Solar Citizen: Net-Metering Update

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Solar Citizen Newsletter, Feb. 27, 2014

Colorado: PUC Separates Net-Metering Rates from Xcel Plan

At the end of January, the Colorado Public Utilities Commission accepted a proposal from solar supporters to “sever” the question of net metering from Xcel Energy’s current compliance plan.

Xcel, the state’s largest electricity company, is currently paying 10.5 cents per kilowatt-hour (kWh) for net-metered customer-supplied power, but wants to cut that rate back to 4.6 cents. The PUC severance decision puts net-metering charges into a separate docket, to be argued later. That move, welcomed by the Colorado Solar Energy Industries Association, gives both sides more time to marshall their arguments, and economic calculations.

CoSEIA Debate:  Don’t Hide the Accounting

By LILI FRANCKLYN

Discussions over net metering took center stage at the annual conference of the Colorado Solar Energy Industries Association this week and are likely to dominate 2014 energy policy discussions in Colorado. Attendees packed a room to hear the battle lines be drawn by Frank Prager, VP Policy & Strategy at Xcel Energy, Colorado’s largest investor-owned utility, Chris Neil, a rate and financial analyst from the state Public Utility Commission’s Office of Consumer Counsel (which theoretically represents consumers in PUC proceedings) and John Stanton, VP of Policy & Electricity Markets for SolarCity. Rick Gilliam, who manages technical and policy research for the advocacy organization Vote Solar moderated the discussion, and KK Duvivier, Professor from the University of Denver Sturm College of Law provided background on the history and original intent of net metering laws passed by the US Congress.

Battles over net metering are heating up in at least 15 states as utilities struggle with inevitable pressure to adapt their business models to the reduction of demand and the loss of profits caused by the growing popularity of distributed energy – specifically rooftop solar. Colorado is at the front line of these struggles as Xcel Energy, the state’s largest utility, has proposed in recent PUC filings to change net metering laws to reduce payments to solar owners. Xcel claims that solar is a “cost” to the utility. Currently, Xcel’s net metered customers  are credited at the full retail rate. Xcel’s Frank Prager argued that while net metering supported a “nascent industry” after the passage of Amendment 37 in 2004, those laws no longer “make sense” and that solar owners should now pay for the privilege of using the electric grid.

“Why are we hiding from the accounting?” asked John Stanton of SolarCity, who called for a full cost-accounting of the value of solar. Stanton said the solar community is frustrated by the reluctance of the utility industry to conduct open and transparent assessments of the benefits of solar to utilities and society as a whole. Solar shaves peak demand, helping utilities avoid investments in new infrastructure, eliminates fuel costs, and provides “free electrons” to the grid.

Economist Chris Neil of the PUC Office of Consumer Counsel surprised many attendees by suggesting that the “true costs of solar” not be “hidden from the consumer.” From Neils’ perspective, the environmental costs of coal and natural gas would not be part of any calculations that determine the value of solar.

Arizona Considers Property Tax on Leased Solar Arrays

After failing to convince the Arizona Corporation Commission (the state’s PUC) to impose a $50 a month surcharge on rooftop solar customers, anti-solar lobbyists now propose to codify a new property tax on solar customers who lease their systems. About 80% of solar homeowners in Arizona lease their systems. If HB2695 passes the state legislature, the tax would make it more difficult for home and business owners to save money by installing solar.

Anti-solar efforts have already had a negative impact on the Arizona economy. The number of people employed in the solar energy industry in Arizona fell by more than 1,200 in 2013, according to a report issued by the Solar Foundation. The Foundation says anti-solar efforts backed by the utility company Arizona Public Service probably played a role in that job loss.

The bipartisan group TUSK. (Tell Utilities Solar won’t be Killed) was formed to stand up for energy choice and solar savings. TUSK Co-Chairman Barry Goldwater Jr. stated, “What part of ‘Don’t tax the sun’ does APS not understand? It’s obvious our work as far from over as this utility monopoly looks for new ways tax a competitor out of the market.”

Kansas House Committee Moves to Weaken Net Metering

The Kansas House Energy Committee passed an amended HB2458 aimed at reducing the value of net metering to customers.  The bill, backed by Westar Energy and Kansas City Power & Light, originally would have ended net metering entirely. The amended bill would allow utilities to pay net-metered solar customers less than the retail rate of electricity, while reselling that power to neighbors at the full rate.

What Happened to Clean Currents?

Clean Currents was a nice little company that sold wind power to customers in the District of Columbia, Maryland and Pennsylvania. As the weather turned bitterly cold at the end of January, the company abruptly closed, sending its customers back to the big electric utilities for their power.

What happened? The crash was the result of a change in the company’s business model. After Solar City bought their solar installer business three years ago, Clean Currents soldiered on selling wind power. When natural gas prices plummeted to $2.50 per mmBtu a couple of years ago, they asked the D.C. PUC for permission to sell natural gas to retail customers. It wasn’t as clean as wind, but it was better than coal, and they signed up some customers, at the recently current price of about $5 per mmBtu.

Clean Currents got the approval they needed on January 23. That week  the polar vortex weather sent natural gas spot prices soaring to $80. The price settled down at $50 the following week.  Clean Currents didn’t have long-term contracts in place. They couldn’t come close to paying the higher price — and folded.

Bad timing?