying Peter for solar rooftop generation, net metering sticks Paul with a higher bill.

It’s easy for the solar industry and its advocates to attack the nation’s largest utilities in the net metering debate. But policymakers should know that some of the nation’s smallest electricity providers have much at stake in this fight too. Getting net metering policy right is good for everyone, including the millions of homes and businesses served by our nation’s rural cooperatives.