By KIRSTEN LASKEY
Los Alamos Daily Post
kirsten@ladailypost.com
The Los Alamos Board of Public Utilities (BPU) passed a motion 4-1 to approve the proposed changes to Rule E-5, which covers interconnection with cogeneration and small power producers, during its regular meeting May 15.
The changes to the rule immediately take effect.
This was not a popular decision for those Department of Public Utilities (DPU) customers who will be affected by these changes – mainly those who installed rooftop solar power systems on their homes. A number of these customers attended the meeting to voice their opposition to the change. They were not the only ones; BPU Board Member Matt Heavner opposed the motion.
Deputy Utilities Manager Karen Kendall explained the change in this rule.
The change, she said, impacts the credit for energy homeowners with solar power systems supply to the utility department. The credit will now be based on the wholesale cost rather than retail rate. The wholesale cost is the utility’s electric coordination agreement (ECA) total capacity and energy costs, for a 12-month rolling average, calculated from the Los Alamos County Resource Pool invoices, Kendall said.
“The change in terms of the wholesale cost in the rule said, ‘for the prior year’,” she said. “We felt the 12-month rolling average was fairer to people because then you are getting the benefit of the most recent increases or decreases of that wholesale cost.”
There are three components of solar production, Kendall said. First is the daily consumption. Power goes to a home and is immediately consumed by the appliances that are turned on. DPU does not have the ability to meter solar energy that is used directly in the home. The second component is any excess power that isn’t used in the home is provided to DPU. She explained the unused power delivered to DPU is metered and is calculated as a negative meter read. The final component occurs when not enough solar energy is generated to power the home. At that point, metered energy is purchased from DPU.
Kendall reported that 452 DPU customers have solar power systems in their homes. Of that number, 125 or 27 percent supply more energy to DPU than they take from the utility department annually.
Under the new change, an example of an electric bill would be something like this: if the home generated 182 kWh of solar energy and also used 149 kWh of energy from DPU, then the charge would be $19.10, plus a $12 service fee; however, $13.43 would be credited for the solar power generated, making the final amount owed $17.67.
The difference between the newly approved change and previous rate is about 5 cents per kWh. Under the new rule, solar power customers receive a smaller credit.
When asked why customers were not always being billed the wholesale cost rather than retail, Kendall said when solar power was first implemented, DPU was on a different billing system. There wasn’t the ability to have more than one rate. The retail rate was used because it was the only one that could be used. As a result, DPU would take the difference between what the customer provided to DPU and what DPU sold to the customer, and if the customer had produced more, then DPU charged the customer the difference between the retail rate and the wholesale cost.
It was a mistake that DPU is now trying to correct.
By making the change, DPU’s billing is more equitable for all its customers, according to agenda documents. The existing rule language was unclear, easily open to multiple interpretations and was unfair to non-solar customers, Kendall said, adding that when DPU reviewed the rule along with the County legal department, it was determined that incorrectly using the retail rate to calculate the monthly credit violated the anti-donation rules. The rule was corrected for cost of service so that one customer is not subsidizing another and this revised rule is now in compliance with anti-donation rules.
Kendall explained to the Los Alamos Daily Post that the revised rule is more equitable because the wholesale cost is what DPU pays for purchase power delivered to the distribution system.
The wholesale cost includes power purchases, transmission charges and other demand costs, she said. The equity issue arises because continuing to incorrectly credit the solar customers at the retail rate means those customers are not paying for the distribution operational costs.
The operational costs include electric distribution system repair and replacement, line personnel, equipment, transformers and distribution energy losses. The operating costs are incurred to deliver energy to all customers.
If a solar customer is connected to Los Alamos County electric distribution system, then they are benefiting from having power available after the sun goes down and should pay for their share of the operating costs, Kendall said.
She further added that DPU is not clawing back past over-payments to solar customers due to the credit being calculated using the retail rate rather than the wholesale costs or due to the annual true-up not being performed since 2019.
DPU customers who spoke during public comment didn’t see it that way. Several expressed frustration that it seemed they were being penalized for DPU’s mistake. Others noted the change set a bad precedent; it would dissuade people from installing solar power and decreasing the County’s carbon footprint.
One DPU customer who has solar power at his residence said, “The solution to making residential solar practical is net metering, not net billing. Net metering on an annual basis is what solar residents signed up for … and what we based our investments on. A rolling annual average is fairest to the customer …”
Two DPU customers who do not have solar power installations supported the change.
One of these customers said, “It seems to me … the County has to pay wholesale price when it buys power especially if we have more and more people installing solar on the rooftops and if the County is buying power from them at retail price, the public utility is going to go bankrupt.”
While several board members expressed sympathies to DPU customers who made the financial decision to install solar power systems based on the utility department’s mistake, they still supported the change.
BPU Board member Charles Nakhleh noted that in terms of public engagement, “… I will say there are about 450 PV customers, there are about 9,600 total customers … we haven’t heard from about 9,100 people,” he said. “Their views also count whether expressed or not.”
Nakhleh added that DPU never intended to use retail rate for solar power. He added that to eliminate carbon emissions in the County, industrial scale renewable rather than rooftop solar is the way to go.
Heavner expressed hesitation for approving the change May 15; he argued more engagement and communication with the public was needed for this issue.
“… We need to clarify this … improve engagement, communication, deliberation and continue education of ourselves and the entire community…,” he said.
BPU Board member Steve Tobin did motion to table approving the change, but it failed to pass 3-2.
In his opening remarks on the issue, Chair Robert Gibson echoed the sentiment that more clarity was needed.
“I hope whatever we decide to do … whatever we come out with is clear so we all can have the same understanding of what the rule is,” he said.
