Opinion: Duke's solar tariff request should be denied by utility commission
Though it's presently overshadowed by related negotiations on carbon reduction, Duke Energy has proposed a revised Net Energy Metering tariff to the North Carolina Utilities Commission (Docket E-100 Sub 180CS). The proposal seeks to drastically reduce compensation for electricity produced by customer-owned photovoltaic solar panels.
Much of the public discussion of the issue asserts that (presumably wealthy) photovoltaic owners use Duke's wires without paying for them, and are thus unfairly subsidized by other (presumably poorer) ratepayers. This assertion is false, and demands rebuttal.It's important to understand that Duke never pays cash to photovoltaic solar panel owners for their electricity. NEM is an energy accounting scheme: Photovoltaic energy exported to the grid is netted against grid energy imported into the customer's premises each month. If imports exceed exports, the customer pays retail rates, roughly $0.11 per kilowatt-hour, for the net difference. If exports exceed imports, Duke credits the net difference (in kWh) to the customer, for use against future bills. On May 31 of each year, any credits on the energy ledger are zeroed out, with no compensation to the photovoltaic owner.
Besides energy charges, every Duke customer in Asheville pays a "Basic Customer Charge" of $14 per month. There's also a "REPS Adjustment" fee of $1.41 per month, ostensibly to defray costs Duke incurs in meeting the state's Renewable Energy Portfolio Standard.
My wife and I have six kilowatts of photovoltaic on our roof. Over the past seven years, our panels have generated enough electricity that we have never had to pay for net imports. Since its installation, the system has generated an average of 8400 kWh per year, or 700 kWh per month. Thus, under the present tariff, we pay Duke $0.022 for each kWh we generate.
This energy fell into three categories. On average, 1300 kWh per year were self-consumed, meaning that they never crossed the meter onto Duke's wires. Conceptually, that energy was no different than heat from a woodstove or gas for a lawnmower.
Six thousand kWh per year were net metered. In essence, we provided clean, high-value energy to the grid, mostly on-peak, and Duke paid us back with dirtier, lower-value energy, mostly off-peak, in a one-for-one kWh trade. About 700 of these kWh were net metered by choice. It would be more convenient to self-consume them, by charging our electric cars during the day. Instead, we voluntarily help Duke manage its grid more effectively by charging at night, exporting during high demand times and importing during low.
Duke confiscated the remaining 1100 kWh per year, by zeroing the energy ledger on May 31. But they had already sold this energy to other customers when it was generated. At the standard retail rate, they collected about $120, none of which was shared with us.
Remember that $1.41 per month Renewable Energy Portfolio Standard Adjustment? Supposedly, that fee allows Duke to meet the REPS by generating or buying Renewable Energy Credits. The 7,100 kWh of our output that weren't self-consumed generated Renewable Energy Credits, we had to give to Duke, without compensation, as a condition for connecting to the grid. But the Legislature hasn't increased the portfolio standards requirement over time, so Duke doesn't need our Renewable Energy Credits. Instead, they sell them, under the "Renewable Advantage" program, for $0.012 per kWh ($3 per 250 kWh block), to customers who believe that they're paying to put more renewables on the grid. That's another $85, cash value, that we put in Duke's pocket.
To summarize: As net metered photovoltaic solar panel owners, my wife and I pay Duke $0.022 in cash for each and every clean, carbon-free kWh we generate, over $180 per year. We also give them over $200 worth of additional cash value per year, and a host of non-cash benefits. Duke paid nothing for our photovoltaic system.
Customer-owned PV does not penalize the poor. In fact, it lowers costs for all ratepayers, makes the grid more reliable, and helps loosen Duke's monopoly stranglehold on North Carolina's economy. That's why a host of social justice, environmental, and business groups oppose Duke's transparent attempt to destroy the rooftop solar market. The N.C. Utilities Commission should refuse Duke's cynical tariff request. Net metering, as it's already practiced, is net positive for everyone.
Dave Erb retired from the faculty of N.C. State University after teaching Mechatronics Engineering in the Joint N.C. State / UNC Asheville engineering programs. His specialty areas are electric vehicles and renewable energy.
This article originally appeared on Asheville Citizen Times: Opinion: Duke's solar tariff request should be denied by commission
