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Oklahoma electric utilities want higher rate for solar, wind energy producers

Senate Bill 1456 allows regulated utilities to apply to the Oklahoma Corporation Commission to charge a higher base rate to customers who generate solar and wind energy and send their excess power back into the grid. The bill passed the Legislature and is on Gov. Mary Fallin’s desk.
by Paul Monies Modified: April 20, 2014 at 3:00 pm •  Published: April 20, 2014

/articleid/4083525/1/pictures/2496019">Photo - 
Herb Hill, 85, looks at the solar panels he installed at his home in Crescent. Hill has 36 solar panels that supplement his electricity use. Photo by KT King, The Oklahoman 
 <strong>KT King - 

Herb Hill, 85, looks at the solar panels he installed at his home in Crescent. Hill has 36 solar panels that supplement his electricity use. Photo by KT King, The Oklahoman KT King -

With the details to be worked out at the Corporation Commission, Turner said there will be plenty of opportunities for public comment on the proper fixed charges for distributed generation customers.

“All we’re doing is setting the blueprint,” he said. “Should we have 100,000 customers or 200,000 customers go this route, we can properly account for them.”

Issue raised elsewhere

Across the country, similar fights between utilities and solar users over additional charges have sprung up, including in California, Hawaii and South Carolina. An Arizona utility last year proposed a steep surcharge for solar customers but succeeded in getting just a fraction of its proposal. The bitter fight led to a downgrade last month in the stock of Pinnacle West Capital Corp., the parent company of Arizona Public Service Co., by a Bank of America analyst.

“We believe the relatively constructive balance between regulators, consumer advocates and Pinnacle West from the last two rate-case cycles no longer exists and that the upcoming rate-case cycle, involving a highly contentious net-metering debate for solar panels, will likely be a challenging one,” Bank of America analyst Brian Chin wrote in March research report after visiting the state.

With additional federal environmental mandates looming and new transmission needing to get built, it’s unlikely rates will decline for most electric utility customers. At 8.33 cents per kilowatt hour, Oklahoma had the nation’s third-lowest average residential electric rates in January, according to the Energy Information Administration.

The state’s low electric rates are part of the reason solar hasn’t made more inroads in Oklahoma. But with the prices of solar panels declining each year, installation costs are looking more attractive for many homeowners.

Chris Gary, owner of Sun City Solar Energy in Oklahoma City, said a 10-panel setup with a mirco-inverter now costs about $15,000, not including installation charges. A similar system cost almost twice that six years ago, he said.

Gary said the effects of SB 1456 won’t be known until the new tariffs get approved by the Corporation Commission. But news of the bill has sparked interest from potential customers.

“It may affect our business, but we don’t know yet,” Gary said. “Is it a killer for solar in Oklahoma? I don’t believe so, but when you open the door to a charge, that means it can always be increased. A speedbump could turn into a roadblock.”

Out near Crescent, Hill wouldn’t be affected by SB 1456. The bill doesn’t cover existing solar and small turbine users. Hill, who spent 34 years at Oklahoma Gas and Electric Co. as an accountant and bookkeeper until he retired in 1987, understands the push by utilities to establish a new customer class for distributed generation.

“I don’t see any one side that is completely right or wrong,” Hill said. “I understand the utilities, but they’re not always looking out for the customer either.”

Hill, who still thinks highly of OG&E, said utilities have to change with the times.

“When I worked for them, there was a big federal push for coal, and now they’re penalizing them for it,” Hill said. “But there wasn’t anyone out here even talking about solar cells or wind turbines when I put this in, so I’m a pioneer in this area.”

Passers-by curious

Hill said passers-by see his wind turbine from the road and stop to ask questions about his wind and solar setup. He sold a farm near Guthrie and used the money to install the systems. Hill said he spent about $78,000, although solar prices have come down significantly since then.

“Some of them around here scoffed a little bit, especially at church,” Hill said. “But what’s the difference in that and taking three or four trips or season football tickets at OSU?”

Hill’s local electric cooperative, Cimarron Electric Cooperative, was more concerned about proper installation than any financial concerns about sending excess electricity back to them. Hill said he spent more on top-of-the line materials and components to make sure everything was safe and reliable.

“It just amazes me how you bring that sunshine in that’s all DC current, it goes through an inverter and comes out 120 volts and 60 (Hertz) cycle on the other side,” Hill said with a chuckle. “It was a little expensive, but they saw I was trying to do the right thing, and I haven’t heard any complaints.

“I’m not here to compete with the electric company. I’m just here to live.”

by Paul Monies
Energy Reporter
Paul Monies is an energy reporter for The Oklahoman. He has worked at newspapers in Texas and Missouri and most recently was a data journalist for USA Today in the Washington D.C. area. Monies also spent nine years as a business reporter and...
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