Iowa Consumer Advocate to Decide if DG Utility Accounts Are ‘Moochers’

by | Aug 5, 2015

Are ratepayers who have rooftop solar arrays mooching off their utilities? An Iowa utility says the answer is “yes” and it is threatening to impose a monthly $85 “facility charge” as of August 15 on owners of any newly connected distributed generation (DG) systems up to 25 kW unless the Iowa Office of Consumer Advocate (Utility) (OCA) intervenes.

The decision to ramp up fees is based on the results of a rate study conducted recently by Iowa’s Pella Cooperative Electric (PCE). According to the utility, the research found that “the facility charge for accounts that have distributed generation was not sufficient and did not fully cover the cost of providing service to these accounts,” according to a letter sent on June 18 to PCE’s 3,000 members by Member Relations Manager Stan Eysink.

The coop found that fixed fees now paid by its rooftop solar owners fall $57.50 per month short of their share of the system costs. To address this shortfall, it is effectively tripling the facility charge paid by accounts that do not have distributed generation. What’s more, PCE says that present owners of DG installations (about a dozen customers) will be charged the same, higher amount beginning in 2020.

But how did the study come to these conclusions? While PCE CEO John Smith has said that he will share the results of the hush-hush analysis with OCA, nobody outside the electric coop has seen it to date – and he has gone on record with his refusal to make it more accessible. Requests from the news media for copies of the report have been denied.

In addition, PCE did not comply with a request from OCA to receive the cost justification data by July 29. Instead, the electric cooperative asked for an extension.

Jennifer Easler, an attorney for OCA, told Retail Energy Buyer, “We gave them two more weeks, until August 12, to furnish the information.”

Easler told us she is anxious to see the documentation because, under Iowa law, “Utilities cannot discriminate against a renewable-energy user.” If her office determines that DG accounts are “being disadvantaged based on the customer’s use or intended use of renewable energy sources,” then the case will be referred to the Iowa Utilities Board for action. It could turn into a dispute that will be closely watched by other utilities nationwide, many of which think they are on the losing end of the distributed generation deal.

Also in the news: A case pending with the Kansas Corporation Commission could see new DG owners choosing between two higher-cost rate options that Westar Energy is hoping to have approved. Kansas electric customers have until August 11 to submit on-the-record comments to the Kansas Corporation Commission related to Westar’s proposed rate increase.

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