4.1. ERMUSR 11-15-2016 - Laserfiche WebLink

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Proposed Rates system for residential customers is $6.38/kW-month. It is proposed that the access fee be applied to the kW capacity of a customer's solar generation. This fee would apply to all capacity in excess of the average residential monthly demand of 3.6 kW. For instance, if a customer installs a 6 kW solar facility under a net metering arrangement, they would be charged $6.38/kW for 2.4 kW (the amount in excess of 3.6 kW) of the solar capacity equal to $15.31 per month. This charge would be in addition to the regular bills calculated under ERMU's regular rate in a net metering arrangement. Solar Access Charge 2015 Residential Data Item Rate Allocated Distribution Costs $2,525,903 Estimated Demand Billing Units 395,962 kW-mo Access Fee $6.38/kW-mo Economic Development Rates Historically, some utilities have implemented economic development rates as an incentive to help attract new commercial or industrial customers to locate in their service territory. Economic development rates are special rates offered to customers that meet certain criteria (jobs, electrical size, economic classification, etc). These special rates are lower than a utility's published rates and are generally offered for a limited time (3-5 yrs), after which time the customers rate will revert to the published tariff. These rates were particularly popular in the 1980s when many utilities had substantial excess generating capacity and marginal costs to serve were well below average embedded costs to serve. In today's cost environment, most utilities' offering an economic development rate are offering a subsidized rate that is supported by the utility's existing customers. New customers are happy to get an economic development rate, but the impact on the ability to attract new customers is often debated. If existing customers have to pay more to subsidize a new customer, many will think that is not a fair practice - 7 - 87