The Kansas Supreme Court ruled solar fees illegal. Customers are still paying it.
The Kansas Supreme Court ruled in April that Evergy could no longer charge demand fees to solar customers saying they were a “discriminatory rate,” and therefore, in violation of Kansas law.
But five months later, Jason Carmichael, a Wichita Army veteran, and others who use solar to generate energy at home are still paying the fee.
“The fascinating part is that even though that was ruled illegal, I’m still getting charged the demand tariff,” said Carmichael, who saved for three years to put the $17,000 solar array on his home a year ago.
The amount of electricity he used in August: $2.84. His August bill: $46.44.
Part of that is the basic service fee of $14.50 that everyone pays, but nearly 60% of his bill was the demand fee that is now considered illegal.
Before installing his solar system, Carmichael was paying approximately $115 a month for electricity.
‘I made my decision to buy my system and I had no idea about these demand tariff shenanigans,” Carmichael said. “I have written all the legislators and the governor’s office, trying to get them to look at what the rest of the country is doing. No other state has done this. There is zero incentive from the state to install solar panels, and just across the river in Missouri, they’re giving a tax credit.”
Westar Energy, (now Evergy), and Kansas City Power & Light got permission from the Kansas Corporation Commission in 2018 to charge demand fees to Kansas residents who were using solar to generate energy at home.
Utilities argued the fees were needed as a way to maintain the utility companies’ infrastructure and transmission lines since solar customers have smaller bills. Opponents saw the fees as a way to discourage solar in the state.
Ultimately, the Kansas Supreme Court found these fees were “unlawful and the (Kansas Corporation) Commission erred by approving a discriminatory rate,” according to the opinion written by Justice Caleb Stegall, a Brownback appointee.
Despite the court’s rulings, solar customers who installed their systems after October 2018, will continue to pay the discriminatory fees until February 2021 when a new rate structure is scheduled to be finalized. This will be 10 months after the Supreme Court’s ruling.
There is no current order to refund solar customers for these fees.
The Clean Energy Business Council, a professional network interested in renewable energy, sent a letter to the Kansas Corporation Commission asking that people be refunded their money and no longer be charged the fees. They have not currently received a response.
The KCC said it could ethically not discuss the issue.
“Due to the open docket, it would not be appropriate to comment on specifics at this point other than to say that the goal of the Commission is to ensure that all ratepayers are treated fairly and that no customer class should face price discrimination or be required to subsidize other customers,” said Linda Berry, Director of the KCC. “In working with stakeholders, Commission staff will work toward finding that balance.”
It’s bittersweet for Zack Pistoria, the Kansas lobbyist for the Sierra Club, a national environmental organization, and one of the organizations that went to court to fight the demand charges.
“We thought ‘Hey this is a victory for solar. People won’t get charged these punitive charges and things will change for Kansas and the future of solar in Kansas,’ and then here we are the first day of September, and effectively nothing has changed,” Pistoria said. “And we’re not going to see a change until February 2021?”
Evergy confirmed that it is still charging solar customers the demand charge, but said it has to continue to do so until February of next year.
“We can’t change our prices without approval from our regulators,” said Gina Penzig, communications manager for Evergy. “It has to go through and be approved by the KCC before we can make a change to customers’ prices. We could get in trouble for that because we would be acting outside of our regulatory compact with the state.”
When the Kansas Supreme Court sent the issue back to the Kansas Corporation Commission to handle in April, the KCC developed a schedule that will culminate in a hearing in December, post-hearing briefs in early January, and the commission order on February 25, 2021. Only then will Evergy be able to change the way it charges customers, Penzig said.
“We’re still a long way away from the resolution of this docket, (and) resolution of this issue,” said David Nickel, consumer counsel for the Citizens Utility Ratepayer Board. “These rate cases in general are very complex. They involve areas of accounting, economics and elements of fairness and the law, all kind of intertwined into one.”
Penzig said that Evergy is currently drawing up potential rate designs and justifications for the designs to present to the commission in October. It is only focusing on solar customers and will not change the rates of other residential users.
“We are supportive of the growth of renewable energy in Kansas...and we’re starting to add more utility-scale solar,” Penzig said. “We just want to make sure that rates are set in a way that is sustainable for that growth, and that customers have the right price signals in place because we know that they’re making an investment that is, at least in part, based on economics and their budget.”
But not all advocates and consumers are buying the argument that “it takes time,” especially as customers are still expected to pay the additional charge on their bill each month, with no promise of a refund.
“The Supreme Court made their ruling almost six months ago,” Carmichael said. “How hard it is to go to the KCC and sit down for 20 minutes and say ‘Hey,...you don’t get a charge more for people that have (solar)‘? It’s a real simple agreement.”
This story was originally published September 22, 2020 at 5:01 AM.
