Kansas Grapples With Utility Over Solar Panel Charges

WICHITA, Kansas — The largest utility in Kansas wants to charge customers with solar panels about $25 a month, even if their homes pull almost no electricity off the grid.

If courts and regulators reject that idea, power-provider Evergy’s backup proposal would ensure all customers — not just those harvesting power on their roofs — pay a minimum of $35 a month just for plugging into its system.

For most customers, that charge wouldn’t matter, because they already pay at least $35 a month for energy consumption. But many households don’t use that much electricity, so they’d be paying more.

Evergy, the largest electric utility in Kansas, needed to make a plan because the Kansas Supreme Court shot down a previous solar rate. Meantime, the utility insists it needs to recover the cost of having electricity on demand for solar-equipped homes that don’t buy many kilowatts.

But solar advocates who challenged the original plan say the new one is the same thing in a different wrapper. They also argue it could stall the development of renewable energy gains at the customer level, just as tax breaks fade away and the cost of solar technology sits within reach of a much larger market.

Evergy’s leading plan would charge every customer a grid access fee of $3 per kilowatt of solar panels installed.

An average house with solar panels has between 7 and 10 kilowatts, which would add an extra $20 to $30 a month to a bill.

“They’re basically just trying to discourage anybody from investing in solar,” said Matt Graham, a solar user in Wichita. “And if you’re going to invest in solar, they certainly don’t want you to put a lot up.”

Graham has had solar panels on his house since about 2015. He said it’s unfair that Evergy would make him pay more money for reducing demand on the company’s system. He also said the constant rate changes make him want to disconnect from the grid entirely.

But Evergy argues people like Graham aren’t paying their fair share, that the connection fee would protect non-solar customers from subsidizing them. The larger the solar array, the less that customer typically pays to Evergy. That leads to small or non-existent monthly bills that don’t cover the fixed costs of connecting someone to the grid and keeping a steady supply of power on demand for those times — like at night — when even solar-powered homes need more juice.

“It’s only fair that within the solar customer class that the bigger solar panel customers pay more,” said Ahmad Faruqui, an economist with the Brattle Group who was hired by Evergy to provide testimony to state regulators.

The proposed plan comes after the Kansas Supreme Court declared the old plan, which had solar users pay a special demand charge in addition to the typical service and usage fees, discriminatory and against the law.

Evergy said the proposed grid connection fee doesn’t discriminate against solar users because it will be charged to every customer, even those without solar panels.

It’s just that customers without solar panels would be charged $0, since $3 per kilowatt installed times zero, is zero.

“As a practical matter,” Faruqui said, “it only collects revenue from customers who have a solar panel.”

But solar advocates say it has the same effect as the previous rate, and goes against the intent of the Kansas Supreme Court.

“We’re really scratching our heads on this one,” said Zack Pistora, a lobbyist for the Kansas Sierra Club. “It’s still discriminatory.”

The Sierra Club was one of the parties involved in the challenge of Evergy’s previous solar rates.

If state regulators agree with the Sierra Club’s opinion that a grid access fee is still discriminatory, Evergy offered a backup plan.

Instead of a grid access fee, the company would simply charge everyone a minimum bill of $35. So, no matter how little energy you use, you’re at least paying $35 a month. Most people won’t notice, because their bill is already more than $35 dollars. But for some low-income households who use little electricity, it would increase their bills.

“It is egregious to me that the utility thinks those are the people that we need to impact,” said Dorothy Barnett, executive director of the Climate and Energy Project, an clean energy advocacy group.

In Evergy’s filing at the Kansas Corporation Commission, the company said the number of people who would be impacted would be minimal. In 2016, about 140,000 bills in low-income areas were less than $35 dollars.

Bradley Lutz, Evergy’s director of regulatory affairs, said in testimony filed at the KCC that if the company can’t charge solar customers exclusively, then everyone will have to pay the difference.

Pistora of the Sierra Club said the minimum bill is a lot more likely to meet the non-discriminatory mandate from the Kansas Supreme Court, but he finds the plan inequitable and injust.

Barnett worries that a minimum bill would only be the beginning of more rate increases. She points to a part of Evergy’s testimony that said even though it’s only asking for $35 a month, the actual minimum bill needed to meet fixed costs for the system is about $77 a month.

“Are we going to see more and more attempts to chip away at what they say they need on a monthly basis from every customer?” Barnett said.

But Faruqui, Evergy’s outside expert, said the rates can’t just stay where they’re at if you want to eliminate customers subsidizing solar users. The state supreme court’s mandate that the solution be non-discriminatory makes that challenging.

He points to New York and California as states that found middle ground in combining additional fees and varying rates.

“If they can make peace with that in two of the biggest states in the country,” he said, “they have to make peace with that in Kansas.”

State regulators will hold a virtual public hearing on the proposed rates at 6 p.m. on Nov. 5. Those who’d like to speak at the hearing need to register in advance. The KCC will also be accepting written public comments through Dec. 21.

Brian Grimmett reports on the environment, energy and natural resources for KMUW in Wichita and the Kansas News Service.