Black Hills Power was considering a special demand rate for all renewable energy customers instead of a reward for installing solar panels that help with grid security, grid reliability, energy independence, the environment, and public health. The idea for the charges didn’t make customers happy, however. As such, the solar charge was withdrawn by the South Dakota-based utility.
Black Hills Power, a subsidiary of Black Hills Corporations, has approximately 70,000 customers throughout western South Dakota and into Wyoming and southeast Montana. The solar charge isn’t dead, but the utility is opening up the issue for dialogue now.
Let’s jump into the specifics of the charge real quickly. “It would cost people who have solar panels,” explained Steve Hammond. “If they are running their house the same way they were, it would cost them between $5 and $25 dollars more each month for electricity. So it’s kind of a surcharge to punish you for putting in solar – a solar penalty.”
Lynn Hammond, with her husband Steve Hammond, installed four solar panels at a cost of $42,000 to help the environment and lower their electric bills. They explained that Black Hills Power would require a demand rate for everyone who generated their own power.
Lynn said, “It’s not an optional thing. You would have to be on the demand charge.”
Jim Keck with Black Hills Power said the company is concerned about covering their costs. “We don’t want to penalize our entire residential customer base to help pay for the fixed costs of these renewable systems,” said Keck.
However, the issue is that solar also provides numerous benefits to the grid. As listed above, grid security, grid reliability, peak power, energy independence, and a cleaner output. Rather than try to value everything, which often results in solar being more valuable than the retail rate of electricity that is provided under net metering, the utility just wants to charge for one tiny piece of the pie.
One twist is that Black Hills Power recently requested a rate increase between 10% and 13% for all electricity users due to grid damage from weather, as well as to address regulatory costs on coal-fired power plants. So, it seems other matters are at play, and the utility is simply trying to put the bill on solar power producers.
Think Progress reports: “We understand that it’s complicated,” Vance Crocker, Black Hills Power’s vice president of operations, told the Rapid City Journal. “We want to educate our customers about it and have a dialogue with our customers.”
Throughout the country discussions of stifling the proliferation of distributed solar power, are ripe. What is to discuss? Change and renewable energy are needed.
“Putting in a Residential Demand Service charge is really a hidden fee or penalty charge on solar energy and is the wrong thing to do,” said Steve Hammond, Dakota Rural Action member and owner of a solar electric system.”
Solar reduces fossil fuel generation. Solar helps reduce emissions that will cost us all a great amount of money and suffering. Distributed solar is growing nationwide, and utilities should be integrating and adapting, not resisting. They need to accept that they need to expand beyond the simple business model they have used for ages. Utilities now need to receive energy from renewable sources as well.