‘Before it becomes a California sized problem’: PEC reduces incentives for solar customers

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AUSTIN (KXAN) — Despite heated public comment surrounding incentives for solar customers, Pedernales Electric Cooperative will nearly cut in half the amount of money paid back to customers who produce energy for the grid.

Randy Kruger, chief financial officer for PEC, pointed to recent changes to the solar energy buyback system in California and said PEC is trying to get ahead of the issue before it “becomes a California sized problem.”

The issue, according to Kruger, is that through solar buyback programs, which have been used nationwide as an incentive for customers to buy into clean energy, companies are paying solar customers significantly more than the market rate. That drives up costs for other customers.

While the cost of energy delivered to PEC customers, solar customers included, does not change at roughly 9.3 cents per kilowatt hour (kWh), the amount PEC will buy back from its solar customers will drop down to roughly 5.4 cents per kWh.

Additionally, PEC will not provide an environmental incentive to those customers providing energy for the grid.

“If we pay something for environmental cost, if we pay someone $1 for environmental cost, we’ve got to take that from another member,” Randy Kruger, CFO of PEC said. Kruger noted if state legislators passed a carbon rate, that could change.

“If we were to continue purchasing energy at 9 kWh, we would have to more than double the energy charge for our non-solar members,” Kruger said. “That would create a particular burden for those who cannot afford it, for those who cannot afford a $15,000 solar system are going to be most impacted by this.”

Rep. Erin Zwiener, from House District 45, doesn’t agree with that sentiment, that solar equipment is a luxury purchase, nor does she agree with the buyback rate change.

“The cost has shifted and everyday people are able to invest in panels and have them pay back,” Zwiener said. “This just doesn’t make sense.”

That’s also something several PEC members who have solar panels discussed during Friday’s meeting, where the board voted unanimously to pass the change Friday morning.

“I’m not a rich man, I based a lot of decisions on the cost of my power and my panels and where I could possibly break even,” Richard Hrabik said. “Not everybody that has solar is rich, mine was a lot based on how I could repay it.”

Now, the payoff for Hrabik is significantly reduced, he said. Of the roughly dozen people that signed up to speak Friday, most shared that same concern.

“This is not for rich people only anymore, I am certainly not a rich person, I’m a working-class Joe,” said Jefferson Chesier. “My 20-year payback goes to longer than my life expectancy.”

Rep. Vikki Goodwin, of House District 47, noted this might discourage people from moving to clean energy, which could impact our climate in the long-term, especially for the population of people generally covered by PEC.

“Solar power being clean energy is something that we should be encouraging and incentivizing,” Goodwin said. “We are going to have to take some bold steps to move forward towards clean energy.”

Meanwhile, Kruger said PEC can’t continue to pay customers with solar equipment more than the market rate for the sake of their more than 350,000 customers who don’t use solar.

“Our rate action really has nothing to do with whether or not we support renewable,” Kruger said. “It’s really about fairness.”

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