Ucilia Wang: August 6, 2009, 11:21 AM

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Xcel Ditches Solar Fee Proposal

Xcel Energy has opted to drop its proposal to charge Colorado customers with solar energy systems a minimum monthly fee for grid upkeep.

The utility's proposal had attracted an uproar from solar companies and from its customers. The state's Public Utilities Commission was due to hold a hearing on the proposal Wednesday, and that was canceled with Xcel decided not to pursue the plan for now.  

The new fee would've affected only new customers who install solar after April 2010.

Xcel said that many of its customers who own solar energy systems aren't paying their share of maintaining the grid because their systems typically generate more energy than they need. The customers send the excess electricity to the grid and get credits on the bills.

Because they don't owe the utility money at the end of the billing cycle, they don't pay the grid maintenance fee that is folded into the regular rate that non-solar customers pay.

By Xcel's calculation, a customer owning a 4.5-kilowatt system would pay about $1.90 per month under the proposal. But the fees could be a lot higher because it's based on each customer's use of electricity procured by Xcel, such as during the night when the solar panels aren't generating electricity.

Xcel's proposal appeared unusual. Investor-owned utilities in California, for example, don't impose a grid fee for their solar customers.