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Black Hills Energy Wants to Charge Home Solar Producers for Producing Homemade Power

Black Hills Energy doesn’t want solar power to be South Dakota’s Next Big Thing. They’re asking the Public Utilities Commission to authorize charging homeowners for the electricity homeowners make with their own solar panels:

“We have a garden. It would be like the grocery store saying we have to pay for the vegetables we pull out of our own garden because they’ve put in the infrastructure of the coolers and the distribution network…,” Jeremy Smith of Cycle Farm said [Angela Kennecke, “Proposal Puts Cloud over Future of Solar Energy in South Dakota,” KELO-TV, 2021.05.13].

Spearfish sustainable-building mogul Jared “Cappie” Capp says Black Hills Energy’s proposal to charge customers for every kilowatthour generated onsite or off, lower the buyback rate for onsite-generated power to 2.48 cents per kWh, and tack an extra $10 a month onto home power producers’ meters would mean “any sort of small scale renewable energy in South Dakota is dead; 100 percent dead.” A similar policy in Nevada had that mortal effect on solar jobs and business growth:

In 2016, Nevada’s Public Utilities Commission agreed to phase out incentives for homeowners who install rooftop solar panels, after the state’s largest energy company argued the same things as Black Hills Energy: that when solar customers don’t pay to maintain the grid, non-solar customers are stuck with the bill. The Solar Energy Industry Association estimated that more than 2,600 jobs were lost when the large solar companies stopped doing business in Nevada because of the change. A year and half later, new legislation in Nevada modified the ruling and the solar companies returned.

Solar advocates say the same thing could happen in South Dakota with solar energy companies like GenPro in Rapid City, should the PUC approve the new tariff.

“There are entire companies in the Northern Black Hills that would essentially be rendered useless if this was; this is their business model to sell small scale solar,” Capp said [Angela Kennecke, “How Solar Power Could Go Dark in South Dakota,” KELO-TV, 2021.05.13].

The notion that I should pay for energy or vegetables or anything else that I produce is bonkers. If I hook up solar panels and a bike generator to my house, I shouldn’t have to pay anyone else a penny for the electricity that the sun and I generate that powers my lights, computer, and fridge.

But I understand the utilities’ argument as well: my electric bill pays not only for the juice but for the wires that will bring me that juice the moment the sun goes down and my batteries and legs give out. Even if the sun shone all day and I pedaled all night and not one watt from the outside world had to flow to my outlets, I’d still have to pay NorthWestern Energy for the upkeep of their grid. Power utilities, like water systems and roads and other infrastructure, are necessarily collective affairs: we all pay to maintain the network so everyone can use it.

Advocates of solar power and other small-scale renewables could completely insulate themselves from the monopoly gridsters’ predations by going completely off the grid. But building for complete onsite energy independence would still upend the economic calculations of solar installers who figure a big benefit of going producing one’s own power is being able to sell the excess and switch smoothly to the grid when the home system underproduces.

The PUC needs to find the right compromise. That compromise needs to include fair compensation for services rendered by all parties, utilities and homeowners alike. That compromise should recognize the value of the shared power infrastructure as well as the value of encouraging innovation and new jobs.

But at base, that compromise must not include charging homeowners for power they make themselves.


  1. Richard Schriever 2021-05-14 08:37

    The PUC doesn’t need to figure a “compromise”. The utility companies have actuaries on staff who perform those calculations (cost of production (or purchase), cost of delivery, cost of maintenance, cost of upkeep/repairs) on essentially a minute by minute basis. What the PUC needs to figure out is how HONEST the utility companies are being about the figures they present to the PUC on a regular basis as justification for rate changes (always upward as far as I know). They then need to do what they usually do, and are mandated BY LAW to do, set a rate that fairly compensates the utilities (and producers) at levels that reflect the actual COSTS incurred by the utilities – including the rate they PAY for someone else to produce the energy they use. Utility companies PURCHASE energy from producers other to themselves as a regular course of business. There is nothing in the production of energy by home/business owners that is ANY DIFFERENT to the production of energy by the “traditional” provider/producers utilities have always done business with – for nearly a CENTURY now.

  2. jerry 2021-05-14 09:28

    Black Hills Energy lost almost a Billion bucks to the Texas ice storm (ask them how much they lost and why). They don’t have any money so they are gonna do what they need to do just to stay afloat. They raised our rates just after the storm because we had a couple of days when it got kinda cold. Duh, it’s South Dakota and cold is what we are and we live with it.

