Colorado Springs considers new net-metering options for solar customers

Colorado Springs Utilities is proposing two new net-metering options for residential and small-commercial solar customers. The changes would take effect April 1, 2027, if City Council gives final approval.

The council gave the proposal a 6-2 favorable indication at an Aug. 25 public hearing. Final consideration is scheduled for Sept. 22.

Under the proposal, new residential and small-commercial customers would choose between a standard option with time-of-use pricing and daily grid-access charges, or a demand option that bases part of the bill on the customer’s highest 15-minute net demand during on-peak hours. Both options would preserve one-to-one energy exchanges and monthly credit rollovers.

Medium- and large-commercial customers would receive demand-based net-metering service. Industrial customers on frozen net-metering rates would transition to standard rates beginning April 1, 2027, while certain industrial totalized meters would become eligible for the program. The proposal also would increase the renewable-energy system-size limit from 120% to 200% of annual customer usage, while retaining a 120% limit for customers on frozen rates.

Utilities projects that the average residential net-metering bill would rise by about $38 per month under either new option, compared with approved 2027 rates under the frozen option. That is an average projection, not a guaranteed increase for every customer. The proposed tariff materials list a 72.69-cent daily access-and-facilities charge and a $1 daily grid-access charge for the standard option. The demand option includes an 82.65-cent daily charge, a 2.94-cent-per-kilowatt-hour charge and seasonal demand charges.

Utilities says the current structure shifts more than $4.4 million in annual costs to other customers because solar customers reduce daytime energy purchases while continuing to rely on the electric system and its peak infrastructure. A Brattle Group analysis using 15-minute interval data from about 8,400 customers estimated a median cost shift of about $400 per customer annually, or $33 per month. Utilities estimates that about 11,000 customers are enrolled in net metering overall.

Most existing residential and certain commercial customers with agreements made before April 1, 2027, could remain on frozen rates until April 1, 2032, although they could switch earlier. The proposal would end new elections for indefinite carry-forward of excess energy after the effective date while preserving earlier elections under specified conditions.

Councilmember Nancy Henjum proposed delaying the changes until Utilities established a City Council-approved distributed-energy program. The proposal failed 3-5 at the Aug. 25 hearing. Utilities has discussed virtual power plants, demand incentives and possible rebates for customer-owned batteries, but the net-metering proposal does not create a funded battery program or rebate commitment.