Queen Greene of Roxboro, North Carolina, was among the many Duke Energy customers who spoke out this year against the company’s proposed rate hike. 

“I should not have to choose between food this month and how much electricity I can use,” Greene said at a March public hearing in her hometown, about 30 miles north of Durham. “Why should I have to choose to be cold during the winter and hot during the summer?” 

Even when Greene turned her thermostat down or off this winter, she still owed more than $100 each month. “I got one-time help of $400,” she said, “but that doesn’t help me if the bill keeps going up and up.” 

A new customer assistance program could lessen the blow for households like Greene’s. 

Part of a side deal between the utility and clean energy advocates, the program will give a $42 monthly discount to tens of thousands of ratepayers — automatically enrolling anyone who received one-time bill payment assistance for 12 months. 

The deal, which is endorsed by the state’s ratepayer advocate and social justice groups, also requires shareholders to contribute millions of dollars to urgent home repairs that can help leverage federal grants for improvements that reduce energy waste. 

The stipulation covers both Duke utilities in North Carolina, but regulators have only ruled so far on rates for Duke Energy Progress. Testimony continued this week in the Duke Energy Carolinas petition to raise prices. 

While advocates criticized the Duke Energy Progress rate hikes as too steep, they praised commissioners for ordering the new program and the infusion of cash they negotiated. 

“In North Carolina, too many households struggle to pay their energy bills,” Mikaela Curry, field manager for the Sierra Club, said in a statement. The affordability stipulation, she said, may “ease the burden of keeping the lights on for these ratepayers and their families.” 

‘Wildly insufficient’ 

Decades of redlining and other discriminatory housing policies mean people of color and low-income people are more likely to rely on old appliances and live in homes built before the advent of energy conservation codes — driving their monthly utility costs past the point of affordability.  

The problem is especially acute in the South, where one in three households strains to pay for heating, cooling and powering their homes, according to the Southeast Energy Efficiency Alliance. 

When regulators greenlit Duke rate hikes two years ago, they ordered the company to work with stakeholders to examine the energy burden within its customer base. The results align with regional and national trends.

Nearly a third of Duke’s 3 million North Carolina customers are at or below 200% of the federal poverty level, earning $60,000 or less for a family of four. Almost half a million residential customers meet the company’s definition of “arrears struggling,” having fallen significantly behind on their monthly bills even before the pandemic.  

The company found that its poorest customers and those who struggled to pay their monthly bills tended to use more kilowatt-hours per square foot than wealthier households. “Additionally,” the report stated, “a correlation may exist between higher usage and bills and inefficient housing, heating, and cooling systems.” 

Duke does have some initiatives designed to help these customers, but they’re widely viewed as inadequate. A small program launched in 1978, for example, offers 10,000 older, low-income Duke Energy Carolinas customers a monthly bill credit of $3.17 — a tiny fraction of the average bill of $115.

“It was just wildly insufficient,” said Claire Williamson, energy policy advocate with the North Carolina Justice Center, one of the stakeholders that worked with Duke on its report. 

Duke Energy Carolinas, which includes Charlotte and most of the state’s Piedmont region, also has its own weatherization program, offering attic insulation and other improvements to reduce energy waste to qualifying households at no cost. In Duke Energy Progress territory — eastern North Carolina and parts of the Asheville area — customers can apply for federal weatherization funds administered by 20 community organizations around the state. 

Yet even after a series of federal laws doubled the latter, the volume still pales compared to the need. In Fiscal Year 2021, about $18 million helped just over 1,400 households with added insulation, air seals, and other energy efficiency improvements. 

That’s in part because weatherization programs face a host of challenges beyond the availability of funds. Most notably, they can’t cover certain critical repairs that must be made before weather stripping can be applied. 

“You can’t put in ceiling insulation if there’s a hole in the roof,” said David Neal, a senior attorney with the Southern Environmental Law Center, which represented the Justice Center, the North Carolina Housing Coalition, Natural Resources Defense Council, the Southern Alliance for Clean Energy, and Vote Solar in the rate case settlement.  

‘A really good deal’ 

The affordability stipulation helps overcome some of these challenges. First, there’s the infusion of $10 million over three years into urgent repair. Provided by Duke shareholders, that money can help households leverage the burst of federal weatherization funds coming into the state. 

“This is a once-in-a-generation investment,” Williamson said of the federal monies allocated from both the Inflation Reduction Act and the Bipartisan Infrastructure Law. “Having additional funds to go to health and safety repairs can really help unlock more dollars.” 

