After public outrage, Xcel zaps solar-panel fee
By Charles Ashby 
| August 4, 2009 | 4:47 PM
There were just too many questions, too much confusion, or maybe it was just too much opposition. Regardless, with barely 24 hours remaining before a public hearing was to begin on the subject, Xcel Energy decided to drop a request to charge solar power customers a new fee for being connected to its grid.
Xcel had hoped to get the Colorado Public Utilities Commission to approve a new fee — 2.6 cents per kilowatt hour — for homeowners who install solar panels on their roofs. Company officials said the fee was a matter of fairness to other customers: Solar panel systems often generate enough electricity for a home not to need any power from the grid. As a result, such homeowners have a backup power system but aren’t paying for it.
The fee proposal drew outrage from solar panel owners and renewable energy advocates who said the charge essentially punished people for not using the regular grid.
That’s not all they aren’t paying for, Xcel spokesman Tom Henley said.
“The main reason why we decided to do this was because there was a tremendous amount of confusion over the minimum charge,” he said. “(There are) a lot of people out there in the (solar) industry itself and customers in general who think this was in addition to what customers pay. This was at its heart an attempt to try to get customers that are zeroing out their energy bill by solar power production to essentially still pay for their connection to the grid.”
The way it works for all utility customers, Henley said, is that each customer pays for being connected to Xcel’s grid through a nominal kilowatt-per-hour charge. But of the 5,660 “net-metered” customers on Xcel rolls — homeowners who have solar panels on their roofs –about 3,000 routinely generate more power than they need. So not only are they not paying anything to the utility, they are getting paid by Xcel for the additional power they transmit onto the grid.
As a result, those solar customers are being subsidized by everyone else, Henley said. At the same time, they aren’t paying other fees that the rest of Xcel’s customers do, including fees for programs that helped some of them get solar panels on their roofs in the first place.
“They’re not paying for programs like the demand-side management program, which helps customers to install energy-efficiency equipment,” he said. “They’re not paying, ironically enough, back into the renewable energy standards adjustment, which is the fund that all customers pay in to with 2 percent of their bill. Those dollars then go towards paying for people to essentially have solar panels on their homes. So, even though they benefited from that fund, they’re no longer paying into it.”
He also said they’re not paying into things like the electrical commodity adjustment, or franchise fees to local governments.
Henley said Xcel still has concerns over the matter and plans to bring opponents to the table to discuss a possible solution that everyone can live with. The fee would have amounted to about $1.90 a month for a customer who has solar panels that generate about 4.5 kilowatts. That’s about $23 a year.
Gov. Bill Ritter praised Xcel’s decision, saying the new fee would have slowed the drive for his “new energy economy” and would have threatened jobs in the solar power industry because it would have been a disincentive for homeowners to invest in the technology.
“I commend Xcel for reconsidering this proposal,” Ritter said in a statement. “We appreciate Xcel’s concerns about the cost of distributing power and maintaining the electric grid, and we will work with Xcel to study these issues moving forward.”
Beth Hart, executive director of the Colorado Solar Energy Industries Association, said she, too, was pleased that Xcel had withdrawn the fee proposal — although she bemoaned still having to pay the attorneys and expert witnesses she had planned to march before the three-member PUC.
Still, winning the battle without a fight is always best, even if the war isn’t yet over.
“We’re just very excited that industry and the net-metered customers and GEO (Governor’s Energy Office) and the governor’s office had all come together and helped Xcel to see the light,” she said. “This issue doesn’t go away, though. Energy efficiency and renewable energy and solar on roofs means less revenue to Xcel, so how do we go forward?
“I understand that there’s a distribution and transmission charge that the residential-class ratepayers pay, and that net-metered customers haven’t been charged. I do understand that,” she added. “But I also understand that the calculations that (Xcel) came up with were very convoluted. There are ratepayers who do not have the average 4.5-kilowatt solar system. They were going to pay five to 10 times the average fee, at least. I had some really upset net-metered customers. Then, you would have had net-metered customers subsidizing everyone else, and that doesn’t work either.”
She said the calculations also didn’t adequately take into account the savings Xcel gets by drawing on the same customers to meet its state requirement to generate at least 4 percent of its energy from solar power. That’s part of overall standards all power companies must meet in the state; they must generate at least 20 percent of their electricity from renewable sources by 2020.
Hart said there is some middle ground to be found, and Hanley was hopeful that all sides ultimately could agree on just where that is.
governor’s energy office, public utilities commission, solar energy industries association, solar power, Xcel Energy