    Iberdrola in Spain, a huge electrical utility, now will sell and install your solar panels and all the components to make it run on your home. They then break it down so that if you use less than you produce, you can either sell it back or you can use it as a credit for when you will need it (of course you will). For an average 4 bedroom home, considering at least 40%-50% of electrical needs, you can put solar in your home for about $75.00 a month, not counting subsidies.

    The PUC has not been doing their job to protect consumers in the wild wild west. To interested in dividends and political contributions.

  3. Jake 2021-05-14 11:29

    Black Hills Energy already is being compensated for expenses for the grid by their hook-up charges and current rates approved by their friends at the PUC. The 70 million dollar building they recently put up in Rapid City was and is being paid for by their customers. They are operating as a corporation will after reaching a certain size; with arrogance toward their responsibility to anything but the bottom line dollar figure of said corporation; with greed and power for more money.
    They should instead be searching for ways to ENCOURAGE customers to add solar production to the grid to offset theirs and national need for more polluting power from coal, gas or nuclear.
    This could be done by leasing solar units, help in installation and research toward better and more efficient ones, and an overall attitude of ‘we’re in this together’ and what’s ‘good for one is good for all ‘ search.

  4. Jake 2021-05-14 14:01

    Thanks, MFI, for the link to reasons why BHE wants to stick it to the freedom loving, conscientious, self-sufficient individuals who’d like to install solar for their own and society’s benefit!

    If the PUC approves their request to thwart people’s desire for freedom from high power bills it will only show how far the GOP hypocritical rot has spread in Pierre.

    Maybe BHE should “pay” their captive customers for their ‘desire’ for nicer things attained by using their electricity! Same “logical” ‘reasoning’, it appears to me.

  5. jerry 2021-05-14 14:35

    The PUC should publicly demand to know the losses Black Hills Energy took in the recent Texas ice storm. Once those looses have been made as public as the Minnesota 800 million natural gas loss. Black Hills Energy is also a player in the natural gas market, but they don’t have a lot of natural gas customers, so what are they gonna do but put the screws to anything they deem as competition and especially those that would like to go renewable. Ever wonder why they always put the kabosh on windfarms, and solar farms in western South Dakota?

    “By contrast, Black Hills Energy (BHE) as a natural gas provider was in a different situation than electricity providers. They have fewer ways to avoid inflated commodity prices.

    BHE sent a press release on Feb. 15, advising customers to cut back on use if possible. According to another press release after the storm, “We will work closely with the Colorado Public Utilities Commission to determine the best path forward to manage the long-term impact of increased pricing for our customers, which will take more time.” According to BHE, February’s storm caused the largest natural gas price increases in the last twenty years. Those price increases have not yet been reflected in their customers’ bills.”

    Don’t even think the PUC will do anything but roll over and get their fat tummies scratched.

  6. John 2021-05-14 15:00

    This anti-capitalist, anti-competitive, monopolistic proposal resides in selfishness, greed, and a broken business model that denies the future of distributed electrical production. What’s missed from the news coverage and column is the largest opponents to the BHE proposal are corporations producing or planning to produce their own power.
    BHE / BHP is afraid of future and thus does not want to adapt to it.

    Commenters here and on the news are correct – there is no compromise.

    If BHE / BHP had their way they’d charge me for the heat produced by my fireplace. This is rank greed by the executives, board, and shareholders – to preserve excess pay and dividends. The greed of BHE / BHP will kill solar energy in the “Sunshine State”.
    if the PUC gave a hoot about consumers they’d force the utilities to pro-rate credit refunds when their power is unavailable.
    If the PUC gave a hoot about consumers they’d introduce market forces in our utility market so consumers could shop for the best priced provider — instead they hold us hostage.
    If the PUC approves this nonsense, as petitioned or watered down, expect to see more interest in municipal utilities, neighborhoods and HOAs establish their own power via geothermal and / or fuel cells. BHE / BHP cannot promulgate their broken business model for ever. In light of the future BHE / BHP must adapt, migrate, or die.

  7. Arlo Blundt 2021-05-14 15:34

    Well…there’s a reason every sound retirement investment account includes public utilities stock. Owning a Utility, especially an electric utility is the closest thing to owning a printing press to manufacture money. Utilities are anything but “high risk” businesses or investments. The PUC and State Legislatures have taken the risk out of the business.They were the first “too big to fail” businesses. You can complain about their incessant price gouging or you can buy stock or mutual funds in instruments containing public utilities stock or better yet, bonds. Avoid deregulated “hybrids” like the notorious ENRON.