Another $6 million from shareholders will go to the company’s Share the Light Fund, which assists customers who are behind on their bills or need money to reconnect or start a new Duke account, regardless of income. 

“This is a really good deal for North Carolina low-income customers,” Neal said, “because the additional funding that’s going to come from shareholders isn’t going to affect rates.” 

Second, the Customer Assistance Program could set the stage for long-term change even after the spurt of federal dollars has eased.  

The program will target customers who’ve been aided by the Crisis Intervention Program, designed to prevent or reverse life-threatening emergencies like utility shut-offs, and the Low-Income Heating and Energy Assistance Program, which offers one-time payments to ratepayers with overdue bills. The federally funded initiatives are limited to customers at or below 150% and 130% of the poverty level, respectively. 

Based on past CIP and LIHEAP data, the company expects some 124,000 North Carolinians could benefit from the Customer Assistance Program each year. Automatic enrollment of these households, Duke says, is key. 

“This important design feature will help minimize administrative costs, maximize participation, and create an easy, seamless customer experience,” said Brad Harris, rates and regulatory strategy director for Duke, in testimony before the commission. 

‘Close to best practices’ 

The $42 monthly bill credit, which customers will receive for one year, was designed to ensure the average participant would pay no more than 5% of their income on electricity. Importantly for Duke, customers would pay a $14 minimum charge no matter what to cover utility poles and other fixed costs. 

For Greene in Roxboro and the average customer, the flat credit would more than offset rate increases in both Duke Energy Progress and Duke Energy Carolinas territory. Participating customers would also receive an automatic referral to weatherization programs that could help reduce their bills even further.  

After a three-year trial period, the hope is to expand the program to even more customers and offer graduated benefits based on income. “The customer assistance program is an innovative, new rate design that we hope to build on,” Neal said. “It’s the first time we’ve had something at this scale.”

The program could also give a needed boost to a utility that’s middling at best when it comes to energy efficiency, said Justin Somelofske, the attorney who represented the Sierra Club in the settlement. 

Outside the Southeast, “there­­­­­­­­­­ are many other states that are much more advanced in terms of implementing these bill-pay programs,” Somelofske said. “Duke is now entering the conversation of being close to best practices.”

As Duke Energy rate hikes loom in N.C., deal could lessen blow for energy burdened is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

As Minnesota regulators weigh a proposed 21% electricity rate increase by Xcel Energy, a new voice is at the table.

The Just Solar Coalition is an alliance of solar developers, community organizers, environmental groups, faith leaders and others who share an interest in expanding access to clean energy and its economic benefits. 

The coalition formed in 2014, but this is the first utility rate case in which it sought and was granted “intervenor” status. That means its members — primarily small nonprofits with limited staff and resources — can participate in proceedings alongside the larger consumer and environmental groups that typically provide counterarguments at the Public Utilities Commission. 

With that formal seat, the coalition hopes to persuade state regulators to consider equity and justice as the regulators decide how much additional money they should allow Xcel to collect from its Minnesota customers.

“We think that the increase of 21.2% is an overreach by Xcel,” said Julia Nerbonne, executive director of Interfaith Power & Light, a faith-based clean energy group that organized the coalition. “For middle- and higher-income Minnesotans, this may not seem like a big deal, but it is a big deal for a lot of low-income people in Minnesota.”

Xcel has said it needs capital to meet its target of transitioning to 100% carbon-free electricity by 2050. In its rate case, the utility cites the need for investments in renewable energy and its distribution grid, as well as continued expenses related to its two nuclear power plants. It’s also seeking a bigger budget to improve customer service and prepare for transportation and heating electrification. 

The rate hike would help pay for the addition of 6,000 megawatts of renewable energy and battery storage over the next 15 years and to modernize an aging grid that will have to absorb more distributed energy generation.

Greg P. Chamberlain, Xcel’s regional vice president for regulatory and government affairs, last year wrote in testimony to regulators that “our vision — and plan for achieving it — assures safe, reliable, clean and affordable electric service while at the same time creating opportunities for [customers] to benefit from new technologies and services.” 

Interfaith Power & Light created the Just Solar Coalition with several partners. The organization focuses on creating access to clean energy for all income levels through education, policy work, and building solar projects such as a community solar garden in North Minneapolis. The 10-member coalition includes groups working on climate and environmental issues such as Honor the Earth, Climate Generation, the Sierra Club North Star Chapter and the Rural Renewable Energy Alliance.  

