Pella Electric Cooperative drops discriminatory charge for solar users

The Pella Electric Cooperative has told the Iowa Utilities Board it will no longer seek to charge some customers using solar panels a much higher “facilities fee,” Karen Uhlenhuth reported today for Midwest Energy News. The rural electric cooperative had informed members in June that customers installing new solar panels after August 15 would be charged a monthly fee of $85, which is $57.50 higher than what most of the Pella Electric customers pay. Those who had already installed solar systems would be exempt from the higher fee for five years, but would have to start paying it in 2020.

The cooperative’s action provoked an outcry from renewable energy advocates as well as from the handful of Pella Electric customers who would have been immediately affected. Uhlenhuth noted that the non-profit Environmental Law & Policy Center intervened with the Iowa Utilities Board, saying “a fee levied only on customers with distributed generation facilities ran counter to two provisions in Iowa law.” The Office of Consumer Advocate (part of the Iowa Attorney General’s office) asked the cooperative to provide data supporting a much higher monthly fee for solar users. The cooperative had refused to release its “cost of service” study last month.

To all appearances, the coop backed down once leaders realized they were on shaky legal ground, much like Alliant Energy reversed its position on net metering for some solar projects, shortly after critics had intervened with the utilities board. Uhlenhuth quoted a statement released by the Pella cooperative, which sounds like an unconvincing attempt to save face. The coop’s chief executive officer John Smith claimed it is “incorrect” to depict the higher facilities fee as “discriminatory.” He is sticking to his story that charging solar users more was merely an effort to be “fair” to other customers. While not admitting that the cooperative was wrong, the statement said it is withdrawing the proposal “until such time that we can better educate our members and the community as to the fair and equitable recovery of fixed costs.”

A press release from the Environmental Law & Policy Center, which I enclose in full below, notes that the Pella cooperative already benefits from solar panels installed by its customers, because it “buys excess solar energy at a rock bottom price” of 3.3 cents per kilowatt-hour and “sells it at a premium” price of 10.1 cents per kWh. (I’m an active supporter of the ELPC, but I have no role in drafting their public statements or legal strategy.)

August 27 press release from the Environmental Law & Policy Center:

Pella Electric Coop Reversal on Solar Charge Good News for Coop Members

It’s Time for an Open, Data-Driven Discussion on Benefits of Solar to Coops

DES MOINES, Iowa – Late Thursday the Pella Electric Cooperative withdrew a controversial proposal which would have hit members with solar panels with an exorbitant fixed charge of $85 month. The news was welcomed by members of the co-op, and underscores the need for an open discussion about the role solar will play in the coops energy future.

“Families and businesses that have joined institutions like Central College in cutting energy costs and bringing us closer to energy independence with solar will not be punished for making a choice that is better for budgets and for the environment,” said Bryce Engbers, a Pella Electric Coop member and pork producer who has solar panels.

Mike Lubberden, another solar Pella member commended the move, but added that the coop should alter the way it looks at solar.

“This would have been the most extreme anti-solar, anti-renewable energy fee anywhere in the country,” Lubberden said. “Pella Electric Cooperative Association should permanently drop this proposal, and instead take an approach that captures the value of solar energy for all coop members.”

Josh Mandelbaum of the Environmental Law & Policy Center expressed hope that Pella Electric Cooperative’s withdrawal of the flawed proposal was an indication that the coop has reevaluated its approach. “There are better ways to prepare for the energy future than imposing punitive and unjustified fees on members who are leading the way on renewable energy. We look forward to working with the Pella Electric Cooperative to identify ways to bring the benefits of solar to all of the coop’s members.”

Mandelbaum pointed to the fact that solar now creates revenue for the coop. Currently, Pella buys excess solar energy at a rock bottom price and sells it at a premium any time the member’s system produces more energy than the member uses. The coop pays 3.3 cents per kilowatt-hour for excess solar and sells it for 10.1 cents. The member who installs solar has paid all the costs to do so, and the coop keeps nearly 7 cents on every unit of excess energy.

Nathaniel Baer, Energy Program Director of Iowa Environmental Council also lauded the decision to drop the solar charge. “This proposal was never supported by data showing it was needed, in fact, we are confident that solar is bringing value to the coop. We hope that this opens the door to a larger discussion of how we can bring more solar to rural electric coops across the state.”

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  • "the fair and equitable recovery of fixed costs"

    would be to charge the same facilities fee to all customers.

    • exactly

      Not only that, Iowa Code 476.21 says,

      A municipality, corporation or co-operative association providing

          electrical or gas service shall not consider the use of renewable

          energy sources by a customer as a basis for establishing

          discriminatory rates or charges for any service or commodity sold to

          the customer or discontinue services or subject the customer to any

          other prejudice or disadvantage based on the customer’s use or

          intended use of renewable energy sources.