Eversource seeks higher fees on customers with solar

Environmental group raises concerns about proposed demand charge

Eversource is proposing special charges for customers with solar installations to make sure they pay their share of the cost of operating the power grid.

The proposed charges are contained in Eversource’s rate filing, which is under review at the state Department of Public Utilities. The utility says the charges are needed because many solar customers produce more power than they use, which allows them to escape paying their share of the power grid’s fixed costs.

The proposed new charges for homeowners with solar installations coincide with a push by the Baker administration to cut in half the subsidies paid by electric ratepayers to solar developers. The overall cost of solar incentives paid by ratepayers through their electric bills has been running at $400 to $500 million a year (or 40 to 50 cents a kilowatt hour), and the new plan is expected to cut that in half, Baker administration officials said. The new plan is intended to spur the development of the next 1,600 megawatts of solar capacity.

Reducing the size of solar incentives and assessing higher charges on customers with solar installations are policies that have been high priorities of Massachusetts utilities. The utilities say they are merely trying to keep electric bills reasonable and fairly distribute costs among customers. But environmental advocates have suggested that solar power is a long-term threat to companies like Eversource, which rely on customers who want electricity delivered to their homes rather than customers who produce their own power.

Bills for electricity typically have two types of charges – a fixed monthly customer charge that recovers the cost of connecting a home to the grid and per-kilowatt-hour charges for everything else. Homeowners with solar installations on their roofs don’t fit neatly into this billing system because they produce much of their own electricity and receive net metering credits when they sell electricity into the grid. The credits are valued at the retail price of electricity, so homeowners can use the credits to offset the cost of electricity being drawn from the grid when the sun isn’t shining.

Eversource says solar homes use the power grid just like any other customer but are not paying their share of the costs associated with maintaining it. With the number of solar installations expanding, the utility says these grid-maintenance costs, which are rising rapidly and total millions of dollars each year, end up being shifted on to non-solar customers.

In its rate filing, Eversource is calling for increasing the monthly customer charge for connecting residential customers to the grid from $6.87 to 8. For customers with solar installations, however, the charge would rise to $10.38 in eastern Massachusetts and $14.55 in western Massachusetts.

Eversource is also proposing a monthly demand charge for customers with solar installations that reflects the cost of meeting the peak power demands of those customers. The charge would vary depending on the customer, but a sample billing illustration contained in Eversource’s rate filing puts the monthly fee at $7.63.

Both of Eversource’s proposed charges would apply to homes with new solar installations constructed after the rate filing is approved, presumably by January next year.

Mark LeBel, a staff attorney at the Acadia Center, an environmental advocacy group, said Eversource’s demand charge isn’t fair to small consumers of electricity because there is no way for a customer to forecast the fee or manage it. He also said a utility’s costs are never driven by the peak demands of an individual, residential customer.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Acadia recommends creating a distribution reliability charge based on the customer’s electricity consumption over a 12-month period, which would give the homeowner an incentive to reduce his or her use of electricity. LeBel – the coauthor of a report on demand charges entitled “Charge Without a Cause?” – said Eversource’s response to growing solar use appears to be an overreaction. “There’s not a big enough problem to go there anytime soon,” he said.

–BRUCE MOHL

  • NortheasternEE

    Every solar panel and every wind turbine connected to the grid increases the cost of electricity because it needs an equivalent amount of natural gas firming.

    Paying the owners of these useless generators close to retail for energy, that the grid spends money to connect just to ignore their power, is economically destructive, and unfair to those of us who are not in a position to install them.

  • Mhmjjj2012

    Let’s see if I understand Eversource’s rate filing. if you’re a residential customer in western Massachusetts with a solar installation then your monthly customer charge for connecting to the grid would increase from $6.87 to $14.55 or far more than the $10.38 a household in eastern Massachusetts would pay. Then Eversource proposes a monthly demand charge for customers with solar installations at $7.63. That comes out to an annual electricity bill increase of $183.72 that western Massachusetts solar households would pay. Exactly how are residential customers going to afford that increase? Will that increase cause a decline is solar installations? Is Eversource losing money under the present rate structure?

  • NortheasternEE

    The Pilgrim power plant gets paid the wholesale price for its energy.

    Why are folks with solar panels on their roof, whose energy is the same as Pilgrim’s, paid at retail, about twice as much?

    Is this why Pilgrim is going out of business?

    • beav

      Unless NH is different than MA, my ‘net metering’ only covers my home’s usage. Anything I produce beyond that is paid at wholesale. I’m just a small scale provider to Eversource.

      Now, if I would sign some papers and become a ‘group net meter’ and sell my power to other members of my group, Eversource would pay me at retail rates.

      THAT would be a burden on my fellow ratepayers.

      Pilgrim is getting shut down because the NIMBYs have won. They seem to like more CO2.