The Just Solar Coalition argues that the increase is too severe for many customers, especially low-income ratepayers suffering higher costs due to inflation. They question the utility’s grid investment plan and justification for increasing its return on equity for investors.

Based on data Xcel provided the commission, the coalition’s analysts estimate the rate hike would increase electric bills by $140 to $240 annually and flat fees would jump 15% to 18%, hurting customers who use less energy. Xcel wants its return on equity to jump from 9.06% to 10.20%, which has also led to criticism from the coalition and other intervenors.

Residential customers would pay a disproportionate share of the rate bump compared to commercial customers, the coalition argues, and it believes Xcel’s grid investment plan locks in outdated technology. 

Some of the coalition’s arguments are shared among several advocacy groups, including the Citizens Utility Board, the Energy CENTS Coalition, the Minnesota Center for Environmental Advocacy, and Fresh Energy (publisher of the Energy News Network). Other advocacy groups also want a more equitable rate that considers the ability of low-income customers to pay. Many question Xcel’s proposal to raise the return on equity and the increase in fixed rates for residential customers. 

What differentiates the Just Solar Coalition has been to bring together organizations that otherwise would not have the staff time or financial resources to participate. For example, no other organization represents religious concerns, a national solar group or a community solar garden developer focused on underrepresented communities. The coalition wants more diverse voices to be heard at the commission and has acted during the rate case to promote that cause. 

Xcel has been holding meetings to gather customer input on the rate increase. In October, the first month it conducted public comment sessions, none were held in St. Paul or Minneapolis. The Just Solar Coalition brought the issue to the attention of the Public Utilities Commission. 

A spokesperson said Xcel “erred in not initially including Minneapolis and St. Paul for public hearings” and confirmed meetings were added. Xcel had to reschedule another virtual gathering to Dec. 9 after suffering technical problems during an earlier one.

Joshua Lewis, climate justice organizer with Minnesota Interfaith Power & Light, said the coalition knocked on more than 2,500 doors in North Minneapolis and St. Paul’s Frogtown, both disadvantaged neighborhoods, to get residents to sign petitions against the rate increase and to encourage their testimony at the commission’s events. 

“These are people living paycheck to paycheck and are most vulnerable to these increases, and it [the meeting times] makes it much more difficult for them even to participate, to get their voices to be heard,” Lewis said.

Just Solar Coalition members say they believe their participation matters. Will Kenworthy, Vote Solar’s Midwest regional director, said coalition members expressed frustration with their representation in regulatory proceedings. “Participating as a party in the proceeding gives you a lot more access and makes your voice much stronger in the decision-making process,” he said.

Alice Madden, who works for the energy democracy group Community Power, said she must be selective when deciding whether to expend the resources necessary to testify in commission cases. Rate cases are expensive and time-consuming. However, through the coalition Community Power believes it will have a louder voice at the commission.

Timothy DenHerder-Thomas, general manager of the solar developer Cooperative Energy Futures, helped found the coalition to promote equity and justice in the clean energy industry. He said Cooperative Energy Futures could have obtained “intervenor” status but having an impact would have been challenging.

“I think a rate case is complex and onerous,” he said. “It’s different from most other dockets. And you really have to have intervenor status to be in most of the process, which is much more time and financially intensive than most dockets.” 

The coalition wants the commission to begin looking at rate cases through equity lenses, a conversation that is happening in several other states, as well. A 2021 study by the Institute for Market Transformation found that 10 states require equity to be part of regulatory decisions. In November, the Michigan Public Service Commission ruled in a DTE rate case that it now expects utilities to incorporate equity into their spending and investment decisions.

Minnesota’s regulators could require the same, said University of Minnesota associate professor Gabe Chan, an energy expert at the Humphrey School of Public Affairs. Chan, who testified on behalf of the Just Solar Coalition, argues that federal and state statutes have long required that regulators use the rationale of “just and reasonable rates” when deciding rate cases. 

The commission “definitely has a lot of flexibility to think about what just and reasonable means,” he said.

Regulators always deem utility rate issues as contested cases and assign an administrative judge to collect testimony and data. The Public Utilities Commission continues to hold hearings on Xcel’s rate case. Chan said rate cases typically resolve in a “settlement” between the groups opposing the increase and the utility.

Next year the commission will review the rate case. It has already granted Xcel a preliminary increase of 6.4% this year and will decide by June 2023 how much more the utility will receive.

Correction: A 2021 study the Institute for Market Transformation found 10 states require utility regulators to consider equity in decision making. An earlier version of this story misattributed the study’s author.

