A legislative committee this week advanced a bill that would reduce benefits to small electricity generators — such as homeowners with rooftop solar panels — who also use the electrical grid, a move one critic said would kill the solar-power industry in Wyoming.
Committee members advanced amendments to the state’s net-metering laws saying they would reduce “cost shifting” that unfairly burdens electricity consumers who don’t have solar or other private power systems. The Joint Corporations, Elections and Political Subdivisions Committee agreed in a meeting in Jackson on Sept. 16 it would work on the bill at its next meeting set for November.
Utility consumers who generate some of their own power forego paying a fee to the utility for that energy, those involved in the debate explained. Some portion of that avoided fee would have covered costs for building power lines, plants, substations and so on.
As a result, those facility costs avoided by solar generators are shifted to other ratepayers, lawmakers said.
There is “some serious cost shifting” now taking place, said Rep. Danny Eyre (R-Lyman), who proposed amending the existing law. His bill would rectify the perceived problem “without killing the [solar] industry,” he said.
But the measures under consideration would have disastrous effects on Wyoming’s solar industry, said Scott Kane, co-founder and owner of Creative Energies. That three-state company has offices in Lander, Victor, Idaho and Salt Lake City.
“It will shut it down,” Kane said of the proposed amendments’ effects on his industry in Wyoming. “There’s no doubt about it.”
Lawmakers supporting the bill contend that solar power consumers don’t carry their fair share of fixed costs — the overhead costs an electric utility provider accrues erecting power lines, building substations, maintaining buildings, paying salaries and so forth.
Utilities recoup their energy costs — the price they pay for an electron — by billing a consumer for the number of kilowatt hours he or she uses each month. They recoup some of their fixed costs through a base charge imposed uniformly to all consumers in a class.
Most consumers see these two charges broken out in their utility bills.
But utilities also recoup some of their fixed costs through their energy charges, said Jim Webb, CEO of Lower Valley Energy, who testified at the hearing.
By generating their own electricity, net-metering customers typically consume fewer utility-generated electrons and have lower energy charges. In this way they avoid paying some of the fixed costs built into the energy charge.
Eyre and his bill supporters contend net-metering customers shift that portion of avoided fixed costs to regular consumers. Yet net-metering customers still take advantage of the fixed assets — power lines and so-on — when they call on the utility for power. That happens at night, using a solar-generating example, when the sun isn’t shining.
To correct that shift, the amendment would first require solar-generating and other net-metering customers to pay the retail rate for all electricity they used — even the electricity generated by private solar systems at their residences.
The utility would then pay the customers back for self-generated electricity, but only at a lower wholesale or avoided-cost rate, not the higher, retail rate.
Retail rates are about three times wholesale rates, Kane and Sen. Cale Case, (R-Lander) explained. “In simple terms,” Kane told WyoFile, “this could reduce by two thirds the financial return on solar.”
The amendment likely means installing another meter between a solar system and a residence, Kane said. That system would show how much electricity a net-metering customer generated, a figure that is not collected by utilities today.
“They would be inserting themselves into your home,” he said in an interview. “They would measure what your total energy consumption is in the house.”
The monthly bill would be for that total consumption, including the owner-generated electricity — at the utility’s retail rate that includes the portion dedicated to fixed costs.
“They would also meter how much energy your solar produced,” Kane said, “and they would pay you a diminished [wholesale or avoided-cost] amount for that.”
A rate-structure problem
The amendments “unfairly identify solar” as the cause of cost shifting, Kane told the committee. “Solar is not necessarily the cause of that cost shift.”
People who are frugal, low-income families who don’t use a lot of energy, conservation-oriented households who turn out the lights or add insulation, all also shift costs to other consumers. Yet federal, state and local agencies give grants to help reduce energy consumption in those ways.
Kane pointed to the Wyoming Business Council as one such entity. “Energy efficiency improvements are often overlooked as cost-effective opportunities for Wyoming’s local governments, public schools and small businesses,” the council writes on its website. “The State Energy Office uses federal grant money to offer a range of programs to help reduce energy consumption.”
Kane envisioned four homes, with Home One using a normal amount of energy from a utility. Home Two cuts its utility bill by using net-metering and a solar array. Home three invests in new insulation, has a wood-burning store and also cuts its utility bill. Old Widow Murphy lives in Home Four and only heats one room of her home, cutting her utility costs.
Homes Two, Three and Four all shift costs to Home One. But under the proposed changes to the net-metering law, the solar home — Home Two — will be dinged while the others aren’t.
