Oklahoma utility pushes demand charge for DG users

Dive Brief:

State regulators could vote today on a proposal by Oklahoma Gas and Electric Co. (OG&E) to charge a different rate for distributed generation customers. A demand charge on rooftop solar customers could be between $16 and $21, The Oklahoman reports.
But if the new charges are approved, they may still be temporary. Last year, an administrative law judge recommended the Oklahoma Corportation Commission (OCC) approve the new rates but also direct the utility to submit additional information on distributed resource costs in a full rate case.
Hearings in that rate case will begin May 3, where OG&E seeks more than $90 million in base increases.
The utility only has a few hundred distributed generation customers in its territory, but is anticipating strong growth. Renewables advocates are urging the OCC to reject the new charges.

Dive Insight:

Oklahoma is joining a growing list of states undergoing debates over how to compensate distributed generation.

Although OG&E has just under 350 customers with rooftop solar in its service territory of 800,000, the utility says it is preparing for rapid growth and wants to avoid cross subsidies. The rates being considered today were proposed under a law passed in 2014, which allows for DG tariffs where subsidies exist.

An ALJ last year recommended the new rates be approved on a temporary basis, with more information to be considered in the base rate case set to kick off in May. But solar advocates say the commission should wait until it has more information to make any decisions.

“OG&E’s anti-solar proposal in the distributed generation docket is duplicative because the utility is suggesting the same punitive fees and charges in its open rate case,” Susan Glick, spokeswoman for The Alliance for Solar Choice (TASC), told The Oklahoman.

The proposed new rates would add a demand charge to the bills of distributed generation owners, which already include an energy charge, a fuel charge, and a customer charge. The demand charge has been proposed at $2.68/kilowatt each month.