What did the board decide on February 23rd?

The February 23 board meeting was our last opportunity to request the board reverse its position on the rate change. Many people wrote letters and contacted their board representatives with their concerns. Our online petition had over 700 signatories with personal stories and reasons they wanted to reject the rate change.

At the beginning of the meeting, BV Representative on the board Dave Volpe made the motion that the board rescind their vote to institute the rate changes that was made last October and ensure that net meter customers are compensated in any upcoming rate change with a 1:1 credit for power generated. So, in short there will be no rate change on April 1st.

That is a great victory for the membership of SDCEA. The board should be commended for taking that action, doing it quickly and doing it decisively.

So, where are we now? The lawyer for SDCEA maintains that the net metering statute is unclear and that it needs to be challenged to have some judicial precedence on what it means. They just didn’t want to be the cooperative challenging the net metering statute. Furthermore, a post from CEO Paul Erickson outlined a process going forward which entailed going back to their same engineering consultant in Wisconsin and asking for other rate alternatives. Then, he says:

“We expect to receive the alternative options sometime in late spring or early summer. Should we find the revised recommendations satisfactory, we will immediately inform our members of any changes. For now, the current rate structure remains in place and no changes will be implemented.”

This is entirely unacceptable.

The membership of SDCEA requests to be involved in the determination of priorities for the rate change and the design of rate approaches that the board should consider. We do not simply want them to go through the same non-transparent process, vote on the rate change, and then let us know what they have already decided. This is how we got into the unfortunate situation we are already in. Those who don’t learn from history are bound to repeat it.

On this website, we will be requesting input from SDCEA members on what they would like to see as priorities for the board as they look to new rates. We are looking into the possibility of hiring another firm to look at rate making alternatives to present to the board. We can do better than repeating the same broken process. The first step is for the board to give the engineering firm as well as the utility leadership clear direction regarding their objectives for the new rate schedules. What are they trying to accomplish? Who are they trying to protect? I would suggest their number one concern should be low income customers and those living on fixed incomes - not adversely impacting them the way the last rate schedule would have. I would also suggest not rewarding high energy users and punishing low energy users - we need to promote energy efficiency not punish it.

On the Net Metering statute not being clear, here’s some background. The 2004 ballot initiative Amendment 37 established net metering in our statutes for investor owned utilities like Xcel. Rural cooperatives that offered bi-directional meters for solar customers (allowing solar producers to deliver excess solar to the grid) were doing two big things different than investor owned utilities like Xcel. They were not providing true net metering based on a kWh credit for every kWh delivered to the grid, instead they were offering a credit of an “energy value” against any power the customer purchased from the grid. At the time cooperatives refused to compensate solar generators at the “retail rate”. This is referred to as “net billing” - you are billed for the net of the value of your credit against the cost of your consumption - net billing is based on a cost value measured in ¢/kWh, net metering is based on generation measured in Kilowatt Hours (kWhs). The second thing cooperatives were doing was trueing up excess generation from solar customers every month rather than annually. What this meant was that any excess credit for generation at the end of the month would not even be credited for “energy value”, but a fraction of that - what cooperatives called “avoided cost”. The legislation was trying to remedy these two problems with the following paragraphs:

(2) Each cooperative electric association shall allow a customer-generator's retail electricity consumption to be offset by the electricity generated from eligible energy resources on the customer-generator's side of the meter that are interconnected with the facilities of the cooperative electric association, subject to the following:

(a) Monthly excess generation. If a customer-generator generates electricity in excess of the customer-generator's monthly consumption, all such excess energy, expressed in kilowatt-hours, shall be carried forward from month to month and credited at a ratio of one to one against the customer-generator's energy consumption, expressed in kilowatt-hours, in subsequent months.

In paragraph (2) it says “customer-generator’s retail electricity consumption to be offset by the electricity generated from eligible energy resources on the customer-generator’s side of the meter” - this means the consumption is directly offset by electricity generated. If you generate a kWh, your consumption of kWh is directly offset at the full retail rate (retail electricity consumption). You can’t offset a portion of the retail consumption, you must offset completely by the energy generated. A one-for-one credit of kWh generated and put on the grid against the retail consumption of electricity off the grid.

Second, the paragraph (a) says that any excess kWh must be carried forward - again, credited one to one against consumption in future months.

At the time we wrote this legislation, we knew cooperatives would be trying to figure out ways to get around this requirement, maybe by charging additional fees or putting in place rate schedules that punished net meter customers. So we added paragraph (c):

(c) Nondiscriminatory rates. A cooperative electric association shall provide net metering service at nondiscriminatory rates.

Sangre de Cristo’s proposed net meter would have violated both of these sections. They wouldn’t have changed the month to month carry forward of credits, but they would not have credited them at a one-to-one rate kWh produced for kWh consumed. They would not have allowed customers to have their retail generation (expressed in kWh) offset by the electricity generated by the solar customer. Finally, they would accomplish all of this through a discriminatory rate that applied only to net metered customers and would credit them what they determined was the “energy value” of their generation, not the generation (kWh) itself.

Could it be written more clearly? Certainly it could. Has it served its purpose for the last 15 years? Yes. Does everyone in the utility world know what net metering is and how it works? Yes. Would changing net metering to net billing violate the legislative intent of the statute? Absolutely.

Rather than continuing to fight net metering, SDCEA should embrace it. Every kWh they get from a solar generator is a kWh they do not need to buy from Tristate, it’s a kWh that is generated locally and installed with local labor, and it is a kWh that does not contribute to pollution.

Is there the possibility that distributed solar can impact their utility operations? Certainly not at the current level of penetration - less than 1% - but when they start to approach 10% - sure. We can look at it and make any adjustments that are necessary. But until then - no, there is not an adverse impact to revenues, to their ability to manage the utility system or to customers that do not have solar.