  8. Donald Pay 2021-05-14 16:50

    Arlo, Yeah, conservative investors will buy public utilities. They don’t buy them to make loads of money, though. It’s a safe relatively safe investment with not a huge amount of downside risk.

    I think a lot of what a utility does depends on the activism of its customers, the wisdom of its regulators and, ultimately on whether the voters know up from down. My feeling is folks in the Black Hills are in a deep 40-year sleep. I’ve had two utility companies in my time in Madison, WI. The folks here don’t put up with sh…um, anything. The utilities aren’t perfect by any means, but they have to try to satisfy customers here, as well as their investors, and that means they have to do more than burn coal. In the last 10-15 years they are on building out solar and wind and shutting down coal plants. Part of the reason is activists have kicked them pretty hard and residential and commercial customers here want to get off coal. Mostly it’s that coal has become more expensive relative to solar and wind, and it’s become a voting issue.

    Black Hills Power has a coal mining subsidiary, so they had a built in reason to stay with coal, and their coal plants did hold prices down as long as wind and solar weren’t competitive. They banked money by not regulating their toxic emissions, and buying politicians rather than pollution control equipment. On the other hand, BHP and I found common cause in opposing some independent power producers who sought to site some petroleum coke burners and force BHP to take the electricity.

    BHP isn’t all bad, but, they live in an area where wind and solar would be very easy to incorporate into their portfolio. They ought to be encouraging that development.

  9. Jake 2021-05-14 17:10

    Try to get some sort of compensation from BHEnergy for loss because of their inability to provide power as promised! During storm Atlas, those weeks without power, were told “Oh, it’s a God event, you just got to suck it up.” Had more of their customer base had solar-everyone would be better off.
    This is like a doctor charging you for taking his advice and staying healthy!!!

  10. Mark Anderson 2021-05-14 17:52

    Well Jake, my doctor told me after I told him my blood pressure went down from meditation twice daily that he used to tell people to meditate 20 years ago. I was aghast since he never told me that. I don’t know what commenting on DFP does for my blood pressure but I’ll have to check. As far as Solar goes, you’ve got to keep the pressure on for the price to go down, meditate on that.

  11. Arlo Blundt 2021-05-14 17:58

    Yes, Jake, exactly right. Take Donald Pay’s advice and bring 50 or so customers to a PUC meeting to complain. You may get some succor or you may have to do it for 5 years before they listen and nudge BHE. Ultimately we need to get activist consumers to run and win PUC seats (as I recall, there are only 3 positions).

  12. OldtimerDon 2021-05-14 19:48

    In my humble opinion BHE is a corrupt operation that should be taken to task the way they did with the mob entities at one time in the large eastern cities (RICO??). I dealt with BHE when living in Spearfish in a mobile home park. We had lived previously in a location with the same home, but REC provided the electricity at the previous location. We were shocked to find that our usage had increased to more than 2X over our previos usage. Same home-no change. Milder environment. It took 6 months of haranguing them to change the electric meter not once but twice. While checking with other mobile home owners , I discovered that I was not the only one with an issue. The difference was that I had a solid and timely basis of comparison. Then more people started complaining after learning of my situation. . After almost a year, they did change out meter and a few others (reluctantly). Usage decreased, but when we moved to Springfield, it dropped drastically again. .

  13. Yvonne 2021-05-14 22:19

    What the above all said–ditto. Monopolies is what BHE is. Remember what the government and competitors did to Ma Bell. BHE and other capitalists greed mongers are Never too big to fail. The solar industry is picking up speed in being the lead in competition against these die hard capitalist utility companies. Ma Bell put in all the lines first; and, yet could not stop the competition from helping breaking up that money train. Move over utility companies and join in to a implementing a safer and more environmental friendly grid system cause solar is moving in and taking over.

  14. R. Kolbe 2021-05-14 22:58

    So how many Federal Dollars have they accepted to under write their business?
    They owe the tax payer.
    Where do they get their power?
    When they buy power How much do they charge the producer for the USE OF THEIR LINES?
    They have right of way they paid for but they don’t pay for disrupting the air space or crossing over the public roads.
    Makes as much sense as their “logic”.

