Augusta council votes to grandfather some solar customers, orders retroactive credits

The Augusta City Council on May 19 approved Ordinance 2247 to amend the city's electric rates for distributed generation (solar) customers and to apply the change retroactively for customers whose interconnection applications were dated April 2023 or earlier.

The ordinance directs utility staff to apply the amended compensation rules to a limited set of existing customers and to issue credits where calculations show those customers were disadvantaged by an earlier rate change. City staff estimated an approximate one-time refund of about $7,400 for the affected group and an ongoing revenue impact of roughly $3,400'$3,600 per year.

City staff said the change followed a rate-modeling review with KPP Energy, which led the city to separate energy purchase compensation from the delivery-related costs (poles, lines, meters). Josh Shaw, the city manager, said staff and Public Utilities Director Tim Johnson concluded the earlier compensation method had paid customers in a way that also included costs for delivery infrastructure. Shaw said staff believes a small group of customers that applied before the rate change made decisions based on the earlier compensation assumptions and that retroactive relief is appropriate.

Lonnie Pace, owner of Holiday Bowl, told the council his business invested about $60,000 in a rooftop array and that the post-rate-change compensation reduced monthly returns dramatically. "In the beginning it was good. We were seeing returns of 200, 300, $280 a month, and then the change happened, and all of a sudden we were getting $12 a month, $25 a month, sometimes minus $8 a month," Pace said. He said the city's change felt "akin to signing up for a mortgage at 4 or 5% and then the bank saying you're at 25% now." Pace said he and his installer, Matt Paschal of A and E Electric, had worked with city staff to understand meter readings and the rate change.

Council members said the ordinance preserves existing caps and program structure for future customers and applies only to a small grandfathered group. Staff told the council there were 10 total applicants before the rate change, of which eight remain in place; two of those have since removed systems or left the locations cited by staff.

The ordinance passed on a roll call vote recorded in the minutes. Council members voting "yes" included Martin, Burke, Scott, Richardson, Davis, Brown and Marv. The council also directed staff to verify the calculations with utility staff and to notify each affected customer about the credit.

The adopted ordinance amends section 15-310 of Article 3, Chapter 15 of the Augusta code regarding distributed generation interconnection and compensation. Staff said other customers who signed after the rate change were aware of the compensation terms when they enrolled and therefore are not eligible for retroactive credits under this action.

The council did not change the city's stated caps on purchased solar energy; staff said the ordinance retains the existing 4% cap on the portion the city may purchase from distributed generators.

The council's action is intended to make a narrow remedy for customers who made investments based on the old rate model while preserving the updated rate structure going forward.