Solar coalition wants to put equity front and center in Xcel’s Minnesota rate case is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Advocates in Michigan say unprecedented public engagement helped push state regulators to reject most of a utility’s proposed rate increase last week. 

At an August public hearing, ratepayers and consumer advocates laid out a case that DTE Energy already had plenty of money to improve service, a point of contention following major power outages over the last two years. 

The Michigan Public Service Commission agreed, approving a $30.5 million rate increase for DTE Energy’s electric customers on Friday, rejecting 90% of what DTE had asked for. The new rates will mean a monthly bill increase of 71 cents, or 0.78%, for a typical electric customer consuming 500 kilowatt-hours of electricity per month.

The MPSC also rejected DTE’s proposal to reduce the payments it makes to solar customers.

In the 606-page order, the MPSC laid out many reasons for only approving a fraction of DTE’s requests. Chief among them, according to their press release, was that residential customer bills provide the company with sufficient money to run their business, invest in clean energy, and upgrade the electric grid. The commission noted that residential electric sales surged in 2020 and 2021.

DTE responded to a request for comment with the following statement: “DTE’s efforts remain focused on improving reliability and maintaining affordability for our customers. We are reviewing the order and its implications on our future investments in Michigan and look forward to continuing our work with the MPSC.” 

The decision came after a season that saw widespread outages during August thunderstorms, where more than 900,000 customers lost power, some for up to a week.

“DTE has been asking its customers to pay more and more for deteriorating and outage-prone electric service,” Amy Bandyk, executive director of the Citizens Utility Board of Michigan, said in a statement. “The MPSC agreed with CUB, the attorney general, and others that, in many instances, DTE failed to do its homework and prove that its spending requests were in the best interests of ratepayers.”

The case saw an unprecedented amount of public engagement. For the first time in recent memory, the MPSC held a public hearing in the case in response to public outcry. More than 200 people attended the August hearing, the vast majority calling on the MPSC to reject the increase. 

“As far as anyone at the MPSC remembers, the commission hasn’t held public hearings on rate cases in the past,” MPSC spokesperson Matt Helms told Planet Detroit. 

Independent consultant and activist Jackson Koeppel credited that engagement with producing the case’s outcome.

“This is a good indication that the commissioners are stepping up to be consistent and holding utilities accountable,” Koeppel told Planet Detroit. He added that even the approved increase is too much: “The number should have been zero.” 

The case marks the lowest amount approved in a DTE Energy electric rate case in at least the past decade. The MPSC typically approves a portion of proposed rate increases and has demonstrated a willingness to reduce them substantially in recent years.

Win for solar owners

The commission rejected DTE’s proposal to reduce the return it pays to distributed generation providers, such as rooftop solar owners, and its proposal to place a demand charge on those customers.

Under a law passed by the Michigan Legislature in 2008, investor-owned utilities must connect distributed generation resources such as solar panels to the grid up to 1% of the utility’s average in-state peak load — the maximum electric load carried by the system during times of high demand — for the past five years. 

In its order, the commission adopted MPSC staff’s proposal, which increases the payment to solar owners by about two cents per kilowatt-hour, according to John Richter, a senior policy analyst with the Great Lakes Renewable Energy Association and an intervener in the case. 

“In this rate case, DTE tried to make solar energy uneconomical for homeowners and businesses. DTE knows they can’t compete with solar and don’t want to lose sales, so it is trying to eliminate the solar market in Michigan by raising fees and reducing the price they pay for solar energy,” Richter said. “The commission wisely rejected this choice of either crushing the economics of rooftop solar or allowing the cap on participation to close the opportunity for homeowners and businesses to supply their own energy needs.”

The order pushed DTE one step closer to embracing community solar by directing the utility to supplement its voluntary green pricing application before the commission with a straw proposal — an initial proposal that would be vetted before it becomes a final proposal — for a community solar project within 90 days.

The action would “serve as a starting point for the parties’ discussion and litigation in the voluntary green pricing proceeding,” according to the order. 

Michigan League of Conservation Voters president Keith Cooley lauded the order.

“Everyone, low-income or not, can benefit from better access to renewable solar. DTE has been slow to accept community solar projects. In this order, the Michigan Public Service Commission told DTE to issue a proposal for community solar. That’s a move in the right direction.”

Editor’s note: This is an abridged version of the full article from Planet Detroit, which includes more details about the rate case.

Michigan regulators reject most of DTE’s rate increase following public pushback is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

A proposed rate increase by We Energies is facing pushback from community groups that say the Milwaukee utility is failing to meet its legal obligation to provide affordable power.

