Westar Energy customers got a dose of good news-bad news from a settlement agreement the company reached with the state regulatory agency Thursday.

Residential customers were on the good news end of the spectrum, with the Kansas Corporation Commission approving a $66 million decrease in Westar revenue that will result in savings of about $3.80 per month for the average residential customer.

But solar customers who have connected to Westar's grid since October 2015 were hit with bad news that may increase their bills.

The KCC approved changes to the rate structure for distributive generation customers, who are typically solar users. What those customers pay for the energy they use will decrease by about 40 percent, but they will see a demand charge to be paid based on usage from 2 to 7 p.m. on weekdays. That amount is set by determining the highest average hourly demand during that time period.

Environmental groups and others have been battling against a demand charge, saying it restricts the growth of solar in the state and punishes customers who have invested in residential solar systems.

Penzig said the change addresses an out-of-date rate structure where other customers who don't have solar panels are picking up part of their costs.

Opponents vehemently disagree. Dorothy Barnett, executive director of the Climate + Energy Project, called the demand charge a "very regressive" move.

"We have asked consistently for the last three years for the commission to undertake a third-party independent study to determine the costs and the benefits to solar users and non-solar users," she said, adding that during an investigative docket her organization offered to pay part of an independent study to get to the bottom of fair pricing with regard to distributive generation. The utility companies wouldn't agree to the study, Barnett said.

It is unclear how much more solar customers — about 350 of whom will be affected by the new rate structure, Penzig said — will be affected financially. Each solar home system is significantly different and varies based on size of the house, efficiency, usage and other factors.

Penzig provided a series of examples of the impact based on customer demand and energy usage. Energy usage, measured in kilowatt-hours, is the amount of energy used in a month. The demand charge, measured in kilowatts, is a customer's maximum consumption that is measured over a shorter period of time.

Under the new structure, DG customers will face demand charges of $3 per kilowatt during the winter and $9 during the summer.

Penzig offered four examples of varied energy uses and demand charges to show the impact on a solar customer's bill. Customers with a lower demand and lower energy could actually see a small annual decrease in their bills under the new rate structure, she said. But a residential customer with a monthly demand of 6 kilowatts and monthly electricity use of 750 kilowatt-hours would see bills decrease in the winter months and increase in the winter months, leading to an overall increase of $73 annually, Penzig said.

Others during KCC hearings have estimated that some solar panel users could see their bills increase by $30 to $40 a month.

A rate calculator is available online at Westar's website to help customers determine the impact of the changes, Penzig said.

Barnett said she has spoken with solar panel installers who believe some of their residential customers with smaller systems will be better off disconnecting their solar panels and going back on the grid because of these changes.

"There is still a potential for savings with solar panels," Penzig said. "We estimated that depending on the size of the system and the efficiency of it, customers could still potentially save about 30 percent during a month."

Multiple options remain for Barnett's organization and other groups to fight the KCC measures they consider punitive, Barnett said.

One of those is getting the Kansas Legislature involved to make policy changes, as has occurred in other states.

"We're going to meet with the Clean Energy Business Council members face to face and try to determine what the best course of action is," she said.



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