Duke Energy, the largest investor-owned electric utility in the U.S., wants to charge customers in South Carolina more for using less energy. Duke is asking state regulators for permission to more than triple the flat monthly charge – what customers pay even before they flip a switch, just for being hooked up to the grid – from about $8 to $28.
Raising flat monthly charges or adding other hidden fees has become a common tactic of utilities nationwide, in part to discourage customers from investing in renewable energy and efficiency. But now lawmakers and consumer advocates are starting to push back.
At least two states, including South Carolina, are moving to protect customers against being charged utility-imposed penalties for joining the clean energy revolution.
Here’s why exorbitant flat fees are unfair.
When customers install solar panels or more efficient appliances, they save money, cutting into the utility’s profits. Higher flat fees can make solar customers’ bills go up even if they use less energy, whereas high-use customers could actually see their bills go down. They also disproportionately harm lower-income consumers, who generally use less electricity per month.
In California, more than 6 million homes have solar panels installed, and all new single-family homes will be required to have solar panels beginning next year. Bipartisan legislation, appropriately named the Solar Bill of Rights, is awaiting a first hearing in the state Senate. The legislation guarantees:
- Any customer – residential, business, local or state government, or nonprofit – has a “fundamental right to generate and store renewable energy and to reduce and shape their use of electricity obtained from the electrical grid.”
- Customers can’t be assessed “discriminatory fees or charges” for installing and using onsite renewable energy or storage systems.
- Utilities can’t refuse to credit customers who send excess energy from their solar panels or storage systems back to the grid during times of peak electricity demand.
In South Carolina, the Republican-sponsored Clean Energy Access Act extends consumer rights to both solar power and efficiency and would jump-start a community solar program for low-income customers in the state. The legislation, which is working its way through the state Senate, would:
- Guarantee that customers who invest in solar or efficiency will save on their bills. It prohibits additional flat charges both on solar and non-solar customers.
- Require utilities to account for customer-owned solar in the planning documents they use to project future power needs. This would give regulators a more accurate picture of the state’s future power needs – a check against utilities that seek to build big, unnecessary power plants to pad their profits by passing on the costs to customers.
The days when electricity was exclusively supplied by utilities from expensive centralized plants they built and operated are over. Increasingly, that system is being replaced by a more widely distributed one where energy can come from many different sources – including customers themselves. For decades, regulators and elected officials have favored utilities with a guaranteed rate of return on capital investments. Now they are realizing that the rapid growth of customer-owned solar, efficiency and storage benefits everyone, because it leads to saving money, making the grid more resilient and secure, and providing for a just transition to renewable energy.
The consumer rights guarantees under consideration in California and South Carolina are, hopefully, the start of a trend that should become a central aspect of all state and federal energy policies. All ratepayers, no matter their income level, should have a fundamental right to access solar and energy efficiency technologies, and reap the savings from their investments. Without that right, we will all be paying much higher electric bills than we should be.