Kruger: Holy Cross Energy must reconsider its new rate structure
Colorado Solar and Storage Association
Holy Cross Energy has long been at the forefront of progressive climate policy and the move to renewable energy. That’s why I am left scratching my head at their new electricity rate proposal, which is inconsistent with Colorado’s statewide solar laws.
This new proposal is a wet blanket for solar adoption in the region and will heavily impact small electricity consumers — those who are struggling most to make ends meet in the Roaring Fork Valley. The Holy Cross Board needs to hear your thoughts on this change.
The proposed rate change will fundamentally change how Colorado solar customers are compensated for their clean energy. State law requires rural electric cooperatives, like Holy Cross Energy, to offer net energy metering, which compensates solar customers for the clean energy they send back to the grid. This policy helps reduce the strain on the grid and reduces reliance on historically fossil-fueled resources.
Since 2008, the Colorado net metering law for cooperatives has required utilities to provide full utility bill credits for the electricity generated by rooftop solar. However, Holy Cross Energy’s new rate structure proposes to provide only partial credit.
Holy Cross Energy is unilaterally reinterpreting established net metering law, negatively impacting residents, businesses, and the communities it serves in the process. As Colorado’s legislature has made clear, Colorado’s net metering policy should be uniform, decided at the state level, and should not be restructured utility-by-utility.
These rate changes will reduce compensation to levels that discourage customer investment in solar. According to our analysis, customers who purchase solar and solar plus energy storage projects won’t recoup their investments until after equipment warranties expire.
But many local building codes require solar installations for new buildings. Reducing the payback for the solar installations increases costs for new construction, putting upward pressure on housing prices in our mountain communities.
Holy Cross Energy’s new approach will also slow local communities’ efforts to combat climate change.
Many local communities — such as Aspen and Basalt — have instituted climate action plans and progressive building codes that address our climate crisis. We applaud that work. This rate change will undermine these steps forward. The new rate disincentivizes residents and businesses from doing their part to fulfill their role in those very same local climate action plans.
This change will also create inequities for future solar adopters. While the approximately 2,500 solar customers within Holy Cross Energy’s territory have been able to take advantage of Colorado’s net metering policy, anyone adding solar and energy storage after Sept. 1 would not.
Holy Cross is changing their rates just as solar is coming down in price. When combined with the extension of the Federal Tax Credit, solar is emerging as an economically-viable option for middle- and lower-income community members. Now is not the time for Holy Cross to change its rates and policies to disincentivize solar just as it becomes within reach for more consumers.
Finally, apart from the impacts to solar, the introduction of a residential demand charge will increase the monthly bills of middle-income residents without solar, while providing a break to homeowners of some of the largest homes in the area.
Our analysis shows that despite the 2% average overall increase in rates across the entire Holy Cross membership — the goal stated by Holy Cross — there is a dramatic difference for individual members based on home size and consumption. When fully implemented in 2025, smaller homes and townhomes/condos stand to see bill increases in the range of 8%-18%. Conversely, larger homes (4,500-6,000 square feet) could see their bills drop by 5-17%! Utility rates should encourage efficient energy use regardless of income or the size of home.
As a rural electric coop, it is essential for Holy Cross Energy to do what’s best for the community – but not at the expense of their own preservation. For those concerned about Holy Cross Energy’s longevity, this change is not necessary for Holy Cross’s economic health. Holy Cross Energy is financially stable and profitable. The cooperative increased member dividends and took in higher revenues from 2021 to 2022.
We invite all Holy Cross Members to make your voice heard. If you are a Holy Cross member, please visit http://www.cossa.co/sign to add your comments. Additionally, all members are invited to attend the Holy Cross Energy Annual Member Meeting on June 15 at the Arts Campus at Willits.
Together, we will work hard to do what’s best by the people of the Roaring Fork Valley and the climate we share.
Mike Kruger is the president and CEO of the Colorado Solar and Storage Association.
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