Cypress Creek Renewables alleged in a filing with the Maryland PSC that the Community Solar Energy Generating System Credit Rates (the CSEG Credit Rates) posted by the Potomac Electric Power Company (Pepco) on its website, "violate the Commission’s regulations implementing the Community Solar Pilot Program (the 'Pilot Program'), due to the exclusion of certain taxes from the compensation rate."

Cypress Creek alleged that Pepco's CSEG Credit Rates exclude three taxes that are billed based on kWh consumed: (1) the Montgomery County and Prince George’s County Energy Taxes; (2) Gross Receipts Tax Surcharges on Transmission and Distribution Rates; and (3) the Franchise Tax (Delivery).

Cypress Creek alleged, "The Pilot Program regulations instruct that if an 'electric company chooses to apply [a dollar credit on subscriber’s bills], the electric company shall apply a credit no less than the value to the subscriber of the credit had it been applied to the subscriber’s bill as a reduction in metered kilowatt hours.'"

Cypress Creek alleged, "Pepco’s posted CSEG Credit Rates violate the regulations because they exclude these three volumetric taxes. The problem is easy to conceptualize. A rooftop solar customer would not pay these taxes for electricity generated by its system because the tax is charged based on the total kWh consumed from the grid net of the kWh produced by the rooftop array. No kWh, no tax. Community solar subscribers receiving credits must be treated the same way, but will not be if Pepco’s calculation is permitted."

Cypress Creek alleged, "Under the Pilot Program, an electric company may elect to offset a subscriber’s monthly electric bill by either: (1) reducing the total kWh consumed on the customer’s bill by the kWh generated by the CSEG for the subscriber or (2) applying a credit to the customer’s bill calculated by multiplying the kWh generated by the CSEG for subscriber by a predetermined credit rate. If an electric company elects the second option, the regulations require that the credit reflect all volumetric charges on the customer’s bill, such that the credit provides the same total bill reduction as would have occurred if the electric company had used the kWh reduction method. The exclusion of these three taxes is inconsistent with this requirement."

Cypress Creek alleged, "the Commission has already spoken on this issue. At the January 11, 2017 Administrative Meeting the Commission reviewed Pepco’s revised tariff pages and Compliance Plans for implementing the Pilot Program. On February 15, 2017 the Commission issued a Letter Order including the following directive: 'The Commission reiterates that each utility’s tariff must comply with COMAR 20.62.02.04D, which states that if a utility chooses to apply the community solar bill credit as a dollar credit, the applied credit must be 'no less than the value to the subscriber of the credit had it been applied to the subscriber’s bill as a reduction in metered kilowatt hours.'"

Cypress Creek alleged, "This failure threatens all stakeholders in the Community Solar Program. Subscribers lose out because they will not receive the full credits to which they are entitled. Subscriber organizations face unwarranted and significant legal, financial, and reputational risk. Most seriously, this error jeopardizes project financing, undermining significant investments made to date and worrying investors who are crucial to realizing constructed projects."

Tags:
Maryland   Solar   Community solar  

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