Utah regulators approve end of net metering, beginning of new deal for Rocky Mountain Power solar customers

Negotiated in private, the settlement approved Friday by state Public Service Commission will allow solar sales to continue in Utah, industry leaders say.<br>

(Rick Egan | Tribune file photo) Residential solar panels in Salt Lake City. State regulators announced Friday they had approved a settlement that lets Rocky Mountain Power phase out its current system for reimbursing solar array owners for the surplus electricity they generate, and replace it with one that lets the utility recoup some of its costs with surcharges on all Utahns’ power bills.

Advocates for solar power in Utah were catching their breath Friday after receiving word that state regulators have approved a settlement intended in part to preserve the viability of the state’s solar industry.

The settlement, approved unanimously by the state Public Service Commission on Friday, ends Rocky Mountain Power’s net metering program for reimbursing customers with solar panels for the surplus electricity they generate.

The new plan reduces the rate at which Rocky Mountain Power will pay customers for the excess energy the generate, but only slightly — and in exchange, the pact will allow the utility to recover some costs associated with those reimbursements by charging all Utah customers’ power bills.

The three-person Public Service Commission, responsible for overseeing utilities such as Rocky Mountain Power, did not make any modifications to the deal, negotiated privately by the utility and solar and consumer advocates. All involved had sought approval of the deal without changes, in part by including a provision that allowed them to walk away from the deal if it was not approved wholesale.

In its Friday order, the Public Service Commission said its approval had hinged in part on broad support for the settlement, which was also backed by many outside advocates, businesses and private citizens who spoke in its favor.

Public Service Commission Chairman Thad LeVar said he believed the deal was less likely to be challenged in court, given the diverse array of groups involved in its drafting.

“Our statutes encourage settlements,” LeVar said Friday, “and settlements are more durable than issues getting litigated.”

The environmental group Western Resource Advocates was among the settlement’s few opponents. Its members had argued against letting Rocky Mountain Power recover the cost of solar credits through fees on other customer’s electric bills, saying there there was no evidence the utility needed the additional revenue.

Steven Michel, the group’s chief of policy development, said Friday he was not surprised by the commissions’ decision.

“There was a lot of support for the agreement,” Michel said. “We had a different take on the merits of that settlement, so had it been our decision it would have been different.”

Nonetheless, Michel said Western Resource Advocates had no plans to appeal the commission’s decision, but will instead present their concerns to the Public Service Commission in future proceedings.

According to the terms of the settlement, Rocky Mountain Power must now bring a new case before the commission to analyze the actual value of electricity generated on residential rooftop arrays. While the settlement sets up a roughly 9-cent per kilowatt hour credit for customers’ surplus power, that rate is set to expire after a permanent credit is established. That case is expected to conclude by 2020.

In a statement, Rocky Mountain Power said it planned to “continue to work with the diverse group of stakeholders involved in the agreement to gradually wind down subsidies and move toward market-based pricing for rooftop solar customers.”

Michael Shea, a senior policy associate for HEAL Utah, said the Salt Lake City environmental advocacy group planned to introduce new methods for calculating the environmental value of solar panels, in order to support a larger customer credit for surplus solar power.

Shea said his and other groups involved would be closely engaged in future hearings “keeping a united front, and working to continue the growth of this amazing industry in the state of Utah.”

Ryan Evans, president of the Utah Solar Energy Association, representing the solar industry, agreed the settlement parties had established a “good working relationship” despite their differing perspectives.

“It took us a long time to get to a place where we were speaking the same language,” Evans said, but “we will be better off when we work to find a long-term solution for solar energy.”

Evans said the association would now work with Utah’s solar businesses to explain the settlement to them, while assuring the public that “solar is still an affordable and economical option for many Utahns.”

Rocky Mountain Power’s existing net-metering program will end on November 15 of this year, according to the settlement terms. Residents who apply to participate in that program will be guaranteed credits for their surplus power worth approximately 10 cents per kilowatt hour through 2035.

“If you’ve been looking at solar,” Evans said, “before November 15 is certainly the best time to at least get your paperwork in.”