Standing Room Only as CO Net Metering Review Kicks Off

Earlier this year Colorado utility regulators rejected a proposal from Xcel Energy to weaken the state’s solar net metering program outright, instead calling for an open stakeholder discussion before making such an important decision about the future of the successful rooftop solar program. The decision was a big win for public engagement . . . and that same public showed up in droves yesterday to reinforce their support for rooftop solar as the new process kicked off.

The Commission held the first of a series of three panels that will look at the impacts of net metering in Colorado. More than one hundred enthusiastic Colorado solar supporters packed the PUC building, spilling over into two overflow rooms. In front of the crowd, representatives of the Colorado arm of Xcel Energy, the solar industry, and the cooperative utility trade association made technical presentations about the costs of residential net metering as well as the growth of the solar industry to date and prospects for the future.

By way of background, net metering, which is the primary policy driver of rooftop solar in 43 states, is a simple and proven state policy tool for supporting self-generation. It allows customers to first meet their own electricity needs and then receive full retail bill credit on their utility bill for any excess electricity sent back to the grid. By our calculation, the benefits of this private investment in local, clean, reliable power generation outweigh the costs by $13.6 million annually. But Xcel, in a thinly veiled attempt to make it harder for Coloradans to go solar, paints an alternative view wherein those customers aren’t paying their fair share.

In the words of the PUC Chairman, through yesterday’s discussion he hoped to “narrow the disagreement” on the cost estimates between the two sides. In good news, we believe that strong progress was made on this point. The discussion showed that utilities and solar stakeholders do not differ hugely on their view of net metering program costs. Although, one area of disagreement worth noting is that the solar industry recommends excluding the customer’s self-consumption behind the meter from the cost calculation. We strongly agree. At Vote Solar we are committed to customers’ PURPA-backed right to generate their own electricity to meet their own on-site energy needs. Whatever happens on the customer side of the meter – whether it’s reducing energy consumption or producing their own solar power – is up to the customer. And because that non-exported power never touches the utility grid, it simply should not be part of the cost calculation.

The solar representatives also made the point that because the typical residential solar customer is larger than the average residential customer, the solar customer continues to contribute to the cost recovery by the utility. Tom Beach, speaking on behalf of solar stakeholders, said, “they go from being a larger than average consumer before solar to a less than average consumer after solar.” In other words, solar customers continue to purchase nearly as much energy from the grid as the average residential customer, thus paying their fair share of the utility’s costs.

All in all, we think it was a positive start to a constructive, fact-based discussion that should help inform good decision-making by leaders at the Commission. The next meeting will be in September and will address the benefits side of the cost/benefit equation, the area where all parties expect the contrast between utilities and industry to be more stark. We urge the Commission to continue to maintain open minds and to think comprehensively about the very real benefits that distributed solar generation across all customer types brings to Colorado ratepayers. The fact of the matter is that private solar investment saves the rest of Xcel’s customers’ money in many ways. It reduces the need for the utility to build expensive conventional power plants and transmission infrastructure over time. It reduces the amount of electricity lost in the delivery process by generating power right where it’s needed. And it reduces the cost of meeting Colorado’s clean energy goals. And that’s all before we account for the societal benefits of a growing local solar economy.

For the first time in a century, there’s real business model innovation happening in the electricity sector. The old utility approach to valuing centralized generation will simply not fly in this new solar-powered, consumer-driven energy marketplace. We hope the Commission uses this process as an opportunity to update those old approaches and lead the state toward the clean, reliable, participatory energy landscape that Coloradans want.