Ukiah City Council reduces credits for some solar users

UKIAH, CA., 3/7/26 — The Ukiah City Council has approved new rules reducing energy credits paid to residents who use solar electricity.  

The City Council this week unanimously approved the city’s utility company to credit some solar users, who installed their systems before 2021, at the “avoided cost” rate.   

“This adjustment aligns compensation with actual cost system savings, helps prevent cost shifts to customers without solar, and supports the long-term financial stability of the city’s electric utility,” according to a staff report Wednesday.   

The Ukiah Electric Utility outlined for the City Council the difference between the “full retail” rate and the “avoided cost” rate.   

The avoided cost rate is the amount the utility pays based on what it saves by not having to produce the electricity.  

The full retail rate includes operating costs such as managing power lines, staff and infrastructure, which are still used by solar energy users even though they generate their own power.  

The City Council voted unanimously to let the utility pay surplus energy users — those who generate more energy than they use in a year — at the avoided cost rate. 

Surplus solar energy users who adopted their systems before July 2021 were being credited at the full retail rate before, Electric Utility Director Cindy Sauers said in an interview. 

It doesn’t make sense to pay customers at the full retail rate, she said. 

“That is a major subsidy on the back of non-solar customers,” Sauers said. 

The avoided cost rate at which Ukiah Electric Utility will credit customers who installed their solar before July 2021 will be at 6.75 cents per kilowatt-hour, she said. 

This new policy will be implemented July 1.    

The next City Council meeting is scheduled for March 18 at 5:15 p.m. at the Ukiah Civic Center at 300 Seminary Ave. Residents can also participate virtually via a Zoom link at the top of the agenda when it becomes available.  

Comments can be emailed to cityclerk@cityofukiah.com or phoned to (707) 463-6217. Meeting agendas can be found at cityofukiah.com/meetings.