The 13% electricity rate increase would fund new utility-scale solar and natural gas generation. The rate case by We Energies’ parent company, otherwise known as WEPCO, is currently before the Wisconsin Public Service Commission.

State regulators are exploring whether the utility is earning unjustified profits, while ratepayer advocates say the rate hike would force some families to choose between paying rent, medical bills, or other costs. 

“Basically they are out of compliance — they’re not meeting the affordability requirement that’s set by state law,” said Antonio Butts, executive director of the community organization Walnut Way, which represents the Lindsay Heights neighborhood and is an official intervenor in the rate case. 

Black and Latinx residents who have long disproportionately suffered the impacts of pollution from We Energies’ Oak Creek coal plant are especially frustrated that they are being asked to shoulder the cost of renewables and natural gas generation even as the coal plant is going to keep running longer than originally planned, through 2025, as We Energies announced in June. 

Walnut Way and the environmental group Clean Wisconsin have refused to sign a settlement agreement among stakeholders filed on Oct. 3 as part of the rate case. Citizen Action of Wisconsin, the Sierra Club, and Wisconsin Health Professionals for Climate Action are also opposing the proposal, though they don’t have official stakeholder status in the proceedings. 

Other advocacy groups agreed to support the proposal, including the Citizens Utility Board — which supports the extension of low-income programs included in the proposal and a pilot program for income-based payments. And Renew Wisconsin supports metering changes that will facilitate distributed solar. The proposal also promises to securitize $100 million of debt from putting environmental controls on the Oak Creek coal plant, a move the Citizens Utility Board has long pushed for as it reduces the debt that will show up on ratepayers’ bills. 

Labor unions, the sewerage district and Walmart also supported the proposal, because of promises on jobs and rates that benefit them. Citizens Utility Board Executive Director Tom Content said the group is upset that We Energies revised a previous proposal for an 8% electricity rate increase for residential customers — boosting that increase while lowering the increase for large industrial customers to 6.4% 

Public hearings on WEPCO’s proposal were held in late September, and an additional hearing will be held on Thursday in Milwaukee. Public comments can be submitted online through Nov. 7. WEPCO asked the commission for an expedited public input process, so the rate case can be resolved by the end of the year. 

Excess profit? 

While the Citizens Utility Board (CUB) is pleased with the securitization and other provisions it describes as victories for low-income ratepayers, the organization is demanding WEPCO reduce the profits it reaps from investments including on three solar farms it plans to acquire. Content said that WEPCO receives a bigger share of profit from its investments than most utilities nationwide, a situation that is being examined as part of the rate case. 

CUB has pointed to a recent study by the Energy Institute, which explains that utilities nationwide have overcharged customers by anywhere between $2 billion and $20 billion a year, guaranteeing profits to shareholders higher than the amount that would be needed to attract investment in their stocks. The study surmised that this has happened in part because state regulators are quick to grant increases in profit when the market is shaky, but regulators don’t reduce rates of return when shareholders are being overcompensated. 

CUB has suggested that rates of return for We Energies and Wisconsin Public Service Corp., another WEPCO subsidiary covered in the rate case, be reduced from 10% to 9%.

“If CUB prevails, the size of the increase will be much lower — we have the potential to save tens of millions of dollars,” Content said. 

WEPCO spokesperson Brendan Conway said this is only the second time in eight years that We Energies has requested a rate increase, and that “the average residential bill would remain well below the national average and in line with the Midwest average.” 

“Of course, the investments we are making in a sustainable energy future are — under the Wisconsin regulatory system — recovered through customer rates,” Conway said. 

In its filing, We Energies says that between 2020 and 2023, it will spend about $1 billion on its transition from coal to natural gas and renewables. The cost includes acquiring a natural gas plant and an interest in the Badger Hollow II solar farm and two other solar and battery projects, called Paris and Darien. The three solar projects are being developed by Invenergy and would provide hundreds of megawatts of clean power for customers of We Energies and central Wisconsin utility MGE. The Public Service Commission has not yet granted WEPCO permission to recover its investment in the Darien project. 

Content said that solar is a good investment, including with ratepayer funds, but the share of profit the utility gets should be reduced — especially considering that it stands to benefit from continuing to run the coal plants. 

“Solar for several years in a row has been the lowest cost of generation — that’s why utilities are moving so aggressively to implement solar,” Content said. “There are definitely cost savings from implementing solar, but whether utilities should keep profiting on old coal plants, and continue to earn profits that are far above the national average, wasting customers’ money — it’s excessive for customers to have to shoulder that.” 

