ORIGINAL REPORTING: New Direction For The Debate Over Cost Shift And Value Of Solar
NARUC rate design manual reignites debate over cost shift, value of solar; A new guidebook for state regulators runs into familiar contentions among utilities and the solar sector
Herman K. Trabish, August 4, 2016 (Utility Dive)
Editor’s note: Rate design complexities are now the weapons on the battleground where utilities and advocates are fighting about distributed energy resources
Regulators around the country are refereeing heated debates between utilities and distributed resource advocates. Traditional utility and regulatory models are under pressure from the growth of distributed energy resources (DER), reports the Manual on Distributed Energy Resources Compensation, a new guidebook commissioned by the National Association of Regulatory Utility Commissioners (NARUC) to help guide the debate over the new investments, new ways of allowing utilities to recover their costs, and new understandings of customer demand that will be necessary to meet the challenge.
Both Phil Moeller, a senior vice president at the Edison Electric Institute, and Sean Gallaher, director of state policy at the Solar Energy Industries Association (SEIA) praised the manual, though their member companies often find themselves at odds in state rate design debates. Both also urged special attention to the question of a cost shift (or cross-subsidy) from customers with distributed generation (DG) to those without. Utilities say customers with rooftop solar and other DG often do not pay their fair share for grid upkeep, while solar companies say their systems provide grid benefits utilities do not recognize. Confronted with that question, general agreement on the approach of the NARUC manual turned to disagreement, leaving the question unresolved. But beyond persistent debates over the cost shift and value of DERs, the NARUC manual provides some vital guidelines for when utility regulators should take action on rate design for distributed resources… click here for more
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