Distributed Energy Resources

Activity tied to DG customer fees starts to pick up, report says

Activity related to additional fees and new billing mechanisms, such as demand charges, for distributed generation (DG), is starting to ramp up after slowing down in 2017 and early 2018, according to a report released by the NC Clean Energy Technology Center on Oct. 24.

In the third quarter of 2018, three utilities – Michigan’s DTE Energy and Upper Peninsula Power, along with Montana’s NorthWestern Energy -- proposed additional fees for DG customers, while regulators in Kansas approved Westar Energy’s proposed demand charge for residential DG customers, the report, “The 50 States of Solar,” said.

In West Virginia, proposed revisions to the state’s net metering rules “potentially open the door to additional fees by allowing charges for the ‘incremental cost of interconnection’ of customer-generators,” NC Clean Energy Technology Center said.

The report notes that in Massachusetts, a demand charge approved earlier in 2018 was overturned by legislation enacted in Q3 2018, but the measure only sets new requirements for the design of demand charges and does not disallow them.

Convergence on locational value

Meanwhile, the report said that distribution system planning and solar compensation discussions are growing closer together, “as states look to grid planning processes to provide greater information on the locational value that distributed energy resources (DERs) provide.”

Looking at state-level activity, the report notes that the Public Utilities Commission of Nevada approved distributed resource planning rules in the third quarter of 2018, requiring an evaluation of the locational benefits and costs of DERs.

Proposed distribution system planning rules in Missouri and Washington both consider the locational value of DERs, with Washington’s draft rules explicitly calling for tariffs and rate designs that compensate customers for the value of their DERs.

In New England, the New Hampshire Public Utilities Commission is planning to conduct a distribution locational value study to inform net metering successor discussions, according to the report, while in Illinois, a draft working group report addresses the use of integrated distribution planning to identify the locational value of DERs.

NC Clean Energy Technology Center also reported that several states and utilities are considering whether the customer or the utility should bear the cost of installing additional meters, such as a bidirectional meter for net metering or a separate production meter.

Proposed net metering rule revisions in West Virginia would alter the financial responsibility for a bidirectional meter from the utility to the customer

“Meanwhile, a settlement in Duquesne Light Company’s general rate case in Pennsylvania requires the installation of production meters for new net metering customers, to be paid for by the utility,” the report said.

In the West, an Arizona decision approves a monthly meter fee for DG customers of Tucson Electric Power and UNS Electric, while in New England, Maine regulators recently determined that customers are not responsible for the cost of the production meter necessary to comply with the state’s new DG compensation rules.

Distributed solar policy action in Q3

The report found that 45 states and the District of Columbia took some type of distributed solar policy action during the third quarter of 2018, with the greatest number of actions relating to net metering policies, residential fixed charge or minimum bill increases, and community solar policies.

A total of 157 distributed solar policy actions were taken during the third quarter, with the greatest number of actions taken in Arizona, California, New York, Illinois, Massachusetts, Michigan, Montana, and Virginia.