Xcel Energy is proposing a fee for its Colorado customers who feed their excesssolarelectricity to the grid, a practice that some say would dampen consumers' demand for solar.

The utility has asked the Colorado Public Utilities Commission for approval to impose that fee, which Xcel estimates would be around $1.90 per month, or $23 per year, for a customer who owns a 4.5-kilowatt system.

Xcel said the fee is fair because solar energy system owners not only send the solar electricity they don't use back to the grid during the day, they also rely on electricity supplied by Xcel during the night.

But it's easy for these customers to avoid paying for the costs of maintaining the grid, said Tom Henley, a spokesman for Xcel.

That's because when the bills are tallied, what these customers get from "selling" the excess solar electricity at retail rates to Xcel is greater than the cost of using Xcel's electricity. The customers get credits on their bills for feeding the excess electricity into the grid instead of getting a payment from the utility.

If they don't owe Xcel money, then they don't pay for the grid maintenance cost, which is folded into the electric rates that non-solar customers pay. Xcel current charges 9 cents per kilowatt hour for electricity it procures.

"We don't think solar power customers should have access to the backup of the grid and access to the grid for selling energy without paying for it," Henley said.

Henley declined to disclose how much the utility believes it could have collected from those solar energy system owners.

Solar energy advocates see the proposed fee as a penalty. Beth Hart, head of the Colorado Solar Energy Industries Association, told the Wall Street Journal that the cost could decrease demand for solar energy systems.

Xcel appears to be making an unusual request. Investor-owned utilities in California, for example, don't levy such a fee. If Xcel gets its wish, other utilities might follow.

"We are doing anything we can to encourage our customers to go solar," said Vanessa McGrady, a spokeswoman for the Southern California Edison.

The public utilities commission is scheduled to hold a hearing on the proposed fee next Wednesday. Xcel's proposal calls for imposing the fee on customers who install solar energy systems after April 2010.

Only customers who take advantage of the utility's solar rebate program would be subject to the fee.

The program, which began in March 2006, has enrolled about 5,660 residential and commercial customers to date. Funding for the program comes from a 2 percent charge tacked onto the monthly bill. But those who don't owe Xcel for power used don't pay for the charge.

The program has doled out $86 million worth of rebates, Henley said.

Although Xcel estimates that the fee would be roughly $1.90 per month for a customer with 4.5-kilowatt system, the actual fee could differ widely.

Xcel would determine a minimum fee for each solar customer that is based on the power used by that customer over the preceding 11-month period. The utility would take the peak use during that period and multiply it by 26 cents per kilowatt hour to come up with a minimum fee for the monthly bill.  

The peak power refers to the electricity provided by Xcel to the customer.

Solar power customers would pay the minimum amount unless they use so much of the electricity provided by Xcel that they would simply pay for the Xcel energy at the same rate as other non-solar customers.