Back in April, I shared with you what was happening at the Pedernales Electric Cooperative. Its anti-solar policies, approved in December 2020, level a direct blow to both already-installed and future customer-owned solar in its service territory. These your-side-of-the-meter solar policies will transform PEC from being inarguably one of Texas’s most supportive distributed solar proponents to perhaps the most punitive. As the rural electric cooperative that serves more meters than any other U.S. co-op, and with 5,000 solar meters in 24 Texas counties, these anti-solar policies could have a profound effect on other Texas rural electric cooperatives.
A few years ago, I was touting PEC’s forward-thinking distributed solar policies. However, a recent PEC internal cost-of-service study concluded that PEC solar members are, on average, paying 17% less than it costs to provide them with electric service. Cost-of-service studies typically analyze a utility’s total costs to provide service to its customers and to allocate those costs. While cost-of-service studies are usually comprehensive documents, this PEC study is not. It is alarmingly thin on data and methodologies that prove its solar members aren’t paying their fair share. As importantly, nothing in the PEC study quantifies or even considers, the benefits of distributed solar to the cooperative and its members. The resulting proposed rate increases are intended to recapture “lost” revenue from its solar customers.
The proposed rates include new demand charges and time-of-use rates for PEC solar customers. Effective January 1, 2022, all residential solar members will be on time-of-use (TOU) rates. This complex rate structure charges customers more for using energy at certain times of the day and less at other times. And while TOU rates can have a positive effect on reducing customer use, it’s not always possible for everyone to control the timing of their energy use. PEC staff admits that increased bills are the intended purpose of this rate change. Further, for those solar customers, their solar energy production will be devalued resulting in reduced ROI for their solar investment.
The other rate increase is in the demand charges. Effective January 1, 2022, all current AND future solar members will see TWO different demand charges: 1) one based on usage during ERCOT’s Four Coincident Peak (4CP) periods which is the highest energy usage hours for the whole grid peak for each of the four summer months, and 2) one based on monthly peak use. Typically, commercial customers have demand charges. Undoubtedly confusing for residential customers, demand charges can also be notoriously difficult to control.
According to PEC, these new rate structures and demand charges are intended to cover grid costs, yet PEC refuses to apply the same rates to non-solar homeowners who might be either increasing or decreasing their grid use by other methods; i.e., plug-in electric vehicle or high-SEER heat pump. All PEC members drive those costs, not just its solar members.
Adding salt to the wound – a special charge for solar members that is not only unfair, it’s punitive.
Currently, if you’re a PEC member and you want to install solar, it will cost you $650 in upfront fees, as well as a non-refundable $250 application fee. By the way, you’ll pay that $250 fee, even if your request is denied. Live in Austin Energy’s service territory and you’ll only pay $310 for a residential solar permit. Live in Oncor service territory and the cost is $0.
In response to these punitive solar policies, TXSES is part of a coalition of stakeholders including Public Citizen, Clean Water Action, Sierra Club, Solar United Neighbors and Jolt, as well as unaffiliated PEC members, working to engage with PEC members and the board and increase awareness about these regressive policies. As a result, PEC scheduled three informative webinars for its members: May 27, June 14 and July 12 in an effort to increase member awareness of the issue. If you live in PEC’s service territory, there’s still one more informational zoom event on July 12. Sign up for the July 12 event. And tell your friends who live in any of PEC’s 24 counties to speak up in support of customer-generated solar.
Howard ‘Scot’ Arey is the Chair of TXSES. Scot is also owner of Solar CenTex, a solar installation company that designs and installs residential, commercial, farm and ranch, and small municipal solar projects.