Dive Brief:
- Ten Minnesota rural electric cooperatives have imposed fixed charges on solar owners, with ten more planning to do so within the next two months, according to the Minnesota Rural Electric Association (MREA), Midwest Energy News reports.
- At least two co-op members have filed cases with the Minnesota Public Utilities Commission protesting the charges, but a state law passed last year allows rural electric cooperatives to impose a fixed fee on arrays smaller than 40 kW.
- MREA argued co-ops need fixed charges to cover fixed costs for system infrastructure when revenue is lost because solar owners generate their own electricity, which can be as high as 4% of peak load.
Dive Insight:
Minnesota's rural electric co-ops are joining in the contentious nationwide debate over power providers levying fixed fees on solar users. Some MREA customers report fixed charges as high as $50 added on top of their monthly bill.
For Minnesota, MREA argues fixed costs are higher for rural utilities because they average only six members per mile of electricity line, therefore fewer customers can cover the fixed costs. Conversly, investor-owned utilities (IOUs) in more urban and suburban areas average 48 customers per mile of line, MREA claimed.
Xcel Energy, the state’s dominant IOU electricity provider, imposed a $10 per month fixed charge on all its customers, but didn't single out solar customers. Minnesota Power, the state’s second biggest IOU, imposes a monthly $2.55 co-generation fee for a 20 kW solar array.
Twenty-one utilities in 13 states proposed new or increased existing charges specific to rooftop solar customers in 2015, according to the a recent report from the North Carolina Clean Energy Technology Center. A $5 monthly fixed charge increase is “equivalent to an extra $1,500 in charges over a 25-year PV system lifetime," according to the review.
Because solar-only fixed charges would turn solar owners into a separate rate class, the “proposals generally faced organized opposition, and few have been approved by regulators,” the review reported.
