This city has impressive clean energy potential, but its utility is trying to block solar’s growth

The list of solar power’s benefits goes on and on.

Solar doesn’t pollute or waste water. Solar is getting cheaper every day, making it an increasingly affordable option for people to produce their own electricity and save money on their electric bills. The solar industry is employing thousands of people across Texas. And numerous studies show solar helps keep the electric grid balanced and reliable. What’s not to like?

Well, some utilities see customer-owned solar power as a threat to their profits – and want to stop its growth.

That’s why El Paso Electric has a new proposal that discriminates against homes and small businesses with solar panels. This proposal unfairly penalizes people who install solar, limits customer choice, and works against sunny El Paso’s impressive solar potential. Let’s break down the details.

The utility

El Paso Electric serves approximately 400,000 customers in West Texas and New Mexico, and supports solar power – but only when the utility owns and controls the resources. This isn’t the first time El Paso Electric has tried to block solar growth – last year, it unsuccessfully attempted to hit solar customers with a new, unexpected monthly charge. Now the utility’s back with a similar agenda.

The utility’s proposal

El Paso Electric is proposing a new rate structure that targets solar customers. If the utility succeeds, people and small businesses with solar panels will suddenly be hit with a higher monthly customer charge, as well as a new charge with which they will likely be unfamiliar: a demand charge.

A demand charge is a fee the customer pays based on the maximum amount of energy they use at any given point over the course of a month. A demand charge is normally imposed on larger commercial customers, like big box stores, not homes and small businesses. Today, El Paso Electric does not even measure the demand of individual residential or small commercial customers, meaning people don’t have the information needed to understand how their demand charge would be calculated. And if the utility gets its way, it will not notify a customer of their maximum demand for the prior month until weeks after the fact – denying customers the ability to manage their highest demand, which could result in a substantial fee.

El Paso Electric also proposes all solar customers (but not all customers) be switched to a time-of-use rate that charges more for electricity used in the summer during the hot day. If done right, time-of-use pricing can encourage the use of clean energy, but El Paso Electric’s proposal misses the mark.

People and solar lose

The utility isn’t going after the big players – like industrial customers or megastore chains – whose energy-use is significant and makes up a large part of El Paso Electric’s total demand. Instead, the utility’s targeting individual people and small businesses with solar, who have little means to fight back and make up a little more than one half of one percent of the utility’s Texas customers.

Moreover, the proposal is a bait-and-switch: El Paso Electric encouraged customers to install solar generation by offering financial incentives, and now wants to impose high charges on those same customers, who likely purchased solar to buy less electricity and save money.

El Paso Electric publicly claims to support energy efficiency and solar. For example, the utility touts its investment in solar facilities, and advertises its growing community solar program. But  it seems the utility only supports solar when it owns the panels, not when customers do.

The clock is ticking

El Paso Electric’s hearing is later this summer, from August 21 – September 1. If the utility succeeds, new rates will start to be collected later this fall, but the higher rates will apply for usage since July 18th. The El Paso City Council just rejected the proposal, so El Paso Electric will consolidate its appeal of that decision into its current application at the Public Utility Commission of Texas.

El Pasoans will never be able to reap the rewards of their city’s solar potential if their utility nips customer-owned solar in the bud. Environmental Defense Fund and others have intervened in this case to protect Texas’ burgeoning solar economy and ensure El Paso Electric does not get away with its harmful efforts. Stay tuned.


Photo source: Richard Schmidt-Zuper

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  1. Silent Running Raymo
    Posted July 8, 2017 at 6:11 PM | Permalink

    Dear John – thank you for writing a nice article and good summary of the EPE rate case and the impact on solar DG users here in the so called Sun City. Despite being ranked in the TOP 1 % of all counties in the United States for excellent solar irradiation – we lag behind snow regions ( LOL or COL)

    Our utility remains dependent on the old power industry operating model based on volumetric sales and total control over the Grid. This is unfortunate as given our excellent solar resource a more Forward thinking and market responsive utility would have many opportunities to incorporate solar dg into a Win – WIn for all involved including the environment. a new innovative revenue model could emerge and the relationship between customers and their utility could evolve and prepare the region for the Transactive energy economy and systems of the future.

    So for now this is a big missed opportunity . Hopefully the various intervenors and activists groups involved in this rate case will CITE the NARUC National Assoc. Regulatory Utility Commissioners recently published Guidelines report for Solar and DG energy systems. This report that was made public and released in fall Spring of 2017 was a 18 month effort at the national level to address proper rate design policies in respect to solar and other DG energy systems .

    The report states clearly that utilities conduct and perform detailed load research and life cycle cost benefit studies for solar and DG energy systems within their customer service area before they propose and implement specific rate designs for solar and dg energy systems. these studies need to be Holistic in design and incorporate the life cycle benefits over the life of the systems just like one would do for a traditional power plant.
    There have been numerous attempts to quantify the costs and the benefits to the Grid and all its customers from the impact of Solar DG and other systems. these have been done by some trade associations , utility groups and also soalr industry and environmental groups. Consensus on results has been hard to achieve.

    So the findings and the recommendations of the NARUC Utility Commissioner Group should definitely be used in any rate case. That should be the test of objectivity in this ongoing rate case.
    If no studies have been done that are Holistic in scope , then a stop order is necessary until the utility can conduct a objective and technically accurate measurement of the life cycle / load impacts of solar dg and other systems on their GRID. This process also requires open Transparency and input from the various groups involved so that we can get to the Heart of the Matter the TRUTH .

    So John I share this insight both as a EDF member and also as a veteran Renewable Energy and Efficiency practioneer . Thanks again for the good summary of our situation. There are many other inequities involved in this rate case especially how the old model ignores efficiency and demand side management options are under utilized .

    Best wishes in your work projects,

    Silent Running Raymond

  2. John Hall
    Posted July 12, 2017 at 10:21 AM | Permalink

    Dear Raymond:

    Thank you for your comment. I completely support your recommendation that the Public Utility Commission of Texas require El Paso Electric Company (EPE) to show that is has met the rigorous analytical process set forth in the NARUC Manual to develop a fair assessment of the impact distributed generation has on its system. When we filed testimony in the pending rate case a couple of weeks ago, this was our recommendation as well. You can read the testimony of Diane Munns, EDF’s Senior Director of External Affairs and Regulatory Policy, Clean Energy Program, at the following URL:

    Diane evaluates EPE’s proposed changes in light of the guidance in the NARUC manual. She recommends that the Commission reject EPE’s proposed changes and demonstrates that EPE has not done the groundwork or thinking as recommended by the Manual to justify the substantial changes EPE has proposed to its rate design.