All of our customers, including those with their own generation, benefit from access to our reliable electricity grid. We are proposing new rates for customers that generate some of their own power because while they enjoy the same benefits from the reliable electricity grid, they currently do not pay their fair share of the grid costs.
These customers use the grid as much, if not more, than customers who do not generate their own power. Some customers generate more energy than they need. When this happens, they use our grid to sell excess energy to us at a retail prices. The grid also ensures that they have the power they need, whenever they need it – at night, in the rain, or under conditions when they need power beyond what their system is able to produce.
Conversely, customers unable to afford their own generating systems, don’t have a suitable place to put them, or simply don’t want them, currently have costs shifted to them from those customers who do have the means to install their own generation.
In this rate case, we’re proposing new rates effective Jan. 1, 2016, for customers who have their own generating systems. The changes we propose will allow us to maintain a system that provides reliable service in an environmentally responsible way, while keeping our rates fair and affordable for all customers.
Friday, September 5, 2014
Does We Energies support renewable energy?
Yes. Renewable energy is an important part of our company’s supply mix and our mission to provide safe, reliable electricity to our customers. In fact, we have invested nearly $1 billion in renewable energy over the past decade – all in Wisconsin. We’re also proposing new solar generation – the largest and most efficient solar project in the history of the state. We will continue to promote clean energy, including options for customers to install renewable energy facilities at their homes and businesses.
How long is the payback for having your own generation?
It depends on the specific circumstances of the customer. It often can take dozens of years for a generating system to pay for itself.
If customers with their own generation have excess power, how much are they paid for power sold to the utility? Who pays these costs?
The amount that a customer gets for selling power back to the utility depends on the tariff that applies to their system. For example, some customers may receive as much as 27 cents per kilowatt-hour (kWh) for energy that is valued around 4 cents per kWh. This means that other We Energies customers are paying four to five times more for energy, and they also are paying a majority of the fixed costs.
Do customers with their own generation go completely off the grid?
Customers with their own generation system use the grid to both buy power during times when their system is not producing or to sell excess power when their system is producing more electricity than needed.
Is subsidizing these small renewable energy systems really a problem on We Energies system?
The amount of customer-owned generation has been small, but as the number of systems increases, so will the problem. Costs that should be borne by customers with their own generation will be shifted to customers who do not have their own generation. As the capacity of customer-owned generation increases, this subsidy will continue to increase.
How many We Energies customers currently generate their own power?
More than 650 customers have their own generating systems.
What value does the grid provide to those producing their own power?
The grid enables the customer to get energy when it’s needed and send energy back to the grid when the customer is producing more than they need. The grid serves as a reliable source of high-quality power in the event of disruptions to a customer’s system. This includes compensating for the variable output of solar and wind generation. In the case of solar, the amount of energy produced varies during overcast conditions or fast-moving clouds. And, of course, solar panels provide no generation at night.
The grid serves as a crucial balancing resource available for whatever period – from seconds to hours to days and seasons – to offset variable and uncertain output from distributed generation resources.
The grid serves as a crucial balancing resource available for whatever period – from seconds to hours to days and seasons – to offset variable and uncertain output from distributed generation resources.
Is customer-owned generation growing?
Yes. Customer-owned generation has grown each year for the past several years in the We Energies service area.
How are low-income customers impacted?
We are proposing to reduce the amount low-income customers currently are paying for customers who add solar panels or generating systems on their homes and businesses.
Low-income customers do not have the financial means to produce their own energy, even if they wanted. Today, low-income customers without their own generating systems, end up paying a greater portion of the grid costs than those who can afford their own generating systems.
This plan takes a step toward reducing high-cost, long-term subsidies for distributed generation.
Low-income customers do not have the financial means to produce their own energy, even if they wanted. Today, low-income customers without their own generating systems, end up paying a greater portion of the grid costs than those who can afford their own generating systems.
This plan takes a step toward reducing high-cost, long-term subsidies for distributed generation.
Why is changing this policy important now?
