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Westar Energy’s Proposal to Increase Rates on Solar Customers

Tue ,16/05/2017

Westar Energy is proposing a rate increase for customers who install solar panels or other distributive energy sources. Those Net Energy Metering (NEM) customers would have to choose between an additional $50 a month energy charge, or a $15 fixed fee plus a per-kilowatt rate demand charge based on the previous month’s maximum usage. If approved, Westar’s rate proposal will increase the payback time for installing solar panels from 12 years to more than 20 years, greatly discouraging solar installations.

As a Westar stockholder, I am opposed to additional fees or higher charges on Net Energy Metering customers. The NEM customers should be seen as a resource rather than a liability and should be encouraged. They should be treated just as any other customer when they draw energy from the grid, and just as any other supplier for the net energy they produce. Does it really matter if Westar buys energy from NEM customers or from the Southwest power pool?

Westar’s website  says it will “support public policies and initiatives to accelerate the development and use of environmentally beneficial and cost effective strategies for energy efficiency programs for both customers and Westar’s own operations, zero – or low – emissions generation technologies, and renewable energy resources.”  That is a good policy, but this proposal is inconsistent with it.

One of the biggest future costs to Westar would be to build additional power plants, so Westar encourages energy conservation.  If I cut my electricity usage by 50% by installing more insulation and storm windows, I am applauded for following Westar’s conservation guidelines. If I cut my electricity usage by 50% by installing solar panels, I would be charged a higher electric rate. That is irrational, as NEM customers would help reduce the need for new power plants just as energy conservation does.

Westar should not be concerned about losing revenue from solar customers. Residential customers pay a customer fee, an electricity fee, a fuel charge, a distribution fee, an environmental fee, an energy efficiency charge, and even Westar’s property taxes. Last June, our bill was $24.95 for electricity, but our total bill came out to be $53.27 after the fees were added. NEM customers will pay less for energy charges, but will still pay the other fees. If Westar makes it too expensive, then potential NEM customers may install extra battery  capacity such as a Powerwall, and withdraw from the grid entirely.

Distributive generation should be seen as a resource. Westar has been proactive in developing wind and solar energy and now gets 51% of its energy from noncarbon sources. In the future, Westar will need to replace some of its coal power plants and may need to reduce its use of natural gas to cut its greenhouse gas emissions. Distributed generation would help replace the energy they produce without requiring capital investment from Westar.

NEM customers will help reduce pollution and environmental degradation. Westar has three coal-fired power plants which operate without scrubbers. Those plants should be phased out immediately and Westar should begin phasing out its other coal-fired power plants to reduce its greenhouse gas emissions. Though natural gas is cheap now, that may not be true in the future. There is a link between fracking and earthquakes, and fracking activities are being curtailed. This will lead to higher gas prices. Though natural gas produces 2 ½ times as much energy per mole of carbon dioxide produced, it has a global warming potential 82 times that of carbon dioxide. If even 4% of the natural gas used for energy is leaked during production and transportation, then any advantage of using it for fuel will be lost

Coal-fired power plants release mercury, chromium, lead, cadmium, arsenic, sulfur oxides, nitrogen oxides, carbon dioxide,  particulates, and radioactive isotopes. Burning  coal releases millions of tons of pollutants into the air and leaves several hundred million tons behind in the coal ash. Some pollutants stay in the air and others eventually find their way into the water, the food chain, and into us. The heavy metals are carcinogenic and accumulate in tissue. Even exposure below the allowed levels increases the chance of cancer over time. The sulfur oxides, nitrogen oxides, and carbon dioxide released by coal combustion harm plants, produce acid rain, and increase the greenhouse gas concentrations. Switching to renewable energy would greatly reduce these pollutants and help preserve the environment for future generations.

Encouraging NEM will benefit Westar and its customers.  A study by Crossborder Energy in 2014 found NEM allows utilities to avoid costs of generation and fuel, maintenance and upgrade of transmission and distribution infrastructure, transmission losses (which account for 7% of losses), capacity purchases, and compliance with renewable energy standards. The study concluded,” The cost which utilities avoid when they accept NEM power exported to their grid shows that NEM does not produce a cost to nonparticipating ratepayers; instead it creates a small net benefit on average across the residential markets.” While it does cause power companies to have to adjust their loads accordingly, NEM reduces peak loads, transmission losses, and the need for new power plants.  In California, the study found NEM “delivers more than $92 million in annual benefits to non-solar customers”.

Similar research studies in Vermont, New York, California, Texas, and Nevada also concluded that net metering provided a net positive benefit for utility companies and their customers. A 2015 study done in Missouri is relevant to Kansas. A cost-benefit study of net metering in Missouri arrived at the same conclusion as the other studies, “ Net metering provides a net benefit. “ Missouri has 6000 net metering customers while Westar now has approximately 300. Westar certainly should encourage more.

This proposal to impose a fee or higher rates on NEM customers is the result of short-term thinking. It will harm Westar and its stakeholders in the long run. Investing in clean energy protects the environment, reduces deaths and disease from air pollution, and creates good, local jobs. Westar  must develop policies to encourage the development of renewable energy investments and energy conservation. Our energy needs will best be served by a mixture of traditional and alternate energy sources, but we must be proactive in developing our renewable energy resources as quickly as possible.


(c) 2017 – J.C Moore