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Consumers blast NW Energy’s proposed rate change for rooftop solar systems

Posted: 5:29 PM, May 23, 2019
Updated: 2019-05-23 19:51:39-04

HELENA — Solar-power consumers and advocates lined up Thursday before the Public Service Commission, to denounce NorthWestern Energy’s proposed rate change for owners of new rooftop solar-power systems in Montana.

They said the proposed “demand charge” and rate change are not justified and would make these systems much more expensive to operate in Montana, undercutting the businesses that install them.

“I couldn’t think of a better way to kill this industry,” said Bradley Layton, an engineer who analyzes rooftop solar systems. “That almost seems like that’s what it’s designed to do. … If you approve this, you will decimate numerous small (businesses).”

Bradley Layton, Missoula

NorthWestern’s proposal for net-metered, rooftop solar systems is part of its general electric rate case, which is in the midst of a two-week hearing before the PSC.

The company initially asked for a $35 million-a-year increase in electric rates for its 374,000 Montana customers — a 7.4 percent increase.

But at the beginning of the hearing last week, NorthWestern and several parties in the case, including the Montana Consumer Counsel and large industrial customers, offered a settlement that would increase rates only $6.5 million a year, or 1.23 percent.

Under the proposed settlement, which the PSC will consider, residential consumers would see their electric rates go up about 70 cents per month, the company said.

The case is NorthWestern’s first electric rate case in almost 10 years.

Yet while the overall revenue for the company appears to be settled, the issue of the new rate for net-metered, solar-power systems is not.

Customers with a net-metered rooftop solar-power system use the power they generate and get a credit for any excess power, which flows back onto NorthWestern’s system. Right now, they get credit at the same retail price they would pay for power they get from NorthWestern.

NorthWestern is proposing to reduce the amount it pays and charges for that power by 40 percent, and to impose a “demand charge,” which is one-time charge based on customers’ peak power consumption. Solar-power advocates have said that charge could be anywhere from $50 to $75 a month.

The company says this new rate would accurately charge rooftop solar systems for the costs they impose on the overall system, instead of having other customers without solar-power systems essentially subsidize that cost.

The new rate would apply only to newly installed systems. Current systems would continue under the old rate.

Yet solar-power customers Thursday said this “grandfathering” of old systems appeared designed to mute criticism of the change — and that they would not be silenced.

“This new rate class and demand charge for solar-power customers are just fancy terms for punishment and unfair treatment,” said Joel Harris of Helena. “Montanans should have the freedom to continue developing renewable energy and not be singled out.”

Rick Lamplugh, Gardiner

Rick Lamplugh of Gardiner, who has a solar-power system on his home, said he doesn’t believe NorthWestern’s claim that these systems are hurting other customers or the company.

“Less than 1 percent of NorthWestern’s customers have solar,” he said. “Yet the company would have you believe that these customers are harming NorthWestern Energy’s financial health. That harm doesn’t show up in the company’s 2018 annual financial report.”

David Bender, an attorney representing Vote Solar, told the PSC on Wednesday that customers have a right to determine how to reduce their consumption, whether it’s by turning off the lights or expensive appliances or installing a net-metered solar system.

David Bender, attorney for Vote Solar

“Customers who reduce their electricity consumption cannot be treated differently, depending on whether those deductions come from self-generation, or the many other reasons people control their consumption,” he said.

Layton and others who testified said with the new demand charge, solar-power systems, which have become more and more affordable, would never be able to offset the cost of their installation.

“It’s exactly designed to kill small solar businesses,” said Matt Treaster of Butte. “And some of these businesses have been operating in Montana for 25 years.”