Reversing a state appeals court, the Kansas Supreme Court ruled Friday that utilities cannot charge higher rates for customers who partially produce their own energy via solar or wind power.
In a 14-page opinion by Justice Caleb Stegall, the state’s high court found rate increases by Westar Energy, now Evergy, and Kansas Gas and Electric for customers who use solar and wind energy violates the state’s anti-price discrimination law.
“By its plain text, [the state law] clearly prohibits the utilities from price discrimination against [customers who generate their own power], something the utilities admit they are trying to do,” Stegall wrote.
Under the utility companies’ rate plan, affected customers have been subject to a “demand charge,” which includes a flat fee of $3 in the winter and $9 during the summer. Stegall said such a plan goes against policy written by the Legislature.
“There is no question that the [customer] rate at issue here is not built on a time-of-use rate or a minimum bill,” Stegall wrote. “It is simply price discrimination. And this price discrimination undermines the policy preference of our Legislature… which has codified the goal of incentivizing renewable energy production by private parties.”
The fees, approved by the Kansas Corporation Commission in 2018, were opposed by environmental groups Sierra Club and Vote Solar who sued to reverse the decision.
Zack Pistora, a lobbyist for the Sierra Club said the decision makes headway toward “fairness” for solar and renewable energy users in the state.
“We knew that it was morally and economically unfair for the KCC and Westar to overcharge Kansas homeowners for generating their own electricity, but thought it to be illegal too. Fortunately, Kansas law agrees,” he said.
Earthjustice attorney David Bender argued the case for the environmental groups. He said the ruling recognized that charging solar customers is price discrimination.
“Kansans, like all Americans, have a right to the free solar energy delivered to their roofs every day without fear of illegal utility charges that serve only to preserve the utility’s anti-competitive monopoly and prop up uneconomic fossil fuels,” he said.
Gina Penzig, a spokesperson for Evergy, said they are reviewing the court’s decision and considering their next steps, “which may include asking for a rehearing.”
The decision comes as utilities nationwide implement increased fees in an effort to increase revenue amid the rise of renewable energy usage of homeowners.
Last December, state regulators in Georgia approved a massive rate increase for Georgia Power customers. The increase, which includes higher flat fees that target solar-using customers, will raise annual electric bills by more than $175 on average over the next three years.
In South Carolina last year, a proposal from utility Duke Energy to triple its monthly fixed fees was shot down after customers statewide opposed to the fees submitted comments to state regulators. While the utility was able to increase the fixed fees, they were not nearly as much as originally proposed.
Utilities nationwide are seeking to adapt to the increased use of solar energy by implementing increased flat fees. Last year, the United States surpassed more than 2 million solar installations, according to data from the Solar Energy Industries Association.
In Kansas, however, installation of new solar panels has decreased with Evergy’s increased fees. In 2018, the utility received 385 solar interconnection requests. In 2019, that number dropped by a third.
Friday’s decision remands the pricing issue back to the commission.
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