Do Utilities Own the Sun?

In a world of solar power, who owns the sun? Taxpayers? Utilities? Solar power companies? Lobbyists?

A surprising new fight is breaking out nationwide in states like Oklahoma and Utah that should get solar customers fired up—but make utilities feel really warm inside. It’s over new “sun taxes” solar customers may have to pay. The latest battle is now being waged before Utah’s Public Service Commission, which just took three days of public comment and expert testimony on how to charge utility customers a “sun tax” for their solar power use.

At issue: A group of customers cut their electric bills via solar power panels on their rooftops. Those solar power panels generate excess power during the day, and the customers then get credited for that power when they draw electricity at night.

But the state’s biggest utility, Rocky Mountain Power, says, not so fast. It effectively is saying those solar-loving customers are leeching off the electric grid by not paying for their use of the electric grid’s fixed costs, like the wires and poles that deliver electricity to their lightbulbs.

So, last summer, the utility proposed a new “sun tax” charged against solar customers to cover those costs. But the Utah Public Service Commission nixed the new tax, until further notice, asking for more analysis of the cost-benefits of rooftop solar.

But how do you exactly quantify a “sun tax?”? What methods, data, and tests should be relied on to ascertain how much energy a homeowner gets in the way of solar power, and by how much does it offset other forms of energy sources via the grid?

The utility companies and their lobbyists are beavering away at trying to convince the Utah Public Service Commission to let it charge these solar-happy homeowners a “sun tax” to cover those costs. But homeowners, solar industry officials, and clean energy backers rallied outside the commission hearing in Salt Lake City this week to ensure their solar choices are protected.

One study commissioned by the solar crowd done by Synapse Energy Economics purports that, for every dollar invested in rooftop solar, there is a benefit worth anywhere from $12 to $24 to all of the utility’s customers. The claim: Because of solar power’s backup effect, the impact of its “distributed power generation” cuts the need for utilities to build out costly power stations in the future.

Tim Woolf, a Synapse official, said that his analysis provides the argument against the sun tax, based on certain criteria. Specifically, that 1% percent of the utility’s customers would install rooftop solar each year for a decade, resulting in 10% percent of customers using solar by 2024. He figures the cost savings for the utility would total $287 million to $1.2 billion, which he estimates the utility’s customers would not have to pay.

Utility officials, though, reportedly discounted the analysis, arguing the criteria were manipulated so as to arrive at pre-set conclusions in favor of solar. They also argue solar customers get a generous credit for the solar energy they produce that can wipe out their bills, to the point where they are not paying for the upkeep of the wires and poles that deliver their electricity.

But the math is needed here, because “sun taxes” are coming fast to solar customers. Oklahoma passed a bill last year, SB 1456, that lets Oklahoma’s utilities apply to charge in the future these solar power customers, or what are called "distributed generation," customers a “sun tax,” but only after lengthy hearings before a state regulator, the Oklahoma Corporation Commission.