“An identical cost shift happens in each case,” Kane said. “Somehow it’s uniquely solar that is being called the cause of cost-shifting.”
Cost shifting is not a net-metering issue as much as a rate structure problem, Kane said. “A cost shift is intrinsic to this [energy] rate,” that includes fixed costs, he said. “Low users pay less of the fixed cost than high users.”
A Teton County Commissioner who has a solar array on his roof told the committee why he put money into the project.
“Our investment in solar is an investment in somebody’s job in Wyoming,” Mark Barron said, speaking for himself. His utility bill is as little as $18 a month, he said and the Legislature needs to honor the contract it made with those like him who have existing systems.
Without addressing consumers with net-metering systems, proposed changes to the law would be “a regulatory taking of existing users,” said Hesid Brandow, an organizer with the Powder River Basin Resource Council.
The Rock Springs-Sweetwater County Airport wouldn’t have installed a solar array without the existing net-metering laws, manager Devon Brubaker told the committee. More is planned, he said. But “without true net metering we would not move forward.”
If there was any cost shifting, it was minimal, Brubaker told the committee. The issue should be addressed in rate structures overseen by regulators. Regulators could approve rates that call for taking fixed costs out of the energy charge and imposing them in the base rate.
“Let’s let the [Public Service Commission] do what they do,” he said.
Lower Valley Energy did exactly that when it oversaw a Montana utility in Red Lodge that sought help when it was in financial straits, Webb said in an interview. At a small resort area, the utility served homes that were occupied mostly in the summer. The solution was to increase the monthly base rate from $16 to $32.50
“I should be indifferent to where the electricity comes from,” Webb told the committee, “as long as we’re covering our cost … for lines.”
Webb agreed that the bill would be a death-knell for the fledgling solar industry.
“It would really kill in our area any solar going in,” he said in an interview. “It’s already tough for solar to pencil out.”
Wyoming’s Office of Consumer Advocate agreed with the principle that everybody should share the cost they impose on the system — be it transmission, generation or distribution — Bryce Freeman, administrator at the OCA told the committee.
Net metering “hardly poses a threat” or creates much cost shifting, Wyoming Outdoor Council Program Director Steff Kessler told the committee. “It is not harming others,” she said.
She touted the opportunity the industry brings for a diversified job environment, calling solar work “the fastest growing job in the U.S.” In that field, Wyoming is lagging compared to other states.
A handout she distributed showed there are 886 net-metering customers in the state and 67% generate electricity from solar devices. Almost 90% are residential users, the handout said, quoting from the U.S. Energy Information Administration.
In Wyoming there are 144 jobs in the solar industry, Kessler’s handout said, quoting from the Solar Foundation. Wyoming has the eighth-best solar resources among 50 states but is ranked 43rd in solar jobs per capita, according to her group.
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The average electricity rate in Wyoming is about 10 cents a kWh, according to ElectricityLocal.com, which bills itself as a comprehensive local electricity guide for the nation. The average Wyoming home consumes 894 kWh a month, so the average homeowner who doesn’t use solar pays an electric bill of approximately $1,073 a year.
The Legislature enacted the existing net metering statute in 2001. Case, an economist, told the group cost shifting is consequential.
While the cost shifted today may be small, that can change quickly, he said.
“It suddenly becomes significant,” he said.
There has been a 100-fold increase in solar customers in five years in Utah, Case told the committee. “I definitely think this is a big deal,” he said.
This story has been updated to correctly name the Powder River Basin Resource Council organizer who testified — Ed.
Meanwhile in Utah: https://www.utilitydive.com/news/virtual-power-plant-utah-sonnen-rocky-mountain-power-future-of-storage-distributed-energy/563734/
Wyoming is going to lose out on energy market opportunity – and the jobs that come with it – if legislative blocks like this get enacted. You often hear the phrase “innovation not regulation” when it comes to energy – that also applies to solar.
Thank you Angus!
I appreciate all the relevant comments above. One thing I didn’t see mentioned was the fact that energy conservation and solar electrical production reduce the need for utilities to have to add to their infrastructure with more & more demand.. That would include upgrading power lines etc. which reduce cost to rate payers.
Lower Valley Energy ‘s idea of taking care of the infrastructure cost in the base rate makes fair sense to me.
The world markets and the Governors recent economic study show dramatically that the coal industry is declining and the solar industry is growing. It seems that encouraging the solar industry would move Wy. forward instead of backwards.
