The PEC Board of Directors today formally approved a new solar interconnection rate (Sustainable Power Credit). The new credit was adopted after more than a year-long public process of cost review, member input, and independent studies.
“The past year’s thorough, deliberative process has resulted in our newly adopted Sustainable Power Credit, which will continue to provide financial incentives for members who choose to invest in rooftop solar without requiring subsidization from non-solar members,” said PEC Board President Emily Pataki. “PEC remains steadfast in its cooperative mission to provide reliable, low-cost power to all members while simultaneously offering a sustainable, long-term member solar generation program.”
PEC’s current power generation credits for solar members were approved in 2016. Since then, advancements with metering and billing software systems have enabled PEC to more accurately measure the true cost of serving its solar members. PEC will conduct a cost of service study every three years in order to ensure all members are charged correctly for their use of the system.
With this new data available, PEC’s Board of Directors recently commissioned an independent “Value of Solar Study” and a separate independent Economic Analysis to determine the benefits and costs gained by the cooperative from members with solar installations.
These calculations revealed that the electric co-op had not been recovering the full cost incurred for serving solar members thus resulting in PEC’s non-solar members subsidizing solar generation members. At a cost of more than $1.3 million for the past year, this subsidy would likely have reached $13 to $20 million in additional costs to PEC’s non-solar members over the next decade if not trued-up.
Currently, about 6,100 PEC members have distributed generation (solar) installations and make up approximately 1.7% of the co-op’s total members. The new interconnection rate will not affect a member’s use of the solar energy produced at their home. It only impacts the credit they will receive for energy that flows back onto the PEC distribution system. The newly adopted Sustainable Power Credit is 5.377 cents/kWh and is greater than what’s offered by many other electric cooperatives across the state. This rate is designed to pay solar members for their excess power at the market value of power plus any system benefit. This means that under the new rate, solar members will be compensated by more than 30% of what PEC pays for average wholesale electricity.
PEC’s portfolio of renewable energy — including solar, wind, and hydro — is one of the largest of any electric cooperative in the nation. In addition to PEC’s solar interconnection program, the cooperative also offers a community solar program where members who don’t have solar installations can choose to use power that comes strictly from solar sources and offers a renewable rider program which allows members to choose power that’s generated only from renewable resources.
A list of frequently asked questions; the “Value of Solar Study” conducted by GDS Associates, Inc.; and the Economic Analysis which verified its accuracy, performed by The Perryman Group, can all be found here.
The new adopted Sustainable Power Credit will go into effect March 1, 2022.