Energy experts call on MI Public Service Commission to conduct new Value of Solar study

Energy experts call on MPSC to conduct a new Value of Solar study

Brief in Consumers’ rate case demonstrates how solar customers are undervalued

Lansing, MI  — Clean energy advocates submitted briefs in the Consumers Energy rate case today, calling on the Michigan Public Service Commission (MPSC) to conduct a Value of Solar study to determine a fair rate for energy that customer-owned solar systems provide the electric grid. Consumers Energy wants to cut the price they must pay for all solar energy that homeowners, families and small businesses send to the grid.

The group of intervenors called the Joint Clean Energy Organizations (JCEO) consists of: the Ecology Center, the Environmental Law & Policy Center, the Great Lakes Renewable Energy Association, the Solar Energy Industries Association, and Vote Solar.

The JCEO submitted testimony from six expert witnesses to make a case to ensure that solar customers are fully and fairly compensated for the value that the solar photovoltaic systems contribute to the grid.

The JCEO witnesses are:

  • Will Kenworthy (Vote Solar): introduction and group recommendations
  • Kevin Lucas (SEIA): analysis of the cost to serve distributed generation solar customers.
  • Claudine Custodio (Vote Solar): analysis of customer load data.
  • Gabe Chan (University of Minnesota): discussion of Minnesota Value of Solar process.
  • Karl Rábago (Rabago Energy, LLC): principles of ratemaking applied to distributed generation.
  • Ronny Sandoval (ROS Energy Strategies, LLC): discussion of value of distributed generation solar to the distribution grid.

“MPSC has all the data they need to conduct a thorough and accurate study,” said Will Kenworthy, Regulatory Director at Vote Solar. “Michigan residents shouldn’t have to rely on inherently biased monopoly utility valuations that short change solar producers. It’s the MPSC’s responsibility to provide a fair and accurate accounting that serves all Michigan residents.”

This is the first-rate case for Consumers Energy since the popular solar net metering program ended in 2016. Net metering is a compensation structure for solar customers where energy they send to the grid is credited against their usage 1:1 over a set period of time. DTE Energy implemented a new rate structure for solar customers in 2018 to replace net metering.

Consumers Energy is proposing to compensate solar producers 46% less than what it charges the same customers for electricity. The Company’s proposed compensation is also 65% lower than the compensation rate calculated by SEIA’s Kevin Lucas using the Company’s own Cost of Service Study. Testimony from energy expert Karl Rábago found that Consumers’ proposal is not based on real costs, and undervalues solar’s many benefits to the grid.

“If Consumers Energy truly believes in Michigan’s clean energy future, it must empower its customers to unleash solar. A Value of Solar study is a critical step toward that clean energy future, and one that states as diverse as Nevada, Maine and Mississippi have already taken,” said Environmental Law & Policy Center Staff Attorney Nikhil Vijaykar. “If Michigan wants to be competitive in a sector that can cut ratepayers’ bills while creating local jobs, the MPSC needs to act now.”

MPSC’s Value of Solar study would impact rates for all customers, not just those in Consumers’ territory. Without the study, every utility must come up with its own system for deciding the value of solar and go through the rate-making process. The decision, in this case, will impact all new solar customers and any existing solar customers once their system reaches 10 years of age.

“Local solar energy producers reduce the need for expensive new distribution and transmission wires, provide local energy resources and increase grid resilience,” said Ronny Sandoval, ROS Energy Strategies. “We make the case that those are valuable contributions that should be included in the compensation calculations. If MPSC undergoes a fair study of the Value of Solar we are confident they will agree.”

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