Environmental group raises concerns about proposed demand charge
Eversource is proposing special charges for customers with solar installations to make sure they pay their share of the cost of operating the power grid.
The proposed charges are contained in Eversource’s rate filing, which is under review at the state Department of Public Utilities. The utility says the charges are needed because many solar customers produce more power than they use, which allows them to escape paying their share of the power grid’s fixed costs.
The proposed new charges for homeowners with solar installations coincide with a push by the Baker administration to cut in half the subsidies paid by electric ratepayers to solar developers. The overall cost of solar incentives paid by ratepayers through their electric bills has been running at $400 to $500 million a year (or 40 to 50 cents a kilowatt hour), and the new plan is expected to cut that in half, Baker administration officials said. The new plan is intended to spur the development of the next 1,600 megawatts of solar capacity.
Reducing the size of solar incentives and assessing higher charges on customers with solar installations are policies that have been high priorities of Massachusetts utilities. The utilities say they are merely trying to keep electric bills reasonable and fairly distribute costs among customers. But environmental advocates have suggested that solar power is a long-term threat to companies like Eversource, which rely on customers who want electricity delivered to their homes rather than customers who produce their own power.
Bills for electricity typically have two types of charges – a fixed monthly customer charge that recovers the cost of connecting a home to the grid and per-kilowatt-hour charges for everything else. Homeowners with solar installations on their roofs don’t fit neatly into this billing system because they produce much of their own electricity and receive net metering credits when they sell electricity into the grid. The credits are valued at the retail price of electricity, so homeowners can use the credits to offset the cost of electricity being drawn from the grid when the sun isn’t shining.