For private solar energy producers, Wallace’s order was a mixed bag. Solar power supporters had asked the commission and court to eliminate the solar access fee and maintain higher, retail rates paid to solar power producers for excess electricity they put back on the grid.
Wallace recommended against DTE’s proposed system access fee, which would have charged solar producers an average of $12.50 per month, or about $150 annually, for use of the utility grid.
But Wallace’s recommended order also would lower the rate the solar producers are currently paid for excess electricity provided back to DTE and the grid. Currently, solar producers are paid retail rates, about 13 to 14 cents per kilowatt hour.
DTE’s proposal would have lowered those rates to about 2 to 4 cents per kwh. Wallace adopted MPSC’s staff recommendation of about 8 to 9 cents per kwh.
Under the state’s 2016 energy law and MPSC regulations, the new solar excess electricity rates, if approved by the commission, would apply only to new solar customers. The current 3,100-plus solar producers are grandfathered in with the old retail rates for the next 10 years.
DTE, Consumers Energy Co. and other utilities maintain that the solar customers, which have been covered under an old state program called “net metering,” are subsidized by other ratepayers for using the grid. Solar advocates dispute that contention.
DTE argues that the solar access charge is cost-based, and it is required because “utility infrastructure costs would remain unrecovered and be shifted onto the remaining traditional customers without the additional SAC charge.”
Becky Stanfield, senior director for Midwest states at Vote Solar, a nonprofit solar advocacy group, expressed disappointment that the judge didn’t maintain higher rates.
“DTE’s proposal to charge solar customers a punitive monthly fee was unfair and did not comport with the law,” Stanfield said in a statement. “We’re glad Judge Wallace recognized that fact and rejected DTE’s attempt to impose arbitrary fees on its customers. At the same time, we’re disappointed that the recommended order would only partially credit solar customers for the full value their solar provides to the grid.”
Stanfield said DTE’s proposed rate program would cost the average residential solar customer $500 a year, including the grid charge of about $150 annually.
Solar advocates have argued that solar energy producers should receive retail rates for power they sell because they produce the power at peak times, when electricity is most expensive for all customers, and return the excess electricity to the grid, where it is then purchased at retail rates by other customers.
Overall, Wallace’s solar rate order is a compromise between what DTE wanted at 2 to 4 cents per kwh and the 12 to 13 cents per kwh currently paid to solar producers. The net effect would cut payments by about $175 per year rather than about $350 annually, according to a Crain’s analysis of figures in Wallace’s order.
Solar and environmental advocates also contend that utilities benefit from solar producers because the companies use less coal and natural gas to generate electricity, which lowers carbon emissions and harmful effects to public health and the environment.
Overall, Wallace’s solar rate order is a compromise between what DTE wanted at 2-4 cents per kwh and the 12-13 cents per kwh currently paid to solar producers. The net effect will cut payments by about $175 per year rather than about $350 annually, according to a Crain’s analysis of Wallace’s order.