Major Solar Settlement In Arizona
Proving yet again that compromise does, in fact, work, Arizona’s largest electric utility and solar advocacy groups have reached a major settlement agreement that lays to rest several contentious issues. As with all compromises, each party didn’t get exactly what it wanted, but the future of rooftop solar in Arizona looks a bit brighter.
When utility Arizona Public Service (APS) filed a rate case with the Arizona Corporation Commission (ACC) in June 2016, solar proponents geared up for a fight. The APS proposal called for mandated demand charges for all residential ratepayers, including both solar and non-solar customers, and sought to eliminate retail net energy metering (NEM) for rooftop solar customers.
Rather than fight an ugly battle, though, the utility and solar groups have successfully negotiated a settlement agreement. The ACC is expected to vote on the compromise this summer.
Sean Gallagher, vice president of state affairs at the Solar Energy Industries Association (SEIA), says, “After weeks of discussion, we are pleased negotiations produced a settlement that all stakeholders, SEIA included, feel comfortable signing. The thorough process concluded outside of litigation, and we hope an era of collaboration will take hold in Arizona.”
“This agreement demonstrates what can be accomplished when people come together with a willingness to compromise and resolve complex policy issues,” states Don Brandt, president and CEO of APS. “The winners are Arizona electricity customers.”
If approved, the deal would scrap APS’ plan for mandated demand charges, which some solar advocates argue are confusing and hinder market growth. Rather, APS residential customers would have a variety of rate options from which to choose, including a time-of-use (TOU) rate, two optional demand rates and a pilot demand rate. Rooftop solar customers who select a TOU rate plan will also have a grid access charge.
“Arizona’s families and businesses should be able to meet their own energy needs with the state’s plentiful sunshine if they so choose,” says Briana Kobor, director of the distributed generation regulatory policy program at nonprofit Vote Solar. “We were glad to arrive at a settlement that takes some steps to preserve customer choice, keeps solar customers on the same rates as other customers, and soundly rejects the idea of penalizing all residential customers with mandatory demand charges.”
In its original filing, APS also took aim at NEM, which compensates rooftop solar customers for their excess energy and has stirred debate in Arizona for years. Specifically, the utility wanted to slash the NEM credit from about 14 cents/kWh, the retail rate, to about 3 cents/kWh, the wholesale rate.
At the time, APS’ Brandt called the proposal “pro-solar and pro-customer” and said, “We want to continue Arizona’s solar leadership the right way – with more solar, for more customers, without driving up the energy bills paid by non-solar customers.”
However, after a three-year probe into the value of solar, the ACC voted to end the state’s NEM program and replace it with a lower export credit rate in December 2016 – thus superseding APS’ NEM request in the utility’s pending rate case.
Nonetheless, solar advocates were able to reach a seemingly good compromise with APS within the confines of the ACC’s new rules.
First, the settlement includes a policy resembling grandfather clauses included in the ACC plan and the original APS request: APS rooftop solar customers who file an application before the ACC’s settlement approval would be grandfathered in under their current retail NEM rates for 20 years from their interconnection date.
Second, under the settlement, APS would compensate future rooftop solar customers with an export credit rate beginning at 12.9 cents/kWh – that’s certainly much higher than the 3 cents/kWh rate APS proposed in its original filing. Customers would lock in their rates for 10 years whenever they sign up, providing some long-term certainty, but the available rate for new solar customers would decline by up to 10% annually.
“While the solar industry didn’t get everything it had hoped for out of the settlement, Arizona’s current solar customers can rest assured they will be grandfathered into their existing rates, which was a priority for SEIA,” explains Gallagher. “Under the agreement, new solar customers will be able to sign up under initial rates that are as favorable as could be obtained under the commission’s December 2016 Value of Solar decision, which creates longer-term uncertainties for Arizona customers.”
Brandt says the deal “continues Arizona’s solar leadership with smart policies that enable the continued growth of solar and other new consumer technologies while protecting non-solar customers.”
Anne Hoskins, chief policy officer at residential solar provider Sunrun, says the settlement is “more proof that rooftop solar is inevitable” but claims the agreement “does not fully recognize the multitude of benefits that rooftop solar brings to all Arizonans.”