Over the years, the marketplace changed. Customer-owned generation, sometimes called distributed generation, has grown to a point where subsidies paid by our other customers no longer are appropriate. Very simply, our proposed rate plan reduces the subsidies that customers currently pay for those who own their own generating systems.
I have a natural gas generator that is connected and automatically turns on when the power goes out. How will this impact me?
Our proposed changes apply only to customers who
routinely generate their own energy, not for customers who use a backup
generator as a safeguard against a power outage.
Why are you proposing to increase facilities charges?
We’re proposing a change to the electric facilities charge to provide a more transparent bill that more accurately reflects delivery costs.
Your electric bill includes two main charges – the energy charge and the electric facilities charge.
The energy charge is the cost of electricity. It covers the cost of generating electricity, including power generation equipment (power plants, hydroelectric plants, wind turbines, etc.) and the fuel needed for the power generation process (natural gas, coal, biomass material, etc.). Two key factors that influence your energy charge are fuel costs and how much energy you use.
The electric facilities charge is the cost to serve you. This includes meters, pipes, poles and wires; personnel to respond to customer service issues, and crews to make upgrades and repairs to thousands of miles of pipes and wires that delivery energy to your home.
Over the years, the energy charge was used, in part, to pay for delivery costs – such as the service, metering, billing, poles, wires and so on. Our proposal adjusts the charges so that the electric facilities charge more accurately reflects delivery costs.
We are requesting to increase the facilities charge from $9 to $16 per month (or from 30 cents to 52.6 cents per day) for residential and some small commercial customers. This proposed change enables us to propose a lower energy charge. This change would result in more than 60 percent of customers seeing a savings, no change or an increase of no more than $4 on their monthly bill.
We are committed to maintaining a system that provides reliable service in an environmentally responsible way, while keeping our rates fair and affordable for all customers. We believe these changes will facilitate a more transparent bill and more accurately reflect the true cost of service.
Your electric bill includes two main charges – the energy charge and the electric facilities charge.
The energy charge is the cost of electricity. It covers the cost of generating electricity, including power generation equipment (power plants, hydroelectric plants, wind turbines, etc.) and the fuel needed for the power generation process (natural gas, coal, biomass material, etc.). Two key factors that influence your energy charge are fuel costs and how much energy you use.
The electric facilities charge is the cost to serve you. This includes meters, pipes, poles and wires; personnel to respond to customer service issues, and crews to make upgrades and repairs to thousands of miles of pipes and wires that delivery energy to your home.
Over the years, the energy charge was used, in part, to pay for delivery costs – such as the service, metering, billing, poles, wires and so on. Our proposal adjusts the charges so that the electric facilities charge more accurately reflects delivery costs.
We are requesting to increase the facilities charge from $9 to $16 per month (or from 30 cents to 52.6 cents per day) for residential and some small commercial customers. This proposed change enables us to propose a lower energy charge. This change would result in more than 60 percent of customers seeing a savings, no change or an increase of no more than $4 on their monthly bill.
We are committed to maintaining a system that provides reliable service in an environmentally responsible way, while keeping our rates fair and affordable for all customers. We believe these changes will facilitate a more transparent bill and more accurately reflect the true cost of service.
How do facilities charges from We Energies compare to others?
The chart below shows a comparison of investor-owned utility facility charges for 2014 (and any proposed charges for 2015) as well as those for Wisconsin-based cooperative utilities.
Even with the proposed facilities charge increase, our charge would remain below most other Wisconsin utilities and electric cooperatives.
Even with the proposed facilities charge increase, our charge would remain below most other Wisconsin utilities and electric cooperatives.
How are seniors impacted by your proposal?
Our proposal takes a step toward protecting seniors from paying increased subsidies to customers who generate their own power.
We are proposing to reduce the amount seniors and low-income customers currently are paying for customers who add solar panels or generating systems on their homes and businesses.
Today, any senior or low-income customer without their own generating system, ends up paying a greater portion of the grid costs than those who can afford their own generating systems.
