Environmental groups express concern over minimum bill proposal before Task Force

With the month of April coming to a close, the Net Metering and Solar Task Force is preparing a set of final recommendations for the legislature.  Among them, is a possible recommendation to implement a minimum bill for all electricity ratepayers.  A minimum bill sets the floor for electricity bills.  Their appeal, from the utility perspective, is that they effectively guarantee that every electricity account will have to pay some amount of money to the utility every month regardless of how much electricity is used, solar power is generated, etc.

A handful of environmental groups sent a letter to the Net Metering and Solar Task Force on Friday requesting that minimum bills not be including in the final set of recommendations.  The letter noted that minimum bills (and fixed charges) can have a disproportionate impact on low income ratepayers and energy efficient users. For an illustration of how minimum electricity bills (including fixed charges) can impact low energy users, read this analysis performed by the National Consumer Law Center for a Wisconsin proceeding on fixed charges.

NOTE: Fixed charges and minimum bills are not the same thing. A fixed charge is a fee added to an electricity bill, above and beyond kWh charges for electricity use.  For example, if there is a fixed charge of $5 per month and a household uses $50 of electricity in one month, the total electricity bill is $55.  A minimum bill, on the other hand, sets the minimum amount of kWh charges a user has to pay every month.   In the same example, if there's a minimum bill of $5 per month and a household uses $50 of electricity, the total electricity bill is $50.  Just like fixed charges, however, minimum bills can adversely impact low income households, efficient users, and low user accounts (e.g., vacation homes) when the kWh monthly consumption is lower than the minimum bill amount.  For example, if a minimum bill is set at $20 per month but a low income user consumes $15 of electricity in one month, the total electricity for that month will be $20 or $5 more than the user would otherwise have had to pay.