Deep inside general rate cases, dozens of U.S. utilities have proposed changes that would erode the value of customer-sited distributed energy resources (DERs), as well as energy efficiency and energy conservation. These proposals include:

• Significantly raising monthly fixed charges for residential customers and small businesses.
• Imposing demand charges or “grid access” charges on residential customers.
• Imposing new charges (including demand charges) on DER customers.
• Creating a separate customer class for DER customers.
• Altering the value of net metering, or eliminating it altogether.

The U.S. map below indicates where rate cases for investor-owned electric utilities were active as of September 30, 2017. Scroll over any state to find out which utility or utilities have pending rate cases in that state.

Eight utilities filed new rate cases in Q3 2017. Of those utilities, all but one proposed raising their monthly fixed charges for residential customers (see Figure 1). Three utilities proposed raising their residential fixed charge by 50% or more, with two of those utilities proposing to raise their fixed charge by nearly 150%.

In Kentucky, Duke Energy proposed raising its monthly residential fixed charge from $4.50 to $11.22. In Indiana, Indiana Michigan Power seeks to raise its fixed charge from $7.30 to $18.00. (Similarly, Indiana Michigan Power is also seeking to raise its fixed charge in Michigan from $7.25 to $18.00.)

Interestingly, in New York, Central Hudson Gas & Electric proposed raising its lofty existing monthly residential fixed charge by only $1.00 (from $24.00 to $25.00). However, Central Hudson also proposed establishing a new, tiered, monthly “service size charge” that is based on a residential customer’s annual kWh consumption. If approved, this new charge would add up to $4.00 per month in additional fixed costs.

Figure 1: Proposed Residential Fixed-Charge Increases — Rate Cases Filed in Q3 2017

© 2017 EQ Research

Of the five rate cases decided in Q3 2017, state regulators approved higher fixed charges for residential customers for four utilities. Most of the increases approved were minimal or modest, with the exception of APS’s rate case, in which Arizona regulators allowed APS to raise its monthly fixed charge from $8.67 to $15.00 for most customers.

Notably, those five utilities had proposed raising their standard residential fixed charges by a range of 27% to 177%, with an average proposed increase of 69%. State regulators allowed increases ranging from 0% to 73%, with an average approved increase of 26%. If outlier APS is excluded, the average approved increase drops to only 14%.

Figure 2: Existing vs. Proposed vs. Approved Residential Fixed Charge Increases – Rate Cases Decided in Q3 2017

© 2017 EQ Research

Figure 3: Existing vs. Proposed vs. Approved Residential Fixed Charge Increases – Rate Cases Decided in Q3 2017

© 2017 EQ Research