We also propose modifying the facilities charge to better reflect the true cost of delivering energy. In the past, some of the costs that remain fixed regardless of usage – the poles, wires, transformers and services needed to keep the energy flowing – were included in the energy charge. As solar and other customer-owned generating resources continue to grow, the recovery of these costs is being paid by fewer customers – including seniors – which results in a higher energy charge.
The proposal in front of the Public Service Commission of Wisconsin would ensure that everyone pays a fair share for energy delivery by reducing the energy charge and increasing the facilities charge to better reflect the true cost of service. Overall, this change would result in more than 60 percent of customers seeing a savings, no change or an increase of no more than $4 on their monthly bill.
This plan takes a step toward protecting seniors from high-cost, long-term subsidies for distributed generation.
We are proposing to reduce the amount seniors and low-income customers currently are paying for customers who add solar panels or generating systems on their homes and businesses.
Today, any senior or low-income customer without their own generating system, ends up paying a greater portion of the grid costs than those who can afford their own generating systems.
We also propose modifying the facilities charge to better reflect the true cost of delivering energy. In the past, some of the costs that remain fixed regardless of usage – the poles, wires, transformers and services needed to keep the energy flowing – were included in the energy charge. As solar and other customer-owned generating resources continue to grow, the recovery of these costs is being paid by fewer customers – including seniors – which results in a higher energy charge.
The proposal in front of the Public Service Commission of Wisconsin would ensure that everyone pays a fair share for energy delivery by reducing the energy charge and increasing the facilities charge to better reflect the true cost of service. Overall, this change would result in more than 60 percent of customers seeing a savings, no change or an increase of no more than $4 on their monthly bill.
This plan takes a step toward protecting seniors from high-cost, long-term subsidies for distributed generation.
Why are you proposing to “tax the sun” by charging residential customers with their own generating systems a monthly fee to sell energy back to the grid?
We are not proposing to charge customers for sending power to the grid. We are proposing to add a demand charge of $3.79 per installed kilowatt of customer-owned generation to recover some of the fixed costs currently included in the energy charge and to recover the costs we – and ultimately our other customers -- pay to have standby generation ready when those solar customers need it – at night, during inclement weather, or whenever their systems are unable to meet their energy needs.
If you end subsidies for solar projects, won't that harm the future of solar power in Wisconsin?
We disagree and believe that if the subsidies continue, the result will be short-term profits for the solar industry at the expense of our customers and improvements to solar technology.
This issue was summarized in testimony submitted to the Public Service Commission of Wisconsin by Ashley Brown, executive director of the Harvard Electric Policy Group at the John F. Kennedy School of Government at Harvard University. Below, he explains how continuing subsidies will hurt rather than help the solar industry:
In the short term they constitute a wealth transfer from WE’s non-solar customers to the solar industry. In the long-term, however, they are actually harmful to solar energy because NEM (net metering) provides absolutely no incentives to improve the performance of a generating resource that, among renewables, already ranks last in efficiency and in cost effectiveness for reducing carbon emissions. In effect, the solar industry is putting its short-term profits ahead of the long-term value of solar energy.
Source: Rebuttal testimony of Ashley C. Brown submitted to PSCW. Page 16.
This issue was summarized in testimony submitted to the Public Service Commission of Wisconsin by Ashley Brown, executive director of the Harvard Electric Policy Group at the John F. Kennedy School of Government at Harvard University. Below, he explains how continuing subsidies will hurt rather than help the solar industry:
In the short term they constitute a wealth transfer from WE’s non-solar customers to the solar industry. In the long-term, however, they are actually harmful to solar energy because NEM (net metering) provides absolutely no incentives to improve the performance of a generating resource that, among renewables, already ranks last in efficiency and in cost effectiveness for reducing carbon emissions. In effect, the solar industry is putting its short-term profits ahead of the long-term value of solar energy.
Source: Rebuttal testimony of Ashley C. Brown submitted to PSCW. Page 16.
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