The Orlando Utilities Commission shared on Tuesday its proposal for a slightly revised energy pricing plan, following criticism the municipal utility received on an initial version of the plan earlier this year.
The utility revised its “PeakSHIFT” plan in light of conversations with dozens of Central Florida stakeholders and industry experts over the last few months, according to OUC. The two main changes are to OUC’s proposed rooftop solar pricing framework, and how the utility would calculate the cost of electricity.
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PeakSHIFT would bring energy efficiency into OUC’s cost of electricity calculation, charging residential and small business customers between $5 to $15 a month, based on their energy usage or “demand level.”
Initially, OUC planned to base each customer’s “demand level” charge on their peak annual energy use. But community feedback prompted the utility to switch to gauging energy use on a month-by-month basis, instead.
“Let's reset this monthly,” said OUC Chief Customer Marketing Officer Linda Ferrone. “Let's set the signal clearly, so that customers can also begin to really understand their energy awareness here, and what drives them to that next tier.”
Although some customers would see their energy bills go up with the proposed demand charge, others would likely seek out ways to try and lower their bills by using energy more efficiently, according to OUC.
But critics of OUC’s plan argue the proposal actually runs counterintuitive to energy efficiency, because it disincentivizes small-scale solar power, like installations of rooftop solar panel systems.
For OUC’s rooftop solar customers, PeakSHIFT would create a new billing structure, shifting away from the net metering one currently in place.
Net metering allows rooftop solar customers to effectively be compensated “one-to-one,” for sending extra power back into the electric grid at the same rate it costs to generate that power, according to Solar United Neighbors Florida Program Director Heaven Campbell.
In fact, some studies indicate the value of solar is even higher than “one-to-one,” given factors like the cost of installing a rooftop solar system.
“The customer is doing the investment and the generation, the sharing to the grid,” Campbell said. “We are taking the burden off the grid for transmission and distribution.”
Over time, rooftop solar customers can earn back on their investment, receiving cost savings in exchange for the extra energy their systems generate and feed into the grid.
But under OUC’s proposed PeakSHIFT, those cost savings for rooftop customers would shrink: from the current 10.7 cents per kilowatt hour (kWh) rate, down to 4.6 cents/kWh, the rate for OUC’s community solar farm customers.
A change unveiled by OUC Tuesday offers a temporary escape route for existing solar customers, who could choose to opt out of the new net billing structure for 20 years. That option would be open to OUC customers with interconnection agreements set up before July 1, 2025, when PeakSHIFT is tentatively slated to begin.
But many critics say the 20-year exemption proposal, which OUC calls “grandfathering,” isn’t good enough. The exemption would only apply to the current customer/homeowner, not the premises; in other words, should someone else buy the property one day, the higher cost savings rate wouldn’t carry over to the next homeowner.
“This investment was made and my system designed with net metering in mind. It should extend to the life of my system,” said Orlando City District 4 Commissioner Patty Sheehan Tuesday, addressing OUC commissioners. “I don't want to be financially strapped in my eighties because of an unfair rule change.”
Ultimately, OUC’s proposal will foster a more equitable energy landscape, according to the utility: by incentivizing customers to monitor their own energy usage, and by reducing the burden OUC says non-solar customers are currently shouldering on behalf of customers with solar.
“It's not OUC that is picking up this cost, but our other customers,” Mindy Brenay, OUC’s Chief Financial Officer ex officio, told commissioners Tuesday. “All of our residential customers are picking this up.”
OUC General Manager and CEO Clint Bullock used himself as an analogy: as an electric vehicle owner, if he wants to charge two cars at the same time at his house during peak demand hours, he should have to pay his own way, Bullock said.
“Otherwise, the non-EV customers are going to be paying for the EV customers,” Bullock said. “I think we’re trying to get in front of these types of changes.”
“It is not lost revenue. It is not a cost you need to pass on to other customers,” Sheehan said. “OUC should consider it a benefit … It is one less power plant you have to build, once enough customers are supplying power.”
OUC board members didn’t vote on the PeakSHIFT proposal Tuesday, but are expected to vote on it at a December 10 meeting. OUC Board President Larry Mills said the goal is to not rush the process.
“This is not an overnight journey. This is a multi-year journey,” Brenay said.
