In a move they acknowledge is “atypical” and outside of the usual ratemaking procedures of the state, the Massachusetts Department of Public Utilities has approved demand charges on residential rooftop solar customers.
Whether they intended to or not is irrelevant. Yesterday, the Massachusetts Department of Public Utilities (DPU) became one of the first state-level commissions to allow a utility to impose separate demand charges on residential customers, in this case on those who own their own PV systems.
It’s not that regulated utilities haven’t tried to get regulators to allow them to impose demand charges on solar customers before. It’s simply that regulators have generally rejected them as too confusing for residential customers to understand or monitor.
Demand charges are fairly routine for commercial/industrial customers because they generally have the technology on their systems to monitor their energy use and can adjust their peak use times accordingly. In general, residential customers don’t have the appropriate technology or understanding of their electricity use.
In the Massachusetts case, Eversource, the utility in question, asked to impose demand charges of $2.21 and $2.71 on its two classes of residential customers, arguing – dubiously – that the demand charges recover the “cost shift” that solar customers impose on other ratepayers because they don’t pay for grid upkeep.
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