Rocky Mountain Power, other parties defend plan to raise Utah power bills to pay for solar power

Utility says it could walk away from settlement, if state regulators seek to change its carefully negotiated deal with solar advocates.

(Rick Egan | Tribune file photo) Residential solar panels installed on the Wasatch Front in 2014.

State regulators have the future of Utah’s solar power industry in their hands — and, possibly, the future of your household electric bill — after a brief Monday hearing.

In public testimony early Monday, a representative of Rocky Mountain Power warned it could walk away from a long-sought settlement some believe could save the state’s growing solar industry — if the Public Service Commission changed key terms of the agreement. 

“Adopting any of the proposed modifications would compromise the integrity of the [settlement], and the diligent effort of the signing parties to reach this agreement,” said Joelle Steward, the company’s director of rates and regulatory affairs.

She urged the commission to accept the proposal without changes.  The meeting adjourned after just 90 minutes of discussion to allow the Public Service Commission to deliberate.

Commission chairman Thad LeVar said he recognized the significant effort that went into crafting the settlement, but also acknowledged concerns with specific terms of the deal. The commission, LeVar said, would decide in a “reasonable” amount of time whether Rocky Mountain Power will be allowed to implement the agreement.

Solar industry leaders, environmental advocates, and key state agencies worked for nine months to develop a mutually agreeable alternative to the utility’s original proposal. That plan, unveiled last fall, would have created a controversial three-part rate structure for residences with rooftop solar, and had the potential to substantially increase some customers’ monthly bills.

Instead, the current settlement proposes to close Rocky Mountain Power’s net metering program come November, making new customers ineligible for a previous system of reimbursements for excess power generated by rooftop solar panels.

In that program’s place, Utah’s largest electric utility — which says it overpays for the surplus power compared to market rates — wants to create a new system of fixed-rate credits  for future solar customers, paid for with cash it raises from adding small surcharges to Utah customers’ electric bills.

Those charges would pass through the company’s Energy Balancing Account, which regulators typically let Rocky Mountain Power use to recover unexpected costs, such as increases in fuel for its power plants, without raising base electric rates.

But in testimony on Monday, opponents of the deal argued to regulators that permitting those charges through the Energy Balancing Account could generate millions of dollars of additional cash for Rocky Mountain Power when there is no proof the utility needs the revenue to cover costs.

Western Resource Advocates, an environmental advocacy group, is one of three organizations openly opposing the solar settlement, along with the Utah Association of Energy Users, representing commercial electric customers, and Vote Solar, a clean-energy advocacy group.

Steven Michel, chief of policy development for Western Resource Advocates, urged the Public Service Commission to deny the company’s charge request pending a thorough study of the company’s financials. He also expressed concern the charges could be used to fuel animosity toward Utah’s solar industry.

“This explicit recovery of unjustified revenues will be understood to quantify the subsidy to rooftop solar,” he said.

But Steward said the charges would not increase the company’s revenues.

The Rocky Mountain Power official indicated that company was willing to discuss the possibility of using an alternative source — expired rooftop solar credits — to fund the account. Those credits expire annually if they are not used on customers’ electric bills and now go to help low-income customers. 

The Public Service Commission also asked if Rocky Mountain Power would be willing to consider creating a special account to handle the solar charges, instead of using the Energy Balancing Account.  

Michele Beck, director of the Utah Office of Consumer Services, said the commission’s idea was “interesting,” but she urged the commission to consider it in a separate hearing.

The Office of Consumer Services was one of many parties that helped to negotiate, and ultimately signed on to, the settlement.  If the deal were altered, Beck raised concerns that some parties might not have adequate opportunity to weigh in.

“I would not prefer that outcome,” she said.