ORIGINAL REPORTING: MA to have the first mandatory U.S. residential demand charge

Will the country's first mandatory residential demand charge slow the Massachusetts solar boom? Opponents of the charge, approved as part of an Eversource rate case, say it could harm the growth of solar and other distributed resources by significantly increasing costs for customers.

Herman K. Trabish, Jan. 25, 2018 (Utility Dive)

Editor’s note: The Eversource proposal remains under legal appeal and continues to threaten long term solar growth inMassachusetts.

Massachusetts regulators made history Jan. 5 by approving a three-part rate for Eversource Energy that includes a mandatory demand charge for residential customers who own distributed energy resources. Eversource is the first regulated electric utility to win approval for such a charge from state regulators. It is one of the best examples so far of new strategies being used by utilities to advance controversial rate concepts, such as demand charges. A demand charge, which is common for commercial-industrial customers, imposes a significantly higher per-kWh charge for the kWh used during a customer’s highest 15 minutes of electricity consumption each month. For some commercial-industrial customers, it makes the cost for that 15-minute period as much as half their monthly bill.

Thanks to Massachusetts’ strong solar policies, it became the eighth biggest U.S. residential solar market by 2016, rising to sixth in Q3 2017, according to the most recent Solar Energy Industries Association figures. But Eversource opponents say the demand charge could compromise the value proposition for distributed energy resources (DERs) like rooftop solar, and retard market growth, by causing the same bill increases for residential customers that it tends to cause for commercial-industrial customers. For that and other reasons, the Eversource demand charge elicited an appeal to the Massachusetts Supreme Court and stirred debate about the future of so in the state at the legislature… click here for more

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