Top 10 Utility Fee Fighters
By Karl R. Rábago, Executive Director, Pace Energy and Climate Center
For every investor-owned electric utility that proposes fixed charge increases, there is a regulatory commission or board to rule on the request. Which state utility commissions are doing the best jobs keeping the lid on fixed fees — mandatory monthly fees that customers must pay regardless the electricity they use? We took a look at commission decisions and actions in 2018 and so far in 2019 to see which are standing strongest against excessive fixed charges on residential utility customers.
Michigan: Standing strong
In May 2019, the Michigan Public Service Commission blocked an attempt by DTE Energy to slap a $15 monthly fee on new rooftop solar customers, as well as increase fixed charges on all residential customers from $7.50 to $9 a month. In the last four rate cases brought before the Commission over the last four years, DTE Energy has attempted to hike fixed charges. The Commission stood strong and denied them all, keeping the charge at $7.50/month since 2015. And in 2018, the Commission denied Indiana Michigan Power’s request to increase its monthly fixed fee by 148%, keeping it at $7.25, as opposed to $18.
South Carolina: Slap down
Also in May 2019, the South Carolina Public Service Commission sent a clear message to Duke Energy that it can’t get away with outrageous fee hikes. The utility sought to triple the amount it charges its customers in two service territories from $8–9/month to $28–29/month. If approved, the charges would have been the highest mandatory monthly fixed fees of any investor-owned utility in the nation. Regulators called Duke Energy “tone deaf” on how such a drastic increase would have harmed its customers, particularly low-income households. Commissioners also disallowed Duke Energy from rate-basing a significant portion of its top executives’ multimillion-dollar annual salaries.
Ohio: Solid as a rock
The Public Utilities Commission of Ohio is a heavyweight champion for the number of crazy high fee hikes it knocked out over the last year. The most recent was a proposal from Duke Energy to jack up fixed fees on their customers 280 percent, from $6 to $22.77/month. In 2018 alone, Ohio Commissioners decided on six different proposals from utilities to increase fixed fees — five of them seeking to at least triple existing charges. In the end, Commissioners only allowed one fee increase from Dayton Power and Light, which went from $4.25 to $7/month, but far less than the $13.73 monthly fee DP&L had initially requested.
New York: The Empire State strikes back
In April 2018, the New York State Public Service Commission reached a deal with Central Hudson Gas & Electric and other rate case parties whereby the utility agreed to roll back fixed charges for residential electric customers from $24/month to $19.50, and for residential gas customers from $26/month to $24.25. The utility originally sought to increase fixed charges for both customer classes to $25 for electric and $30 for gas customers. The NYSPSC was among three utility commissions that actually lowered fixed fees in the first half of 2018, with the Kansas Corporation Commission following suit in October to make it four (see below).
The NYPSC continued that trend in March of 2019 with its order to approve a joint settlement proposal in the Orange & Rockland Utilities, Inc. rate case that reduced the utility’s residential fixed charge from $20 to $19.50/month. The utility had initially proposed increasing the fee to $22. The Central Hudson and Orange & Rockland decisions are the latest in a series of NYPSC orders that have held the line against increases in residential fixed charges, starting with Central Hudson (June 2015) , New York State Electric and Gas / Rochester Gas and Electric (June 2016), Con Edison (January 2017), and National Grid (March 2018).
New Mexico: Lights out on solar surcharge
In January 2018, the New Mexico Public Regulation Commission held back a near doubling of Public Service Company of New Mexico’s monthly fixed charge from $7 to $13.77, only allowing an 11 cent increase to $7.11. In fall 2018, Commissioners also adopted an administrative law judge’s decision to terminate the utility’s surcharge on solar customers — a fee that typically cost solar customers more than $300 a year.
Arizona: Let the sunshine in
The sun smiles brightly on the Arizona Corporation Commission, which in Sept. 2018 rejected proposals from Tucson Electric Power and its subsidiary UNS Electric to impose a grid access charge on new solar customers and significantly increase meter fees on existing residential and small commercial solar customers. The proposed grid access charge would have cost about $24/month for a typical residential solar customer and $33/month for a small commercial solar customer.
Colorado: No Rocky Mountain high fees
In June 2018, the Colorado Public Utilities Commission not only denied Black Hills Energy’s bid to increase fixed charges from $16.50 to $20.13/month, but also ordered the utility to chop it in half to $8.77. Commissioners were apparently swayed by arguments from local advocates that the high fees would have harmed lower-income households and discouraged energy conservation.
Oklahoma: Let’s make a deal
In May 2019, an Administrative Law Judge for the Oklahoma Corporation Commission recommended adoption of a settlement agreement between state regulators, AARP of Oklahoma, Oklahoma Industrial Energy Consumers, Walmart, the federal government, and Oklahoma Gas & Electric that held off the utility’s proposed 4.4% overall rate hike and fixed charge increase from $13 to $22/month.
Connecticut: Cutting it down to size
In April 2018, the Connecticut Public Utilities Regulatory Authority not only denied Connecticut Light & Power’s request to keep its $19.25/month fixed charge on customers, but ordered the utility to cut it by more than half to $9.21, along with halving the utility’s overall rate increase request.
Kansas: One step forward, one step back
In October of 2018, the Kansas Corporation Commission became the fourth utility commission that year to lower existing fixed charges for utility customers. Commissioners approved a settlement agreement with Kansas City Power & Light, which sought to increase its fee from $12.62 to $15.17/month. Under the settlement agreement, it was trimmed back to $11.47. Unfortunately, at the same time, the Commission okayed a new charge for solar customers.
We salute these state commissions for working to keep fixed fees as low and fair as possible for utility consumers.
What makes a fixed fee fair or not? Watch this explainer video on fixed fees (and donuts) to find out.
