The PEC Board of Directors at its July 16 meeting voted to keep current interconnection rates for solar in place until a revised plan is presented to the board. Staff has been tasked with reworking the interconnection rate plan for members who use PEC’s system to connect their homes to solar, batteries, and wind.
While PEC values its solar members, the cooperative is a nonprofit organization that cannot subsidize any particular rate class. An expert study conducted in 2020 found that historic solar rates were not sufficiently recovering all distribution generation system costs. For 2021, the under recovery figure is approximately $1 million – an amount that is expected to increase annually if the cooperative does not address the issue.
“We have been listening and engaging in important conversations with our members and other interested groups,” said David Thompson, PEC vice president of markets, the business unit that oversees the cooperative’s rate-making process. “At this point, we continue to focus on a solution that balances our need to recover costs for the cooperative with rates that are transparent and applied fairly to all members.”
Leading up to the July 16 board meeting, PEC staff held a series of meetings with members in May, June, and July 2021; they also met with solar installers and other stakeholders, researched possible rate changes, and reported this feedback to the PEC Board of Directors. At this time, the PEC board is making these changes to the solar Interconnect Fees:
- Renaming the Interconnect Application Fee to the Application and Engineering Fee to better reflect its purpose and keeping the amount at $250.
- Changing the name of the current Interconnection Fee to Interconnect Agreement and Inspection Fee to further clarify its objective and reducing the amount from $400 to $250. The reduced fee is the result of the board’s decision to accelerate deployment of the Advanced Metering Infrastructure (AMI) meters for all members, including applicants.
In addition to the immediate action taken by PEC board members, staff will consider incorporating revised distributed generation rates into PEC’s 2022 Rate Plan proposal. Those recommendations will be presented to the board in open session later in the year.
“PEC is not discouraging participation among those who want to install a solar system,” said Mike Viesca, PEC executive vice president of public affairs. “The cooperative model requires that all costs be shared fairly across the membership. It is our obligation to treat all members equitably. That has been our goal throughout this process, and it will remain our priority.”
- 2020 Cost of Service Study (COSS) — Results reveal PEC is under collecting from members who are interconnected to the cooperative’s system. This includes installation for interconnection and fees to establish service, as well as costs for using PEC’s system.
- November 2020 – PEC’s Markets Team presents the 2021 Rate Plan to the Board of Directors in open session; the plan includes a proposed new interconnection fee and rate designed to address the under collection identified by the COSS.
- December 2020 – The final distributed generation interconnection fees and rates are adopted by the PEC Board in open session, with an effective date of January 1, 2022.
- April 2021 — In response to member comments regarding changes to interconnection rates and fees, the PEC Board votes that no changes be made. PEC staff is directed to hold meetings with members for their input. The board also asks staff to research other possible changes to ensure an equitable and sustainable rate, and to present a proposal at its July meeting.
- May – July 2021 — PEC holds three virtual meetings with members to answer questions and discuss concerns. Staff meets with stakeholders and provides feedback to the board.
- July 16, 2021 — PEC Board votes at its July meeting, asking staff to develop a rate plan that balances the cooperative’s need to recover costs with rates that are equitable and transparent for all members.
- November/December 2021 — Staff to present revised interconnection rates within PEC’s 2022 rates plan proposal.
- January 1, 2022 — New rate plan takes effect.