CFU and Solar Customers
on Wednesday, April 24, 2019
Recently, there has been a lot of information in the news about a bill in the Iowa legislature that could change customer-owned solar generation in Iowa. Called the SOLAR (Solar Options Lead to Affordable Renewables) Act, it has generated many opinions across the state. It would affect Iowans that are served by utilities such as MidAmerican and Alliant.
Because CFU is a municipal utility governed by our local Board of Trustees, the proposed SOLAR bill would not apply to CFU or affect our service policies or rates. We have not taken a position on the bill. However, many municipal utilities across the state (including CFU), already have rates in place similar to one of the options proposed in the bill.
Cedar Falls Utilities offers an Energy Exchange Rate for customers with private solar panels. We pay customers on the Energy Exchange Rate for excess energy when a customer’s solar panels are producing more energy than a house is using.
The credit we pay the customer for excess solar energy is based on CFU’s cost to buy electricity from the energy market. The credit rate for excess customer solar energy is set annually by evaluating the cost of transmission, capacity and the market rate for electricity delivered to Cedar Falls over the full prior year. The rate structure is intended to fairly compensate the owners of solar panels for the value of excess energy that they choose to sell to CFU. We believe this serves our solar customers and non-solar customers equally well. We pay our solar customers for energy at the cost we normally pay for electricity, which keeps our energy supply costs low for all customers.
Many times, customers with solar panels need to purchase energy from CFU to supplement the energy generated by their solar panels. The rate we charge customers for energy usage is higher. That is because some of the costs of building, operating and maintaining the electric grid are recovered through the energy charge to customers. Customers who own private solar generation use the electric grid as much as other customers because they buy and sell energy from the utility. CFU’s rates are setup to fairly distribute all costs. We plan our rates to be nondiscriminatory to all customers, whether you own solar panels or not.
The solar bill currently being considered in the Iowa legislature gives utilities such as MidAmerican and Alliant the ability to recover the costs associated with building and maintaining the electric grid from solar customers. The bill also gives their customers the ability to choose from a variety of rate options. Those utilities are supporting this legislation because current rate structures that do not recover the grid costs appropriately from solar customers can cause customers who do not own solar to pay a disproportionate amount of the infrastructure costs.
CFU is in favor of rate structures that allow utilities to recover the cost to serve all customers. The proposed solar legislation will not change our practices, we will continue to offer utility rates that are fair to all customers in Cedar Falls.
More information about customer-owned solar & wind in Cedar Falls