Case could set solar precedent

Utility in West Texas proposes rate structure that would put additional charges in the bills of its customers with rooftop panels

El Paso Electric, the investorowned utility that serves the far West Texas city and parts of New Mexico, is again at the center of a debate over how to value power from rooftop solar panels.

The regulated utility has proposed a new rate structure that would separate thousands of rooftop solar panel owners into their own rate class and put additional charges on their bills to help recoup losses resulting from less electricity moving through the company’s power lines. El Paso has around 1,800 customers with rooftop solar, a small portion of its more than 276,000 residential customers.

El Paso proposed a similar rate structure in 2015, but it was hotly contested by clean energy advocates, who argued it would discourage the adoption of solar power, and the utility ultimately dropped it. The current rate case is proving to be no less controversial, as consultants, environmental advocacy groups and El Paso residents have objected to proposed rate increases, especially increases for rooftop solar owners.

This time, however, if the utility and its critics fail to reach an agreement, it could be taken up by the Public Utility Commission in a move that could shape policy on rooftop solar systems. Other states, like Nevada, have considered separating solar panel users into a group that pays higher rates, a move that opponents say offsets

the savings from solar power.

The issue, utilities argue, is they have fixed costs to provide transmission, and power generated by rooftop solar systems cuts into the revenues they need to keep their systems reliable. If solar users want to be able to tap that transmission system when the sun is not out, they need to pay rates that allow utilities to maintain their lines, the companies argue.

In Houston, the issue has yet to gain much attention. But more rooftop solar companies are coming into the market, and offering customers lower costs and subsidies for the excess power they generate and feed into the grid.

Valuing solar power, and compensating utilities for the loss of customers who use it, has become a hot-button topic as rooftop solar panels have become cheaper and more people install them. Utilities like El Paso have found that they are competing with their own customers for power generation, said Jim Schichtl, vice president of regulatory affairs for El Paso Electric.

“I don’t think we should say anymore that El Paso is not a competitive company. That’s not true anymore,” Schichtl told an audience at a solar panel conference recently in Austin. “We are competing with our own customers.”