The cost of generating solar energy most likely will increase for about 6,000 Pedernales Electric Cooperative members with solar panels on their homes after the board of directors’ next regular meeting at 9 a.m. Friday, July 16.
The seven-member board is expected to give final approval to behind-the-meter solar policies that opponents call the most punitive in the country but that PEC staff say is a long-overdue effort to spread the cost of providing electricity equally across the co-op’s 356,000-member service area.
“We are moving from a subsidized rate to an unsubsidized rate design,” David Thompson, vice president of marketing, told DailyTrib.com. “That can feel like an inequity. I can appreciate a member saying that.”
The new policy moves solar members from net metering to time-of-use. Also, the application fee for future solar users is set to increase from $0 to $650. That alone will deter some PEC members from going solar, according to a spokesperson from Freedom Solar, a commercial solar panel installer serving the Austin area.
“The homeowners we’ve talked to are uncertain about how the policies would affect them and want to see PEC reverse these rate changes until they can study the benefits of solar in more detail,” the spokesman said in a written answer to the DailyTrib.com’s emailed questions. Freedom Solar has about 650 customers who are PEC members.
PEC conducted a cost-of-service study, which ended in 2020, that highlighted significant under collection from solar members, Thompson said. Under collection of rates last year was at $650,000. This year, it will be closer to $900,000, reflecting membership growth.
The conflict seems to lie with the type of study being done. PEC conducted a cost-of-service study. The Texas Solar Energy Society, an association of solar professionals and advocates, said a solar study would have been a more accurate reflection of the cost as it would include the environmental benefits, including a decrease in the carbon footprint.
“We don’t have the price of (carbon dioxide) in our accounting book as of now, so we can’t put that in the calculation of the value of solar,” Thompson said.
The cost-of-service study, which is part of the board’s rate policy, identified the under collection and has to be addressed.
Net metering charges customers a flat rate for every hour of the year for electricity consumption.
“Energy costs are vastly different throughout the time of day and year,” Thompson said.
Time-of-use metering will address that by discrepancy.
“Most of the solar folks will benefit from that because we will be buying power from them during high times,” he continued.
The conflict ensues over how that time-of-use metering rate is determined. Rates are set based on the highest hour of usage the previous month.
Freedom Solar explained it this way.
“Each customer’s annual 4CP* demand charge for the entire next year is determined by their average usage across (the Electric Reliability Council of Texas’) highest 15-minute electricity demand windows for the months of June, July, August and September,” Freedom Solar said in its answers to DailyTrib.com. “If a customer’s electricity usage spikes during that window — for example, because their A/C turns on or their pool pump cycles on — then they’ll pay higher rates for the entire next year.”
Freedom Solar called time-of-use, which charges different rates at different times of day, too complex and unfair.
“PEC members would also be subject to two different demand charges – one based upon ERCOT’s Four Coincident Peak periods (which will determine their electric rates for the rest of the year calculated on usage at the highest peaks of usage) and one based upon peak usage each month – both of which can be difficult for a member to control,” Freedom Solar’s spokesperson wrote.
“Solar members have been asking for this, and we have been working with vendors to provide time of-use-rates,” he said. “Most of the solar folks will benefit from that because we will be buying power from them during high usage times.”
The cooperative held three public hearings on the changes and has responded to hundreds of emails on the topic. Representatives of PEC also met with the Texas Solar Energy Society “four or five times,” Thompson said.
“This is an issue we identified five years ago,” he said. “We do whatever is in the best interest of our members.”
The board is again holding public in-person meetings after meeting on Zoom and live streaming the last year because of COVID-19. Meetings are still live streamed and be accessed here. Meetings are held in the auditorium of PEC Headquarters, 201 S. Avenue F in Johnson City.
*Four Coincident Peak is the average of an individual customer’s peak during each of the four summer months. Those who consume less power during those hours can cut their total electric bill for the coming year.