El Paso Electric Penalizes Rate Payers for Solar Power

Don't believe El Paso Electric Company's claim on their home web page. You will see a rolling banner that includes solar panels and the copy "Renewable Energy: Improving our environment through renewable energy programs." Truth is that they don't just discourage residential use of solar energy - they penalize it! (EPEC's bogus marketing claims reminds one of the misrepresentations by PSB/EPWU in their expensive public relations campaign against natural open space.)

EPEC makes the installation and use of solar panels by residents uneconomical. They are also stealing electrical power from homeowners with solar panels or charging ratepayers with solar panels a $15/month surcharge.

One rate-payer (and an engineer) who recently installed solar panels gave me this report [emphases mine]:

We attended a meeting with Evan Evans and other representatives of El Paso Electric where the rate schedule for homeowners with residential solar systems was explained.

Until March, 2011 El Paso Electric was billing using “net metering” where the meter runs forward and backward depending upon production and use of electricity. Residents with solar systems would then pay only for their electricity use in excess of the amount produced by the solar panels. The Electric Company says that in July, 2010 they obtained approval from the Public Utilities Commission (PUC) for Rate Schedule 48. This schedule says that they can a) charge $15/month extra, b) charge the residential customer full cost for any electricity used (~$0.12/kW-hr, and c) pay the customer ~$0.025/kW-hr for any electricity produced. Although I have not seen the paperwork, homeowners are also offered the option of not being charged the extra $15/month but at the same time not receiving payment for any produced electricity. That is, whenever the solar panels produce more than the residence uses, the extra goes back to the electric company for no compensation – nice deal for the utility.

While Mr. Evans attempted to keep his answers factually accurate, his accuracy is uncertain; factually accurate is also not the same as fair and unbiased. When asked why we have this rate schedule we were told that the PUC has dictated these rates. In fact, rate schedules are negotiated with the PUC by the Electric Company. Why would any company, with true interest in solar power negotiate a rate schedule that makes solar systems uneconomic?

Solar systems produce during the highest demand hours of the day, when electricity is most valuable. When Mr. Evans was asked why the Electric Company pays so little for the produced power, given the optimal timing, his response was that it’s really not true that power is more expensive during the day, but rather that it’s cheaper at night! Those of us, who have studied logic, believe that’s exactly the same thing – but remember, these are the folks who brought us rolling blackouts this winter. The fact is that El Paso Electric charges its large customers an energy charge that increases by a factor of 18 during peak demand time relative to off peak hours (see Schedule 25: http://www.epelectric.com/files/html/Rates/TX_Business/Schedule_No_25_-_Large_Power_Service_Rate.pdf ).

So let’s see now: Solar power produced during peak demand hours has a very low value . . . but the surcharge for margin power used during the same time period has an 18X cost factor?

The net effect is that, despite the appearance of solar panels on the El Paso Electric web site, the solar option in the El Paso Electric portions of Texas is effectively dead. For residential systems, a very small set of solar panels (enough to meet minimum household daylight hours demand) would result in small monthly electricity cost reductions – but small systems tend to be uneconomic because some of the fixed charges of system setup greatly increase installation costs per kW. Larger systems are clearly uneconomic.

Here's a similar report about the meeting from a science teacher [again, emphases are mine]:

As you may know, EPE invited all of its solar customers to a 7 p.m. meeting on 24March at Stanton Tower to discuss changes in billing procedures. It turned out to be a pretty rancorous meeting that painted EPE in a very poor light. There were many angry people. Briefly, here is the story.

When I signed on in January 2009, I was credited on a PER MONTH basis for kWh that I was ahead ( sort of like putting them in a bank account). Once I had exhausted any credits I would be billed at the normal rate for any kWh I owed for the month. I also paid the standard monthly $4.50 residential customer charge since I was still, of course, hooked up to the grid. This resulted in my paying EPE about 90 dollars for electricity the first year.

Last spring, the billing changed some – less favorable to me in ways, but still fair I felt. Again, on a PER MONTH basis, I would be charged for net kWh consumed at the rate all of us pay for electricity, the retail rate. On months when I was a net producer I would be paid the wholesale rate for my excess kWh. I would also, of course, continue to pay the customer charge. Since I have not received a bill of any kind from EPE in the last 13 months(!) I don't know my exact bill in that time, but it would be in the 80 dollar range for that time frame. This would be less than the first year, mostly due to conservation efforts made here at the house.

Now the new situation: EPE is now monitoring net kWh on a TWO HOUR BLOCK basis, even though the bills (should I ever see one) are done monthly. Here is how this works: at night, when I am of course a net user, I will be billed for the net sum of kWh consumed based on the two hour blocks. At night, then, I am treated much like any other customer. During the day, I have a "choice" of two "options". I can pay a smaller customer charge – in the five to seven dollar/month range – and EPE will just take for free my net kWh production during the daylight hours. My other "choice" is to pay a $15 monthly charge, but then EPE will buy my daily two hour block excesses for $.025/kWh (the wholesale rate). I actually come out better on the first option, but it will turn my annual 80 dollar bill into something in the $250-300 range and ensure that EPE will get something from me every month, even those months when I make several hundred more kWh than I consume. Even days like today, when I will make 10 or so more kWh than I will use, I will have to pay them. This makes bona fide contractors look, at best, confused, and, at worst, complicit. It makes the payback period much longer and not really economically feasible for the homeowner. It cripples the growth of solar (by the individual at least) here in El Paso. All of this comes from EPE, which claims still and did so repeatedly at the meeting, to be FOR the individual solar customers. All this from EPE, whose lack of foresight in the deep freeze caused great, and unnecessary, financial damage.

Two comments: EPEC must have to pay for its $100,000 raise it is giving CEO David Stevens.

It also may be high time that we find ways to get off the grid and really live more sustainably. Find some ideas at Off Grid: Free Yourself. Here's a blog to follow. I predict that in the next few years, a getting homes and businesses off grid will become a huge growth industry. Here's one such house now where the owner not only lives off the grid but sustainably in other ways:

Off the Grid from Nick Hillyard on Vimeo.

David Stevens and his solar power penalizing company will just have to go begging for customers.