A Kansas Corporation Commission final order issued Thursday was a “real loss” for residential wind and solar users, an energy activist said, expressing dissatisfaction at the commission’s lack of willingness to engage in a substantive study of how distributed generation users affect the power grid.
“We do feel like it was a real loss,” said Dorothy Barnett, executive director of the climate + energy project, based in Hutchinson. “But I will say, we are not giving up.”
The KCC ruling laid out guidance regarding how utility companies can charge distributed generation customers, closing a general investigation opened in July 2016. Distributed generation is the term used to describe customers who can self-produce energy in small amounts to reduce their monthly energy bills.
On one side of the issue were utilities that say customers who get the bulk of their energy from residential wind or solar platforms aren’t paying their fair share of the fixed costs of the power grid. The companies want to set up a fee schedule that takes into account how DG customers use the grid, even as their solar or wind production reduces their energy consumption.
On the other side are energy advocates and solar/wind companies that say they want the utility companies to demonstrate exactly what the fixed costs are that they’re not covering, and asking for an in-depth review of the costs and benefits that distributed generation users bring to the grid.
The final order doesn’t change what solar and wind residential customers will be paying, but it opens the way for utility companies to set up a different rate class and propose new rate design for DG customers. Utility companies will be able to ask to set up those new rate classes during their regular rate cases.
“The KCC’s order today is another step in the process just to set up so that the rates our customers are paying reflect the way they use the power grid,” said Gina Penzig, Westar Energy spokeswoman.
Penzig said Westar currently has 650 customers using private generation.
While that number isn’t significant compared to how many customers Westar services, Penzig said it was important to the company that the KCC make a determination on the rate issue so that customers adding distributed generation understand the economics of their choice and that they aren’t trying to make the decision when thousands are already using DG.
Westar utility bills are structured so that customers pay about 15 to 20 percent of their bill for fixed costs, Penzig said, and the remainder of the bill is based on how much electricity is used.
Penzig confirmed that no rate changes will occur until the next rate case, planned in early 2018.