Regulators to review fees on residential solar arrays

After fielding complaints about high fees on residential solar arrays, Minnesota regulators will review charges set by the state's electric utility co-ops.

The review pivots on the fees that residential solar users pay to connect with an electric utility's grid. It's an issue nationally as rooftop solar increases in popularity. Here in Minnesota, it's particularly a factor for rural co-ops.

The Minnesota Public Utilities Commission opened a review last Thursday into the co-ops' grid connection charges. It also ruled that any new charges must be approved by the PUC, although current fees filed with the commission can remain during the review, said Daniel Wolf, the commission's executive secretary

The PUC shot down the co-ops' argument that it had no jurisdiction over the fees.

"It's a huge victory for us," said David Shaffer, an attorney for the Minnesota Solar Energy Industries Association, a solar trade group.

Last year, state law was amended so that electric cooperatives could charge an additional fee to customers who produce their own solar power.

The fee is meant to recover some of the utility's fixed costs in serving that customer. Residents with their own solar arrays at times produce power that flows into the grid, while at other times they draw power from the grid.

"They are using the grid differently," said Jim Horan, a lawyer for the Minnesota Rural Electric Association, a trade group for about 45 co-ops. "They are using the grid as a backup battery system."

The solar energy industry has blanched not so much at the fee, but its size, claiming the co-ops are trying to recover lost revenue, not just cover fixed costs.

Shaffer said one co-op has charged $83 a month to residential solar producers, while the median is around $35 a month. High fees can make rooftop solar cost prohibitive, he said, noting that investor-owned utilities like Xcel Energy charge around $5 a month.

Horan said that the co-ops' monthly fee is usually $20 to $25, and that his industry faces greater cost challenges than investor-owned utilities. Because co-ops serve sparsely populated areas, they have higher fixed costs per customer, he said. Horan's group represents co-ops ranging from 2,000 to 120,000 members.

Co-ops, which are owned by their members, set their rates and don't need PUC approval for general rates cases, as do investor utilities. But the PUC ruled that under the state's energy conservation improvement law, it has the power to review the co-ops' solar interconnection fees.

Still, where the review leads could be a touchy matter.

"I think we have the authority to investigate the [solar fee] methodology," Dan Lipschultz, a PUC commissioner said at a PUC meeting Thursday. "But whether we have the authority to choose one methodology over another is another matter."

Mike Hughlett • 612-673-7003