Minimum charge for electricity, extra fees for solar power not allowed, KCC rules
Evergy won’t get to charge all its electric customers a minimum of $35 a month, even if they use little power.
Nor will it get to charge an extra fee to customers who have rooftop solar power.
The Kansas Corporation Commission rejected both of the proposals Thursday morning in a win for solar, as renewable energy advocates criticized the proposals for discriminating against solar users and punishing low income and energy-efficient customers.
“The solutions purported by the company, we believe, were flawed,” said Commissioner Susan Duffy. “I believe we have given stakeholders an opportunity outside of the confines of a commission proceeding to work together and explore the best solution, not only for rooftop solar issues but other issues as well.”
The issue is coming up now because the state Supreme Court ruled in April of 2020 that Evergy’s demand fee — charged to solar customers who use little power — was illegal and discriminated against solar customers.
The KCC ordered that while solar customers have continued paying the “discriminatory rates” for 10 months after the court ruling, Evergy does not have to give refunds to customers, according to Brian Fedotin, the general counsel of the KCC.
“Not only was Evergy operating under a rate design approved under the Commission and the Court of Appeals, but in finding the rate design discriminatory, the Supreme Court declined to order a refund,’ Brian Fedotin.
There is a light at the end of the tunnel for solar customers, as the KCC ruled Evergy must stop charging solar customers the fee within the next 30 days.
The KCC ruled that instead of choosing one of Evergy’s proposals, they will instead postpone the matter and ordered Evergy to revert all customers to the rate plan in effect before 2018, when the company started charging a demand rate, an additional fee for solar customer.
Evergy will be allowed to track the revenue that it would have collected under the current proposed rate design and would be able to use these numbers to inform its next rate design during the rate case in 2023 so as to not adversely affect the utility’s bottom line.
“We support solar energy and customer efforts at sustainability,” said Gina Penzig, Evergy communications manager who added that Evergy was still reviewing the KCC order. “We believe that we need to continue to work with stakeholders to find an alternative rate that protects non-solar customers from subsidizing those who have solar generation.”
This solution was first proposed by the Citizens’ Utility Ratepayer Board, a state agency tasked with advocating for consumers in utility cases, in November, when it asked the KCC to reject both of Evergy’s proposals for electric rates.
The KCC gave Evergy permission in 2018 to charge solar customers a demand fee, which the company argued was needed to maintain its infrastructure and transmission lines since solar customers have smaller electric bills. Opponents of the fees saw them as a way to discourage residential solar.
Ruling that solar customers were discriminated against, in April 2020 the Kansas Supreme Court said Evergy could no longer charge them a demand rate, as it was in violation of Kansas law. The court handed the issue to the KCC, and Evergy proposed two solutions.
The first, and Evergy’s preferred solution, would have been a monthly fee of $3 per kilowatt of installed distributed generation capacity, referring to the size of the solar array or other energy-producing systems. While the fee would technically apply to all customers, only solar customers would be paying it.
Solar advocates criticized this proposal as a rebranding of the fee already ruled discriminatory by the Kansas Supreme Court. The KCC agreed, which is why the commission declined Evergy’s request to pursue this method, according to Commissioner Dwight Keene.
But, that does not mean solar customers are out of the woods when it comes to a demand charge in the future, as the KCC did agree with Evergy that the utility provides a different service to solar customers and therefore should be able to charge them differently. The problem was that Evergy could not adequately define what the different services are in time for this ruling.
“The denial of Evergy’s proposed grid access charge is not a blanket rejection of the grid access charge concept,” Keene said. “There is a high probability, I believe, that the consideration of grid access charges in some form will continue in future rate proceedings.”
The second Evergy proposal the KCC rejected was a $35 minimum bill for all customers, which was heavily criticized by 53 Kansans who spoke in person and an almost unprecedented 1,100 calls, emails and letters when the KCC requested public comment on the issue.
The KCC echoed Kansans concerns Thursday, saying the commission was concerned that a minimum bill would adversely affect low-income user, especially since Evergy could not promise to cap the minimum bill and estimated that it would grow, Fedotin said.
This story was originally published February 25, 2021 at 12:33 PM.
