Lodi Electric announces plans for new solar program

The Lodi Electric Utility recently announced it will no longer offer net energy metering to new solar customers while also proposing a successor program that it believes will be fair to solar and non-solar customers alike.

Currently, state law requires the utility to provide net energy metering to eligible customer-generators until such time as the installed capacity of those systems reaches 5 percent of the utility’s peak demand.

The utility decided to close the program after reaching that mandate.

Net energy metering is a billing mechanism which compensates solar customers at the full retail rate for the electricity they generate onsite.

According to LEU Director Liz Kirkley, utilities in California are required by law to compensate solar customers for the power they produce.

However, under the current program, solar customers are able to avoid transmission distribution costs even though the customer relies on the assets to remove excess generation and receive energy from the utility, Kirkley said, adding that non-solar customers are stuck carrying the burden of the costs.

Based on current solar installations, that cost shift is estimated to be approximately $650,000 annually, Kirkley said in a report she presented to the Lodi City Council in late December.

“We’re paying them higher amounts than our cost to purchase energy,” she said. “It’s like paying them at retail when we’re buying it wholesale”

A continuance of net energy metering, as currently structured, will burden nonsolar customers with higher costs.

In recent years, there has been an increase in the number of solar systems installed by LEU customers, which Kirkley attributes to the declining cost of solar panels along with rebates and tax incentives.

Kirkley said the new energy program they’re proposing would allow the utility to fairly compensate solar customers without shifting the cost to other customers. Kirkley plans to propose the new program to the city council in the near future.

If approved, the proposed program would not affect current solar users. These customers will continue to receive compensation under the current net energy rate schedule 20 years from the date of their system’s installation.

Under the proposed program, new solar customers will be required to pay the fees associated with their total consumption as well as be compensated for their generation.

“What we’re trying to do is provide our new customers that have installed solar with compensation at the utility’s avoided cost so that it doesn’t create a cost subsidy for customers without solar,” Kirkley said. “We are not receiving sufficient revenue from our customers with solar and that means that our other customers without solar are going to have rate increases to help pay for that lack of revenue that we need to maintain our distribution system.”

Kirkley emphasized that both solar and non-solar customers use the distribution system and that all users need to pay their fair share of maintaining that system.

Mayor Doug Kuehne said he’s in favor of providing solar options, but there needs to be changes made.

“It’s kind of out of balance currently, when we have solar customers that are being subsidized by the non-solar customers, and I think that era has got to come to an end,” Kuehne said.

Councilwoman JoAnne Mounce said the city should be encouraging citizens to use solar power.

“Whatever that looks like is what we need to do,” Mounce said “If we do things to discourage people from having solar then we’re not promoting energy efficient options for people and we should do that.”