El Paso Electric Agrees to Kill Solar Fee for Customers

After almost a year of claiming solar customers were more expensive to service and should be subject to an additional fee, El Paso Electric has withdrawn a proposal to charge solar users up to $11 more per month. It’s the latest development in a nationwide tug-of-war between utility companies, who see rooftop solar as a threat to their business, and renewable energy advocates.

The decision was part of a 278-page settlement agreement between El Paso Electric, the city of El Paso and a coalition of solar energy companies and environmental advocates. The agreement was filed with the Public Utility Commission (PUC) Thursday.

“The benefit of the unanimous settlement is that customers who decided to install solar panels at their home based on the savings they expected to realize will not suddenly be hit with an additional monthly charge they had not anticipated,” John Hall, a clean energy expert at the Environmental Defense Fund, wrote the Observer in an email. “By removing barriers to solar energy, we can make progress on reducing pollution and cleaning up the air — a big health benefit to El Pasoans.”

The unanimous agreement is awaiting approval by the PUC, likely to happen in the next couple months. Four groups, including solar industry organizations and the Office of Public Utility Counsel, which represents consumers in matters before the PUC, opposed a settlement filed in March, in part due to the inclusion of a solar fee.

Consumer and environmental advocates’ battle with El Paso Electric began last year when the utility filed a case with the PUC seeking to raise its rates for customers across the board to cover $1.3 billion in infrastructure investments. Among the proposals was an additional charge for the more than 1,770 Texas solar power users in the company’s service area. El Paso Electric argued that solar users are tapping into the grid when the sun isn’t shining but aren’t paying their fair share of the cost of infrastructure upkeep.

The proposal was met with fierce opposition from a coalition of El Paso residents, environmental groups and solar energy companies who said the fee would have a chilling effect on the growth of solar in the region. Consumers considering installing solar panels do so based largely on the cost savings they will see on their monthly utility bill. El Paso Electric’s solar fee would kill the economic incentive to install solar, consumer advocates said.

Apart from the environmental benefits of expanding solar use, solar proponents pointed to the benefits it provides to the grid. Studies have shown that solar energy can both reduce peak demand during the summer — in turn lowering power prices — and providing cost benefits for all customers.

El Paso Electric continues to contend that solar customers are passing on their share of the cost of maintaining the electric grid to non-solar users.

“El Paso Electric felt that it was in the best interest of its customers to settle the rate case with an uncontested settlement agreement,” George De La Torre, a spokesperson for the company, told the Observer in an email. “The costs of serving residential customers with solar systems will be addressed in a future proceeding. Until then, the cost to serve rooftop solar customers will continue to be subsidized by non-rooftop solar customers.”

State Senator José Rodríguez, who opposed the utility’s solar fee proposal, applauded the company’s decision to withdraw the solar surcharge.

“El Paso and far West Texas should lead the nation in solar energy development, and has in fact seen an enormous uptick in solar installations in the last year alone,” he said in a statement. “We should encourage this growth, which is good for the electric system, helps create jobs, and provides consumer options.”