KPUD public workshop on discouraging solar power

This is Klickitat PUD’s final public workshop regarding their proposal to reimburse distributed energy generators at their wholesale rate instead of the retail rate (standard net metering). KPUD asserts that intermittent power generation is less valuable to them than their firmed-up power supply; and the value to customers doesn’t matter. Anyone currently on net metering or those wishing to invest in renewable energy generation should attend.

History: After poorly publicized customer workshops were held on December 5th and 6th, an open public period was also held at the January 9th Commission meeting. On February 2, the Commission finally sent their proposed new “comprehensive net metering policy” to attendees of the previous workshops; this was the first description of the problem as they see it. Their statement of the problem is:

• “With current rate design, a Net Metering customer gets credited back the entire retail consumption rate, including the revenue necessary to maintain the infrastructure and cover other KPUD costs incurred to serve them.
• “As a result, KPUD is considering implementing changes to our rate design so that the necessary costs are collected and that Net Metered customers are not subsidized by other customer rate classes.
• “The actual value to KPUD is the avoided power cost, or what we do not have to purchase.
• “An intermittent generator cannot guarantee power at peak times so does not reduce the system infrastructure. We still need the same amount of “capacity” for those peak times.
• “Intermittent generation does not support system stability, it actually makes it more difficult to operate as other generation sources must be adjusted to account for the unpredictability.
• “Solar and wind does provide zero carbon energy, but not capacity.”

KPUD needs to understand their services from their customer’s perspective. Ignoring Marketing 101, their emphasis here is on the value to KPUD, not the value to customers. As solar and batteries get cheaper, KPUD’s larger customers will simply use their locally generated and stored power instead of KPUD power. This may be in the form of customers going off grid, or more likely just using their own power to offset KPUD power when available. That will have the same effect on KPUD revenue as net metering (reimbursement at the retail rate), plus the customer benefit of backup power for KPUD outages. Trying to thusly compete with distributed generation and storage is a losing battle, since distributed PV costs and storage costs are both falling about 10% per year. It’s only a matter of time before such policy creates a classic utility death spiral.

Utilities everywhere are grappling with this problem, and creating innovative new programs to embrace distributed energy resources for increased reliability and resilience and lower costs.

KPUD seems content with telling customers that they’re going to cut the promised reimbursement rate and customers can take it or leave it. Similar avoided cost rate solar net metering fee structures have resulted in very few solar electric installations in Wasco REA, Columbia Basin Electric Co-Op, Umatilla Electric Cooperative and other utilities where it is used. This has effectively shut down the financial feasibility of solar and adoption of clean renewable energy for their electric customers. Shutting down solar seems to be the clear intent of KPUD’s proposed policy.

Come and make your voice heard!

Wednesday February 7th at 6:00 PM. Klickitat PUD Meeting Room,
1313 S Columbus Ave, Goldendale WA