  15. jerry 2021-05-15 02:45

    Black Hill Energy raises rates. Rapid City Journal 5.15.21. Black Hills Energy made a bad bet on natural gas when the Texas Storm hit and they are lying their arse’s off about a little cold snap we had in April. The South Dakota PUC thinks we’re all to damn dumb to figure it out. Colorado’s PUC has them figured though. Colorado knows that Black Hills Energy’s price increase here for electricity, is to cover those natural gas losses that have nothing to do with South Dakota electrical users. Black Hills Energy is a mafia like organization that needs to be investigated for price gouging to keep wealthy investor’s portfolio bloated on the backs of working folk.

  16. John Dale 2021-05-18 06:01

    It’s an unconstitutional proposal and clearly anti free market.

    But are these times so urgent?

    To cut costs, could they cut the surveillance budget?

    Also, where do the panels come from?

    And, at scale, production of batteries and panels produces big Rare Earth impact to offshore Japan (rare earth strip mine of a massive deposit) and The Black Hills (and other mineral rich areas of the US interior).

    If we can be patient, maintain what we have for another 30-40 years, can we solve all Earth based production pollution problems?

    If a high value idea, how best to get this idea into the mind-share ..

    Do we not need good robot miners at the asteroid belt, who can deliver consumer ready goods from a space based supply chain? The technology is well on-the-way, and not all Space-X satellites will stay in orbit to serve the communications needs of humans?

    Observation: I see too many rushing to land-grab solar technology that could embed a more sinister control and surveillance grid. PUC is trying to mitigate the rush in the event it’s a Buffalo Jump; a big “whoa!” on the reigns.

    That silly goose Musk wants to bring Earthlings to Mars? Geese are Earthlings too. But for the most part, that solar network can and should traffic goods in the other direction. Open source devices will rain from orbit having been created with human designers from a more paradise-like Earth free of the labor and mining required for traditional manufacturing. Built-into the architecture of such a thing are redundant systems here on Earth that accommodate gaps in space based production due to unforeseen circumstances (it could take decades to replace assets in space taken-out by a large solar flare, for instance).

    Nyuk: Some Operation Paperclip Scientist is now undoubtedly trying to figure out how to run a big cable to the moon and create a bolo for self defense against Plutonian invasion; Ja voll! A proper doomsday machine!

    Regarding any alien invasion .. “Alien” must be clarified. Aliens in movies and TV shows – especially Stargate – overlord the galaxy. The only threat to their controls are drone-like creatures called The Replicators.

    When one walks into the Rapid City location of said power company, the goals of economic domination suggest a willingness to preserve cash flows at all costs. The power industry potential morphology is of a tentacled all seeing eye; an alien invasion of the home space. In the process of creating the grid, opportunities to exploit the American people was traded for an increased sense of security. Not just law the Andy Griffith wing of the law enforcement establishment can peer into homes. The result of the surveillance grid has been an explosion of systemic human on human crime devised of various timelines, targets, methods, and other exploitative systematicities.

    It’s not the generation or the delivery of the power that’s gotten so expensive, but the surveillance grid packaged with the power, in addition to the tremendous costs in opportunity in stolen intellectual property, but also the astronomical physical costs of the production of the hardware and software (think Cisco, INTEL Micro$oft, and IBM). Records documenting many of these and other costs may have vaporized in the walls of The Pentagon in September of 2001 according to now deceased Navy Intelligence Officer Bill Cooper.

    Considering the power of the Department of Energy, I find it amazing that, at the request of Kevin Lynn via a pointed and expensive television advertisement, The President saved hundreds of American jobs from being outsourced to foreigners at the Tennessee Valley Authority through executive order. The more spicy, seasoned reader understands the true breadth and impact of the move. The Energy industry as a whole, since video and audio can be converted to text and data and sent over power lines, is in a position to unconstitutionally peak inside every structure on Earth with a plugged-in electronic device.

    The Energy Department has the potential to be an all seeing super-entity with god-like powers. How can the discerning viewer not recall the compounding of these attributes in Star Trek TNG’s “Q”. The ability to coordinate appearances using cellular networks and remote sensors coupled with the ability to deploy AI to review and flag information in parallel is to modern warfare what the discovery of trajectory math was to artillery.

    The credible assurance of good faith among those in control of the power grid is arguable.

    Solar panels do not require central connection, limiting data transference, but can be embedded with small surveillance equipment, too.

    5G goes through walls, bones, skulls.

    As badly as Cisco and IBM and others want it …

    5G can remote power little chips?

    Eat your “fiber”.

    We have it all:
    2 + (2-6) = (2+2) – 6

    That is all.


  17. Dicta 2021-05-18 07:23

    Holy crap, you are nuts.

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