I will do my best to defeat this amendment.
I am a community organizer for renewable energy in Wyoming at Powder River Basin Resource Council. Renewable energy can be a significant part of Wyoming’s efforts toward economic diversification and job growth if we accept the changing trends in the electricity sector. Solar installer is one of the fastest growing job positions in the US economy right now. I am actively working on this topic and would love to connect with anyone who is interested in helping.
If you want to check us out, this link goes to Powder River’s renewable energy page: https://www.powderriverbasin.org/what-we-do/renewable-energy/
I am just wondering when our Wyoming legislator is going to catch up with other states that offer incentives and tax breaks for installing solar or incentives for purchasing electric cars. The federal incentives are going to run out in a few years for solar.
In California in 2020 all new residential housing has to be built with solar. In addition if you buy an existing house you have to put up money to have solar installed. It can be put in your mortgage. By the way, I don’t really like California but at least they are working on the problem and our legislator are working on making it worse
When is our state and federal government going to realize that coal as we know it is killing our planet. Wait… if we send it to China we get rid of our problem right……. Oh hold on a second it is Global warning right
Dinosaurs created the coal and dinosaurs are passing the legislation to protect it.
Thank You for a good explanation of this situation. We are happy to pay our “fair share” of the infrastructure and services we rely on every day. At the same time, we try to minimize our home energy use –electricity & natural gas — out of a concern for shared resources, and the health of our planet. We applaud our WY neighbors who make the additional investment in solar power for their homes and businesses. They should not be financially penalized for their commitment to conservative, alternative resource use.
The new epithet that perfectly states the state of Wyoming leadership’s obsessive compulsion to defend Coal to the bitter end by denying the reality of it :
We are now living in a country that would burn down the planet rather than see fossil fuel industry suffer loss in profit, everything they (our lawmakers, bought and paid for) can do to hinder clean renewable energy expansion is money in the bank!
There would be enough jobs to employ lost miners jobs if our governor would allow it!
I have ground-mount solar and net metering and insulation and very low energy use and a plan for an electric car. I’m a widow on SS. I am paying the required monthly fee. My monthly usage is below the “average” because I am frugal. This proposed bill is making me angry enough to look into batteries. I am being “required” to be hooked to the grid and of course, that automatically sets up inequalities. How about taking me off that requirement or reimburse me a $$$$ amount EQUAL to what you initially charge me? Fossil fuels and an antiquated, non-functional grid are not what this planet needs now. I don’t want to be penalized and forced to pay for someone else’s wasteful lifestyle just to maintain business-as-usual.
Thank you, Angus M. Thuermer Jr. and WyoFile for the information in this report. Thank you too, those who have commented above. The proposed legislation certainly tries to tie Wyoming to coal forever no matter what the cost. That seems to be the conservative way; fight progress at all costs. Our politicians are quick to cry foul when about 600 coal workers lose their jobs, but had little or nothing to say about the thousands of oil and gas workers who have lost their jobs over recent years as natural gas and oil prices dropped. Wyoming citizens and legislators need to get a grasp of reality regarding our dependence on energy resources for funding the state.
This legislation has nothing to do with “cost shifting”, but is yet another attempt to prop up the dying coal industry at the expense of solar energy. The coal industry cannot be saved and these vain attempts to sabotage the competition will not work in the long run. For more information on why coal is on the way out and renewable energy could be a huge industry in Wyoming, see my comments on the PacifiCorp article in which I quote a leading financial/economic magazine.
So… Basically, anti-government, free-market, freedom-loving conservatives in the Wyoming legislature are seeking to use the government to *FORCE* individuals who generate their own electricity at their own expense, to sell ALL of that electricity to the local utility company at a price they aren’t allowed to determine, then force them to re-purchase ALL of their own electricity BACK from that utility company for a minimum of 2-3 times the price they were forced to sell it for, all for the explicit purpose of generating more money for the Utility company in order to prevent “Solar users from shifting costs to other utility customers”.
Remember when last session, the legislature essentially REQUIRED that utilities purchase electricity from unprofitable coal-fired power plants, instead of switching to cheaper sources of electricity in order to explicitly protect the coal industry? What about THAT “cost-shifting to other utility consumers”?
Good to see that these “conservatives” still believe that “government shouldn’t be in the business of ‘picking winners and losers'”
It’s spun as a market economy, but operates as a socialist economy for the ultra-wealthy.
The book A Republic No More outlines how money increasingly buys special interest legislation.
