- Associated Press - Friday, August 28, 2015

PELLA, Iowa (AP) - Facing a backlash from solar energy advocates and an inquiry from regulators, a rural Iowa electricity cooperative has dropped a plan to charge customers who install solar panels on their homes and businesses a special $85 monthly charge.

The Pella Cooperative Electric Association withdrew its proposal Thursday in a filing to the Iowa Utilities Board, which was considering a challenge from solar customers and environmental groups who argued the charge was illegal, unjustified and discriminatory.

Similar disputes between utilities and solar energy advocates are playing out across the country, but observers said the cooperative’s proposed interconnection charge was believed to be among the highest in the nation.

The cooperative, which serves about 3,000 members in rural southern Iowa, notified customers who already have or were planning to install solar generation systems of the new charge last month. The cooperative argued that the fee was justified because customers who generate some, but not all, of their own electricity use less from the utility’s distribution system and therefore pay less. The fee was meant to have those customers pay their equal share of fixed costs and avoid having other customers subsidize them, the cooperative argued.

In a statement, the cooperative said the fee wasn’t meant to discriminate against solar customers but that it would be withdrawn in light of the complaints.

“We need to ensure every member is being treated fairly,” the cooperative said. “Because we are a cooperative, we have decided to withdraw the proposed increase … until such time that we can better educate our members and the community as to the fair and equitable recovery of fixed costs.”

The news delighted Mike Lubberden, who halted his plan to install a solar array outside his Pella home after learning of the charge in July. He said Friday that he now plans to move forward but hopes the utility doesn’t try to resurrect the charge at a later date. He said the charge was “outrageous” and designed to discourage solar energy deployment.

He and other solar energy backers note that the cooperative receives some revenue from customer-owned generation systems: the coop pays 3.3 percent per kilowatt-hour for excess solar and sells it for 10.1 cents. They noted that solar arrays have benefits for the environment and energy grid.

The Office of Consumer Advocate had requested information and data about the fee as part of an inquiry into whether it would violate Iowa law, which bars charging “discriminatory rates” for customers who use renewable energy. The office, which represents utility customers’ interests, had been planning to update the board on its investigation next month.

The Environmental Law and Policy Center, which had intervened to challenge the proposal, said Friday the withdrawal was good news and should spark discussion about the role solar can play at rural electric cooperatives in Iowa.

“There are better ways to prepare for the energy future than imposing punitive and unjustified fees on members who are leading the way on renewable energy,” said Josh Mandelbaum, a Des Moines attorney for the group.

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