What are fixed charges?
Fixed charges are monthly fees you incur no matter how much power you consume. Increasingly, utilities are attempting to restructure electricity bills so that more of each bill is made up of these charges. These fees directly affect how much of your bill you can reduce through solar generation, efficiency upgrades, and conservation. They discourage efficiency and limit homeowners’ ability to save money by producing a portion of their own power through solar. Some utilities propose to more than double the fixed charges for ratepayers.
Fixed charges have been used to:
- Subsidize non-competitive power plants and extend their operation;
- Prop up insolvent utilities that have made bad investments; and
- Subsidize utilities’ construction of utility-owned renewable energy, which limits homeowners’ ability to benefit from distributed solar.
Solar United Neighbors is tracking attempts to raise fixed charges across the country. Increases can occur either through state public utilities commissions or directly through state legislatures.
- Solar United Neighbors of Ohio is currently engaged in a campaign in Ohio against new rate structures that seek to double fixed charges.
Fixed charges take many forms, but the end result is that you as the consumer lose control of your electric bill despite usage or offsetting solar power. Fixed charges are generally not fair, because they do not let you save money by using less energy.
Learn more about fixed charges and what is being proposed across the country:
- Fixed Charges: The good, the bad and the ugly – This article reviews the previous several years of utility attempts to increase fixed charges on their customers.
- Why fixed charges are a false fix to the utility industry’s solar challenges – In this Utility Dive article, Jon Wellinghoff and James Tong explain the misguided logic behind utilities’ attempt to penalize solar owners with fixed charges on their electric bills.
- The flaws in the utilities’ push for residential demand charges – In their second Utility Dive article, Jon Wellinghoff and James Tong detail how recent moves towards residential demand charges could confuse customers and harm ratepayers.
- Communicating to fight demand charges – This presentation from Resource Media provides a concise, useful guide for explaining demand charges and how to fight against them.
- Gulf Power withdraws plans for fixed-charge hike in Florida – This PV Magazine article reports on a Florida electric utility’s attempt to tack a bigger fixed charge onto its customers’ bills. The attempt, which would have increased the average monthly electric bill by $50, was thwarted after thousands of customers intervened at the Florida Public Service Commission.
- Texas utility proposes bizarre fixed charges for solar customers – This PV Magazine article outlines a Texas electric utility’s attempt to punish solar owners by adding a monthly fixed charge to their bill.
- The year in utility rate cases: mandatory fee hikes retreat as consumer voices pick up steam – This report from the Natural Resources Defense Council describes the growing push from utilities for fixed charges on their customers’ bills, how those charges harm ratepayers, and successful attempts at fighting them.
- Mandatory Fees: Utilities Fight the Future at the Expense of Our Civil Rights – The NAACP explains why the imposition of fixed charges disproportionately harms low-income communities and communities of color.
- EQ Research: Utilities failing at fixed charge increases – A new analysis of utility rate case filings finds regulators often rejecting the hikes on fixed charges that many utilities are asking for. However, the general direction of fixed charges is still upwards
Learn more about fixed charges in your state