Difficult choices 

CUB was pleased that the utility agreed to extend its bill forgiveness program for low-income customers, known as LIFT, through 2025; forgive late fees and other costs incurred during a shut-off moratorium during the pandemic; and develop a pilot program that would allow residents to pay a percentage of their income for energy. The utility also agreed to design a “bring your own device” demand reduction program similar to one being used by MGE. That would credit residents for using smart thermostats and other devices that lower energy use during peak demand times. 

The rate case proposal also reduces the monthly fixed charge on bills, from $16 to $15 a month for We Energies customers and from $21 to $19 a month for Wisconsin Public Service customers. Walnut Way organizers say that while this helps, it’s not enough. 

Lindsay Heights community organizer Maria Beltran, 50, is caring for two grandchildren; their father’s utilities have been cut off for two months, she said, as he’s been unable to pay bills but has an income too high for state energy bill assistance. 

“It’s just a mess; it’s a cycle that goes on and on and on. If you’re the working poor you can’t pay these bills,” she said. “I’m on disability, I’m on a fixed income, we’ve gone through this pandemic, we’re still in one, and everything has gone up.” 

Beltran, like Butts, called on We Energies to engage more directly with the community.   

“We have a meeting every Tuesday at Walnut Way, if they can come out there and talk to the residents, once a month at the very least, to inform them of all the stuff that’s going on, not just when our energy is cut off,” she said. 

The fact the coal plant will keep running adds injury to insult, as she and others see it. Beltran raised seven kids in a home close to the coal plant. 

“We’re all asthmatic. I remember the air was garbage,” she said. “We have to have renewables,” but shareholders rather than residents should pick up the cost of the transition, she said. 

Clean energy for whom? 

Cesár Gumeta, 29, feels caught between the need for clean energy and the inability of many residents to pay for the transition. 

“Every winter we see a spike [in bills] as it is — a rate increase will force us to choose between paying bills for energy, rent, food or my medications,” they said. “I have asthma — having fossil fuels, whether it’s coal or gas, really affects me. I have air quality alerts on my phone, and on days the air quality is bad, my sneezing and wheezing makes it difficult. The fact we’re still going to be dependent on fossil fuels is concerning. We see the effects of anthropogenic climate change in Wisconsin; we have more extreme weather events every single year.” 

Gumeta, who has lived in Milwaukee for 22 years, notes that immigrants like them are especially impacted by both fossil fuel pollution and energy bill burden. They noted that more access to distributed solar would help on both fronts, though We Energies has also long backed policies that make rooftop solar difficult to access, as many advocates see it. 

Much of “the labor force here is immigrants and undocumented people,” Gumeta said. “Whether it’s energy assistance or programs that help finance and resource solar and renewables for families … making sure everybody is taken into consideration is very vital.”

While Butts supports rapid decarbonization, he emphasizes that energy from a solar farm isn’t helping residents if their utilities are cut off because We Energies isn’t meeting requirements to provide affordable power. Making rooftop solar more accessible, meanwhile, could help people save on energy bills while also decarbonizing.   

“You have billions going into solar farms — that same kind of investment could be made in solar on residential roofs across Milwaukee,” he said. “In Milwaukee we find more extraction going on than value being added” by the utility. 

Addressing inequity

A 2016 analysis by the American Council for an Energy-Efficient Economy found that in Milwaukee the average White household pays 2% of its income to energy, while the average Black and Latinx families pay over 5%. One in four Black families in Milwaukee pays over 15% of its income to energy, the study found. 

Meanwhile, a study by the Sierra Club showed how high energy burden is concentrated in certain neighborhoods with high Black and Latinx populations that are also disproportionately affected by evictions, and poor energy efficiency in homes in these areas mean that the households that are least able to afford high bills are actually paying significantly more for energy. Those with an energy burden over 6% pay an average of $2,240 a year for energy with average household incomes of $32,000, the Sierra Club found, while those with lower energy burden pay an average of $1,930 a year but have an average annual income of $80,000. 

Physician Victoria Gillet, a member of Wisconsin Health Professionals for Climate Action, said she feels like low-income residents are suffering because of the utility’s failure to invest in energy efficiency and clean energy much sooner.   

The projected revenue gap “definitely could have been closed a lot sooner if they had been more intentional about bringing clean energy on,” Gillet said. “The rates are increasing so dramatically despite the fact that We Energies has very reasonable profit margins. It might feel justifiable if I trusted them to do responsible things with the money they are receiving, but I feel pretty much like anything that is in the best interest of public health they end up going back on it. I feel like it’s giving money to shareholders and not doing anything to serve the public.”

