Dive Brief:
- Iowa’s Pella Cooperative Electric informed its 12 members who own distributed generation (DG) that their facilities fee, the fixed charge all of the co-op member-customers’ monthly bills, will triple from $27.50 per month to $85 per month beginning in 2020.
- Electricity suppliers across the U.S. have been increasingly imposing higher fixed charges on owners of DG to cover revenue losses incurred from diminished electricity sales. The Pella increase is thought to be one of the biggest yet imposed nationwide. Wisconsin’s Rock Energy Cooperative just added a $22.60 per kW fixed charge on DG owners, which would be approximately $90 a month for a typical rooftop array.
- Pella DG owners are seeking legal representation and say the charge violates Iowa Code 476.21, which prohibits “discriminatory rates or charges for any service or commodity” imposed on customers who use renewables.
Dive Insight:
A confidential Pella study found the fixed fees now paid by its DG owners fall $57.50 per month short of their share of the costs their systems impose on the cooperative’s transmission and distribution system, according to CEO John Smith.
An increased emphasis on fixed charges may seem logical to utilities that are legally entitled to fair compensation for services they provide, Tong and Wellinghoff recently wrote in Utility Dive. Grid connected customers should pay for the services they get. But “the assertion that solar customers do not pay their fair share is based on a flawed assumption that cost shifters are necessarily freeloaders,” the duo argued.
Fights over net metering, fixed charges, and third party ownership (TPO) have made recent headlines in other states but the battle lines are also drawn in Iowa. Alliant Energy and MidAmerican Energy, two of the state’s dominant electricity providers, recently refused to net meter solar installations financed in TPO arrangements, challenging a 2014 Iowa Supreme Court decision.
