Dive Brief:
- Oklahoma Gas and Electric (OG&E) is considering asking Oklahoma regulators to impose a monthly demand charge on customers who use distributed generation. The Oklahoman reports the announcement comes as part of the implementation of Oklahoma’s Senate Bill 1456, which allows regulated utilities to propose a new customer class and charges for distributed generation (DG) such as rooftop solar or small wind.
- The state’s dominant electricity provider may also ask the Oklahoma Corporation Commission (OCC) to approve an increase in all users’ monthly service charge in proceedings expected to be decided by the end of 2015.
- Because the new charges did not apply to DG installed before November 1, 2014, there was a flurry of activity through last weekend and new concern that installation in Oklahoma will drop off significantly until final policies and rates are established through OCC proceedings.
Dive Insight:
OG&E, which has less than 170 residential customers with DG, will bring proposals as part of its 2015 general rate case. Public Service of Oklahoma will file for consideration of DG charges as a separate regulatory proceeding.
OG&E said it is studying customer usage data and raised the fairness rationale for rate changes, suggesting that non-DG-owning customers may have to pay inequitably for grid maintenance if DG owners’ lowered bills allow them to avoid infrastructure charges. OG&E and other U.S. utilities say DG owners use the grid when the sun isn’t shining or the wind isn’t blowing and should therefore help pay for its maintenance.
In a debate regulators must settle, OG&E said a higher monthly fixed charge and a lower variable per-kilowatt-hour rate would be fairer for all customers while DG advocates say such rate changes are unnecessary because DG adds more benefits than costs.
