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Kansas justices strike down electricity rate hikes on green energy producers

National Wind Watch

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, ...


Mark Silverstone's picture
Mark Silverstone on Apr 8, 2020 12:49 pm GMT

It's unconscionable that the utility would even try this. It's a shame that it took the state's highest court to shoot it down. And, by all indications, the utility won't leave it at that.

Matt Chester's picture
Matt Chester on Apr 8, 2020 4:08 pm GMT

The incentives and the various stakeholders are getting more complex, more mixed up than they were ever meant to be when the current utility structure came to be decades ago. Definitely seems like some sort of large-scale transformation is going to have to come sooner or later to represent the 21st century realities

David Magill's picture
David Magill on Apr 10, 2020 3:12 pm GMT

Story wasn't clear to me, but it reads as if the utility was charging solar/wind customers an extra $3 in the winter or $9 in the summer. That sounds discriminatory. However, if the utility has 70% fixed costs and 30% variable costs, it would seem non-discriminatory to charge a flat fee related to the users proportion of the fixed costs and a per KWh fee to recover the 30% cost. I suspect that would decrease industrial costs and increase all residential costs. 


Matt Chester's picture
Matt Chester on Apr 13, 2020 1:39 pm GMT

Thanks for your insights, David. I wanted to dig a bit deeper, and pulled this from the court's opinion:

Under this plain language analysis, we can discern no conflict between the statutes. On the one hand, K.S.A. 66-117d is an antidiscrimination provision that prohibits utilities from charging DG customers a higher price than non-DG customers for the same service. K.S.A. 66-117d focuses on the price of the goods and services sold by the Utilities. On the other hand, K.S.A. 66-1265(e) addresses rate structure rather than price. K.S.A. 66-1265(e) allows utilities to propose separate rate structures that would apply to all DG customers that began generating their own electricity after 2014. The Utilities argue that K.S.A. 66-1265(e)'s language permits utilities to charge DG customers a higher price than they charge to non-DG customers, reasoning that a change in rate structure necessarily impacts price. And this means the two statutes conflict, evincing a legislative desire to repeal K.S.A. 66-117d.

David Magill's picture
David Magill on Apr 13, 2020 9:13 pm GMT

Thanks for the clarification, Matt. DG's position on the conflict and argument seems incorrect. The two statutes together would simply imply that the new rate structure, in all details, would have to be less than that charged to a non-DG customer. I agree that produces real problems with renewables where it is not uncommon for a renewable generator to offload excess capacity at near zero, and sometimes negative price.

I'm going to assume that a utility in another state is a non-DG customer. I'm at a bit of a loss in that I don't know the definitions of a "DG customer" and a "non-DG customer." In my world everyone we sell to is a LISCO customer. I'm assuming here that a DG customer is someone that the Kansas utilities commission is trying to protect. They surely don't disallow selling excess capacity at wholesale or instantaneous market rates, do they. Maybe DG doesn't generate? 

Still, this does bring out that a Kansas utility under current law cannot be expected to repurchase KWs from a residential customer at retail when solar/wind generates more than needed, and it is impossible to sell it at wholesale and very costly to build battery storage infrastructure.

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