Butts feels like We Energies is pitting low-income residents against clean energy proponents, rather than committing to “co-create” an energy future with residents. But he said that We Energies will have no choice but to listen to residents in the future.

“We Energies executive leadership and shareholders should be aware the regulatory environment in Milwaukee is about to change. It is actually changing already,” he said. “It will no longer be business as usual in terms of the marginalization and discriminatory practices and lack of capital investment in communities where the majority of ratepayers are. Milwaukee has a voice — that voice is growing and it will be heard.”

Wisc. rate case raises questions of who pays and profits from energy transition is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

A Virginia electric co-op is proposing a fee increase critics say will discourage customers from investing in solar or energy efficiency and harm low- and moderate-income customers.

Shenandoah Valley Electric Cooperative has filed paperwork to raise fixed charges on residential customer utility bills by $5 a month next year — a 20% increase that doesn’t align with members’ needs, argue advocates with the nonprofit Solar United Neighbors.

“This seems like a small fight,” Aaron Sutch, Solar United Neighbors’ Richmond-based Mid-Atlantic regional director, said about the opposition being mounted before a regulatory hearing scheduled for Oct. 6. “But it’s a big deal.”

“We’re taking off the kid gloves here,” Sutch continued. “It’s a sneaky back-door way they can raise rates and make a higher portion of customers’ bills unable to be controlled by solar and energy efficiency.” 

Shenandoah Valley Electric Cooperative, or SVEC, is headquartered in Rockingham County’s Mount Crawford and serves roughly 96,000 meters in the city of Winchester and 11 counties.

Co-op leadership maintains that the fixed-rate increase is a large piece of $5.3 million in annual revenues it needs to cover “expenses, service debt, fund capital additions, and meet the financial goals established by the Board of Directors,” president and CEO Greg Rogers noted in his testimony to the State Corporation Commission filed March 16.

Co-op spokesperson Preston Knight limited his response to the Energy News Network’s questions, saying it is SVEC’s policy to debate such issues via the forum of the rate case pending before utility regulators.

“Our application and testimony filed with the commission provides overwhelming support for our rate proposals,” Knight said. “Our filing complies with the statutes and regulations that the [State Corporation Commission] considers when deciding whether to adjust an electric cooperative’s rates.”

Heavier energy burden for low-income customers 

Shenandoah Valley Electric Cooperative Vice President and CFO J. Michael Aulgur said that advanced two-way meters and a fiber optic communications system are among the upgrades in the co-op’s work plan.

Tellingly, he also noted that co-op members are not only becoming more energy-efficient, but investing in rooftop solar for some or all their electricity needs. 

“These shifts in member behavior necessitate the cooperative to rethink its cost recovery methodologies,” he said. “That means moving away from a methodology largely based on energy consumption to one that better reflects demand.”

Karl Rábago, a member of Solar United Neighbors’ board of directors whose extensive resume includes work as a Texas utility regulator and deputy assistant secretary with the U.S. Department of Energy, is serving as an expert witness in the intervention. 

Broadly, he characterizes the proposed rate hikes as “unjust, unfair and unreasonable” and not in the best interests of customers or the public.

He zeroes in on the proposed jump in the monthly fixed charge from $25 to $30 as “unreasonable on its face” and “wildly inconsistent with rates in the region,” in 70 pages of testimony presented to the State Corporation Commission in late July.

Rábago recommends that regulators deny the proposal and order the co-op to reduce the fixed charge by $5 each year until it’s no higher than $15 a month.

“Just to compare, imagine if your water bill was $100 every month whether you used 10 gallons or 1,000 gallons,” Sutch said, pointing out a lack of incentive to conserve resources. “No matter how much you used, the cost is the same.”

Rábago said the requested increase is especially unfair after the co-op already almost doubled its fixed rate from about $13 at the beginning of 2020.

It’s punitive that close to one-third of a member’s bill would be “non-bypassable” as a fixed charge, he said. High fixed customer charges encourage excessive, wasteful, and polluting energy use because they send a strong price signal against the efficient use of electricity and investment in distributed generation, distributed storage, demand response, and other distributed energy resources, he added.

Rábago emphasized that such charges are economically regressive because they disproportionately burden low-income customers who, for the most part, use less electricity. 

He noted that the co-op doesn’t know how its proposed rates will affect energy justice because management has not evaluated how its proposed rate changes will impact its elderly, low-income and minority members.