Lobbying provides a far better ROI than does normal business operations.
Cronyism is as alive in the U.S. as it is in “communist” China, socialist Russia, socialist India, socialist Vietnam, North Korea, etc.
Whilst there is often little agreement on the true constructs of a socialist economy, there is always one common tenet of socialism – central-planning & control.
American politicians, even supposed “conservatives”, exist largely to create legislation to give the true wealthy ruling elite the power of central-planning & market control.
Ditto for “liberals”.
I’ve lived in “right-wing” Wyo and “left-wing” Vermont, and there is little true difference.
Both wings are attached to the same creature, the animal that exists to feed the elite.
The U.S. is an example of socialism for the ultra-rich.
Central-planning designed to redistribute more capital to the .001%.
Excellent comment. I hadn’t thought about the legislature forcing coal burning plants to remain open and what that costs users. That point should be emphasized in all discussions as it shows that what this is really all about is trying to protect coal.
Two weeks ago I took it upon myself to appear before the Cody City COuncil on the night when they were approving municipal electric rates. Cody is operated by an electricity monopoly provided by the City using power purchased from the very dirty oldfashioned Laramie River coal plant in Wheatland and the less dirty overhyped Dry Fork coal plant in Gillette. Cody gets its power on paper through a tiny little co-op called Wyoming Municipal Power Agency comprised of seven towns : Cody , Powell, Lusk and some really small bergs. it’s almost a comic tragedy, so beholden to coal and in such a narrow minded business model manner.
My question to Mayor and Council was this : what does Cody’s power sourcing and distribution look like 10 or 20 years down the road ? You only seem to look ahead to next year’s power purchase via WMPA , but the handwriting is on the wall for coal fired electricity. What about net metering ( I asked that specifically ). Cody does inf act have a city net metering program , but it’s mostly token and not much of an incentive for consumers. it also caps out at 25,000 kilowatts per annum per customer. I carried on : What about alternative energy and demanding your wholesale provider utilize something like 40 to 50 percent renewabale energy at some point away fromr eliance on coal , a common practice these days? Are you even aware of the fact that while Wyoming was fretting and fulminating over 1,000 lost coal mining jobs in Campbell County since the financial crash 0f 2009 as though it was the end of the world as we know it , one state south of here in Colorado 35,000 new jobs were created in green energy ? I also pointed out that the huge national centralized American power grid was a perfect example of a Soviet Union -style communist collective centralized bureaucratic state owned industry , and Cody was buying into it past present and future . The discussion went nowhere. Meeting minutes and newspaper accounts of our little 15 minute banter on Cody electrical future were not even reported.
The Bottom Line is my Mayor and Council came down on the side of Coal Now-Coal Forever – the Wyoming company line – and I more or less wasted there time or even insulted them by daring to speak hydrocarbon heresy before them.
THAT is the problem with Wyoming when it comes to electrical generation and distribution. Boneheads abound..
Berksahire-Hathaway, which owns Rocky Mountain Power, enjoys supplying electricity to the grid from the Topaz Solar Farm at 10-15 cents per kw-hr……but has a different standard when rate-payers make some of their own electricity.
“In November 2017, Rocky Mountain Power made a deal with the state’s utility authorities to phase out net metering. The program was paying customers who generated their own electricity with rooftop solar panels the market rate for their excess energy that got sent back into the energy grid. As of August 2018, new rooftop solar installations were down 23 percent, likely due to the cancellation of the net metering program. New solar customers are paid by a transitional program that pays slightly less than the market rate until 2033. People who installed solar panels prior to November 2017 are grandfathered at the previous rates until 2035.”
Berkshire Hathaway has spent over $1.2 to $2.4 million on lobbying EACH YEAR since at least 2011, plus over $3.6 million in 2010 alone.
The electric utility industry in Wyo,
led largely by coal & gas companies, spends over $100 million each year on lobbying, averaging over $120 million yearly.
It’s a billionaires world.
Liberty & justice for all?
Einstein, Plutarch, Adam Smith, Thomas Jefferson, Vilfredo Pareto, and countless others have warned that wealth concentrates into the hands of a few.
It is those whom best use their wealth to buy politicians to influence governance & public policy that acquire that concentration of wealth.
Money is power.
The more wealth a few have, hold & control, the fewer rights, freedoms and liberties exist for everyone else.
This is the age of neo-feudalism.
Yet democracy and a market economy require liberty of capital, not concentrations of capital.