Sparks fly over new fee on rooftop solar producers

Wichita resident Matt Graham spent $20,000 to install solar panels on his home to stabilize electric costs after retiring in a decade.

In hindsight, Graham's investment could be a bust.

He was thrown a curve when the Kansas Corporation Commission embraced a request last year from Westar Energy and KCP&L, now merged into Evergy, to charge solar energy producers a special fee to compensate investor-owned utility companies for maintaining generation plants and a distribution grid serving nearly 1 million customers in Kansas. The assessment on residential solar producers is $3 per kilowatt in winter months, but three times higher during the summer months.

Graham did the math. In July 2018, he would have been charged $72 under the new system to reflect his highest possible daily demand — a cloudy day — from Evergy's grid. During that month, he provided more power to the grid than he consumed via Evergy. If he had turned off the solar panels and purchased all his electricity from Evergy, he would have paid $95 to the company.

"My $20,000 investment in solar would have saved me $23," he said. "It certainly seems that the demand charge is a blatant attempt to kill off the solar industry in Kansas."

That's the view expressed on the Capitol Insider podcast by Graham, Andy Rondon, who works with Lawrence-based solar installer Good Energy Solutions, and by Dorothy Barnett, executive director of the Clean Energy Business Council and Climate and Energy Project. In a companion podcast, Evergy senior vice president Chuck Caisley said customers with residential solar units should share responsibility for sustaining the electricity system.

"One of the things that gets talked about a lot here is the utility companies are doing this to solar customers because utilities want to protect their business model," Caisley said. "This really doesn't have anything to do with the business model and everything to do with the fact that if you are not a solar customer and your neighbor is a solar customer, you're essentially subsidizing your neighbor's electricity."

The fee was retroactive to Westar customers installing solar after October 2015. Customers of KCP&L pay the fee if they flipped the switch on solar after December 2018.

The controversy bubbled to the surface in the 2019 legislative session with hearings on Senate Bill 124, which would reverse the KCC's decision to impose the fee customers with rooftop solar.

Critics of the KCC's action return to the Capitol on Tuesday for resumption of the Senate Utilities Committee's hearing on the bill. The hearing coincides with a Save Kansas Solar Rally with participants wearing yellow T-shirt reading, "Don't Block the Sun on Kansas."

Barnett said Kansas utility companies excelled in developing commercial wind power for economic and environmental benefits provided the state. She said the KCC used its authority to help investor-owned utilities punish the residential solar industry.

It was a baffling turn of events, she said, because the 1,200 Kansas customers producing electricity from solar units in Evergy's territory from Hutchinson and Wichita to Kansas City, Kan., were no threat to company's bottom line.

"What's next?" Barnett said. "Will the natural gas utility begin charging you more if you use a wood-burning stove and don't buy as much natural gas from them? If I invest in insulation, doors and windows or go to Arizona for the winter, will the utilities add new fees to me too since I'm not purchasing as much power from them?"

Rondon, of Good Energy Solutions, said KCC approval of the fee meant more than 50 of the company's clients were subject to the assessment.

"These charges are eating up all their savings," he said. "They're right back to paying what they were prior to going solar."

He said mere discussion of the charge reduced the company's installation work in Kansas by 70 percent from 2017 to 2018. Business on the Missouri side of the state line is sustaining the business, he said.

"When we start to explain to them what's going on, nobody's moving forward. I honestly got a hard time recommending any to move forward in Kansas," Rondon said.

Whitney Damron, who represents the Kansas district of Liberty Utilities, joined with Evergy in opposing the Senate bill. As technology changes and the ability of people to self-generate electricity becomes more affordable, he said, financial implications grow for other customers and investor-owned utility companies. Solar producers should pay for the security blanket provided by utility companies, he said.

"Customers of solar and other renewable energy sources receive a benefit from investing in alternative generation," he said. "However, it must be recognized that as long as customers remain attached to the electric grid, a utility is required to be able to provide for all of their electric needs at all times."