An analysis by the advocacy organization Appalachian Voices reveals that about 17% of the co-op’s households — about 14,800 — would qualify as low-income with an average income of $16,206 per year. 

Their energy burden of about 14.2% is four times more than the 3.5% burden carried by the average household in the co-op’s service territory, with an income of $77,591.

In addition to raising its fixed charge, SVEC also plans to add a new demand charge of 10 cents per kilowatt to residential member bills. Simply put, demand is the rate at which power is consumed. Usually, utilities charge these additional fees to non-residential and commercial customers for maintaining a steady supply of electrons.

Traditionally, demand charges are calculated using the single highest 15-minute interval of power consumption over the billing cycle multiplied by the current per-kilowatt rate.

Jack Gaines of JDG Consulting pointed out in his commission testimony on behalf of SVEC that 2019 state legislation (HB 2547) authorizes co-ops to shift costs to existing demand charges on a revenue-neutral basis, with the approval of its board of directors.

“Incorporating a new demand charge into rates that did not previously include a demand charge makes those rates more cost-based,” Gaines explained. “After the demand charge is fully implemented, each consumer will pay for his or her actual demand, rather than pay an estimate collected through the consumption charge.” 

Not surprisingly, Rábago recommends that regulators deny the co-op’s demand charge proposal.

He castigated it as yet another fixed charge and a “Trojan Horse rate with the co-op planning unspecified and not-specifically timed changes to the charge in the future.”

Further, he said, the demand charge would likely be deployed with no expectation that it will operate as a price signal and without the tools that members, if educated properly, could use to manage costs. 

Co-op members in the dark?

Solar United Neighbors and its allies have long been convinced that while electric co-ops pride themselves on being democratic, member-controlled institutions, in reality they function more like monopolies.

In SVEC’s case, Solar United Neighbors is concerned that the co-op’s board of directors and managers are too opaque with their members about the proposed increases, Sutch said. For instance, questions about visibility and accountability arise because customers are prohibited from attending board meetings.

To increase transparency, Appalachian Voices, Repower Rappahannock Electric Cooperative and other advocates are urging SVEC co-op ratepayers to become educated and speak out.

Knight, the co-op spokesperson, responded that “we understand the importance of communicating with our members.” Co-op leaders have addressed the State Corporation Commission filing with members via telephone town halls in March and June and at the annual meeting earlier this month. As well, a November event will be dedicated to a Q&A with customers.

SVEC is under contract through 2053 to buy wholesale power from Old Dominion, its generation and transmission co-op in Glen Allen. Both SVEC and Old Dominion are expanding their solar footprints.

As renewables boom, Sutch said, co-ops are reconfiguring rates because they fear being bogged down with big, expensive, fossil fuel-powered stranded assets.

“Co-ops say, ‘We love solar,’” Sutch said. “But they’re really looking out for their power providers at the expense of their member-owners. We’re actively saying we’re not going to let you stop solar and energy efficiency.”

Rábago echoes those sentiments by pointing to a voluntary “Beat the Peak” program that allows SVEC members to reduce wholesale price costs and their bills in the relatively short term by cutting usage, especially when Old Dominion experiences high demand.

He answered a succinct “No,” to a query from utility regulators asking if SVEC’s proposed rate structure supports members reducing their monthly and long-term bills by reducing usage and demand.

“The co-op’s loading of costs onto the fixed customer charge sends a contradictory price signal to members that disincentivizes the very behavior that would save them money,” Rábago said. “It is almost as if the co-op management was expressing a preference for higher ODEC revenues and member bills than for lower co-op costs and lower member bills.”

In an interview earlier this year, Kirk Johnson, Old Dominion’s senior vice president of member engagement, said the co-op is fully aware of criticism that solar advocates level at the contract.

He countered that such a contract is beneficial because it prevents co-ops from being subject to the whims of the wholesale market and “keeps us together as a family.”

“Some people misconstrue what the contract is,” Johnson said. “They think it’s a contract for coal instead of an underlying financial arrangement that allows us to cost-efficiently build what we need to build.” 

Sutch said co-ops need to control their load profiles and peak demand by encouraging members to invest in solar, energy storage, demand response, electric vehicles and other evolving technologies.

“This isn’t a zero-sum game, he said. “It’s not like if we win, they lose.” 

Advocates are obligated to challenge a co-op they perceived to be overstepping its bounds, he said. “We are really going for the jugular here because we don’t have the luxury of time.”

Virginia co-op’s fee hike would shrink savings from solar, energy efficiency is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.