Kansas City Power & Light (KCP&L) has submitted a filing to the Missouri Public Service Commission to put a limit of $21 million for 2013 solar rebate payments in Missouri, as required by Missouri state law.
In 2008, Missouri voters passed Proposition C, a renewable energy mandate requiring investor-owned utilities in Missouri to generate a certain portion of their electricity from renewable resources. Proposition C requires utilities to offer a solar rebate program, which offers customers a $2-per-watt rebate on solar installations.
Under Missouri law, the costs of the solar energy rebate program are shared among all KCP&L customers, not just those who are making investments in solar technology. In order to protect customers from large rate increases, the payment of solar rebates each year is subject to an annual 1% electric retail rate impact cap. This means that the amount that KCP&L spends on renewable energy, including the solar rebates paid to customers, cannot exceed a 1% increase in rates affecting all KCP&L customers in Missouri.
KCP&L's filing with the Missouri Public Service Commission states that the 1% cap in KCP&L's Greater Missouri Operations (GMO) service territory equates to slightly more than $10 million annually. As of June, KCP&L already had received applications for $22.2 million in solar rebates in its GMO service territory and estimates that by year-end, it will receive nearly $51 million in solar rebate applications for all its Missouri service territory. The filing also notes that the KCP&L Missouri service territory (the Kansas City metropolitan area) is expected to exceed the 1% cap by November.
Therefore, as part of the filing, KCP&L has requested approval to suspend solar rebates for KCP&L's GMO service territory beginning on Sept. 3 and lasting until Jan. 1, 2014.
When the volume of solar rebates causes the cap to be reached for a given year, KCP&L will continue to accept rebate applications at the dollar-per-watt rate for the time period in which the system becomes operational.
However, payment of the solar rebates will be postponed until the first quarter of the following year when funding will again become available. The rebate program will continue to be funded every year up to the 1% cap until 2020, when solar rebates will be phased out and no longer available in Missouri. These rebates currently are set at $2 per watt and will decrease gradually over the next several years.
"Managing these costs and ensuring customer rates won't exceed one percent (for solar) is the reason we are suspending these rebate payments until next year," says Chuck Caisley, vice president of marketing and public affairs at KCP&L." And, even with the one percent cap in place, the solar rebate program will invest more than $100 million in the solar industry over the next six years, making it one of KCP&L's largest programs."
Additional information about the solar rebate process is available here.