Judge Recommends Consumers’ Energy Conduct a New Value of Solar Study

Clean energy intervenors applaud Proposal for Decision

Lansing, MI  — Administrative Law Judge Sally Wallace issued her Proposal for Decision in the Consumers Energy rate case Thursday calling on the Michigan Public Service Commission (MPSC) to conduct a study of the fair Value of Solar energy that customer-owned systems provide to the grid. The Proposal for Decision also includes a clear recommendation to maintain the status quo  — solar customers sell their excess solar power at the same price as the power they buy from Consumers Energy — until that Value of Solar is determined. These recommendations support the testimony clean energy intervenors submitted this summer. Consumers Energy is proposing a new price for all solar energy that local producers, including families and small businesses, send to the grid.

“We are encouraged by Judge Wallace’s ruling, which makes it clear that Consumers Energy must do its homework and treat solar customers fairly,” said Environmental Law & Policy Center Staff Attorney Nikhil Vijaykar.

This is the first rate case for Consumers Energy since the legislature directed the MPSC and utilities to come up with a cost-based replacement of the popular net metering program in 2016. The current net metering program is a compensation structure for solar customers where energy they send to the grid is credited against their usage 1:1 over a set period of time. DTE Energy implemented a new rate structure for solar customers in 2018 to replace net metering.

Consumers Energy is proposing to compensate solar producers 46% less than what it charges the same customers for electricity. The Company’s proposed compensation is also 65% lower than the compensation rate calculated by Kevin Lucas at the Solar Energy Industries Association, who used the Company’s own Cost of Service Study. Testimony from energy expert Karl Rábago of Rábago Energy, LLC, found that Consumers’ proposal is not based on real costs, and undervalues solar’s many benefits to the grid.

“A Value of Solar study will help Michigan families take control of their energy future and make sound investments in solar,” said Will Kenworthy, Regulatory Director at Vote Solar. “Determining a fair and accurate value for the many benefits that rooftop solar provides is critical to achieving Michigan’s clean energy goals and protecting clean air and water.”

MPSC’s Value of Solar study could impact rates for all customers, not just those in Consumers’ territory. Without the study, every utility must come up with its own system for deciding the value of solar and go through the rate making process. The final decision in this case, expected in December 2020, will impact all new solar customers and any existing solar customers once their system reaches 10 years of age.

“The robust Value of Solar study in Judge Wallace’s recommendation would facilitate energy planning processes across the state,” said Ronny Sandoval, ROS Energy Strategies. “Customers would benefit not only from smarter future investments, but also from a more efficient use of the existing grid.”

The group of clean energy intervenors, called the Joint Clean Energy Organizations (JCEO) consists of: the Ecology Center, the Environmental Law & Policy Center, the Great Lakes Renewable Energy Association, the Solar Energy Industries Association, and Vote Solar.