Published in Energy

Major utilities seek negotiations on rooftop solar bill

BY Tuesday, May 04, 2021 01:39pm

Michigan’s two major investor-owned utilities want to negotiate with state legislators and advocates on a proposed bill that would expand access to the companies’ rooftop solar programs.

During a joint press conference today, officials with Detroit-based DTE Energy and Jackson-based Consumers Energy — along with the Michigan Chamber of Commerce and the Utility Workers Union of America — said House Bill 4236 in its current form is unfair and would create subsidies paid by customers who don’t generate their own power onsite.

H.B. 4236 is sponsored by state Rep. Gregory Markkanen, R-Hancock, and has bipartisan support in the state Legislature, as well as backing from clean energy advocates. The bill would eliminate caps in regulated utilities’ distributed generation programs, which use a formula adopted by the Michigan Public Service Commission to credit customers who send excess power they generate back to the grid. 

The programs are capped at 1 percent of a utility’s peak in-state load. Consumers voluntarily agreed to expand its cap to 2 percent after hitting the 1 percent limit late last year.

“As (renewable energy) technology changes, we do believe the Michigan rules about what the owners of private solar systems pay to use the grid and receive … need to evolve,” said Brandon Hofmeister, Consumers’ senior vice president of governmental, regulatory and public affairs.

Hofmeister added that until now, the state’s rooftop solar compensation programs have made the systems “artificially lucrative” for customers who install them.

“Consumers and DTE are all in for solar … we just want to make sure we update the rules to leverage this in an effective way for everyone,” Hofmeister said.

H.B. 4236 proposes to eliminate the distributed generation program cap entirely. Hofmeister declined to say a specific cap percentage, but said that the utility would support a “significant cap raise to allow long-term certainty.”

For years, utilities and environmental groups have argued over a fair credit to reimburse rooftop solar customers for their excess power. The state’s previous net metering program compensated these customers at retail rates of power, while utilities have argued they should be credited closer to the wholesale price of power. The MPSC’s inflow-outflow model lands roughly between the two.

Camilo Serna, DTE’s vice president of regulatory affairs, said the inflow-outflow model is “definitely a step in the right direction from net metering,” but would be unworkable and create cross-subsidies as more customers install rooftop solar.

Michigan Energy Innovation Business Council President Laura Sherman said her group has been willing to negotiate with the utilities over distributed generation programs, but added the companies have yet to put forth a compromise.

In a statement today, DTE and Consumers claimed that the current policy creates a $100 million cross-subsidy across both of their service territories in the state.

“If that is true, which I don’t believe for a second is, they can argue that in front of the MPSC and they would absolutely receive relief,” Sherman told MiBiz, adding that it’s unlikely the utilities could produce data to support the claims.

The Michigan League of Conservation Voters today called the utilities’ position a “blatant smokescreen.”

“Michigan is the only state in the country with this ridiculous restriction on creating jobs and investing in affordable rooftop solar — yet DTE and Consumers lobbyists have fought tooth and nail for five years to block this common-sense legislation,” MLCV Deputy Director Bob Allison said in a statement. “Our residential electricity rates have skyrocketed, resulting in Michigan having the highest energy costs in the Midwest — yet DTE and Consumers continue to spread self-serving misinformation and ignore strong bipartisan support to end this unneeded, punitive restriction on Michigan homeowners who just want the freedom to generate their own energy.”

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