“While Arizona does not serve as a model to encourage innovation in distributed energy, we are pleased that, together, we have ended years of debate on the future of rooftop solar policy in Arizona,” she adds.
Under the settlement, APS would also invest between $10 million and $15 million annually in AZ Sun II, a new program for utility-owned rooftop solar on customers’ homes meant to benefit low- and moderate-income residents. – Joseph Bebon
Alberta Govt. Aims For 10,000 New Solar Rooftops
In the U.S.’ neighbor to the north, the Canadian province of Alberta is aiming to support 10,000 new rooftop solar installations by 2020 and create more local solar jobs.
To help achieve that goal and longer-term solar market growth, the Alberta government has launched the Residential and Commercial Solar Program, a five-year rebate program to subsidize the installation of solar electricity generation atop residential and commercial buildings across the province. The government has allotted an initial C$36 million for the first two years of the new program.
In a press release, the government says solar uptake has doubled in Alberta since 2015, bolstered by initiatives such as the Alberta Municipal Solar Program and the On-Farm Solar PV Program. Over the next five years, the Residential and Commercial Solar Program will build on these existing programs, as well as play a major role in reaching the near-term goal of 10,000 new installations.
“There’s a lot of buzz in Alberta around small-scale solar. This program will make solar power affordable for more Albertans, leading to new panels on 10,000 Alberta rooftops by 2020. Along the way, we will create jobs and local expertise in an emerging industry,” comments Shannon Phillips, Alberta’s minister of environment and parks and minister responsible for the climate change office.
The Alberta government says homeowners, businesses and nonprofit organizations will receive rebates for rooftop solar panels that meet the program requirements as early as this summer. In its first two years, the Residential and Commercial Solar Program is expected to support the creation of 900 jobs in Alberta’s solar sector; cut solar installation costs by up to 30% for residences and up to 25% for businesses and nonprofits; and significantly reduce greenhouse-gas emissions in the province.
To ensure Albertans receive timely access, the government is posting a request for proposals to identify a third party to deliver the new program. Details will be defined in coming months, including qualifying systems, installation and eligibility requirements.
The Canadian Solar Industries Association (CanSIA) says the country’s solar industry is primed to participate Alberta’s new program.
“Alberta, a province best known for its oil and gas industry, is also rapidly becoming western Canada’s leader in renewable energy,” says John Gorman, president and CEO of CanSIA. “The government of Alberta is positioning the province for the diversification of its energy future by exploring another one of its abundant energy sources – the sun. More Albertan households and small businesses will now be empowered to go solar, strengthening local economies and creating jobs. The government has delivered on their word, and the Canadian solar industry is ready to deliver in return.”
El Paso Electric Targets Rooftop Solar Again
Despite reaching a settlement agreement with solar stakeholders last year, Texas-based utility El Paso Electric (EPE) is revamping efforts to change the rules for rooftop solar customers and impose new charges.
The solar plans are included in EPE’s broader 2017 Texas rate case, which seeks to increase prices for ratepayers. The company, whose service territory also includes parts of New Mexico, filed its rate case with the Public Utility Commission of Texas and other relevant authorities in the Lone Star State. According to an EPE press release, the utility is requesting “an increase in non-fuel base revenues of approximately $42.5 million. Under the proposed rates, a residential customer using 635 kWh per month will see an average bill increase of $8.25 per month when new rates are implemented.” The utility says the increase is necessary in order to help pay for grid improvements and recover costs associated with a natural gas plant in Texas.
“We’ve worked hard to modernize our aging local generation fleet and promote solar and other clean energy technologies our customers want – all while providing safe, reliable and affordable service,” comments EPE CEO Mary Kipp in the release. “We spend a lot of time planning how to best meet the demands created by the continued growth of our region, and these latest investments will benefit our customers well into the future.”
Notably, EPE officially became coal-free last year and said it was increasing its focus on cleaner energy resources, including solar. However, the utility is again proposing to create a separate rate class for its rooftop solar customers. In its announcement, EPE claims the new structure would “reflect the unique service characteristics and cost of service for this group of customers” and include a new monthly demand charge “to recover the cost of grid-related services.”
In the release, Kipp comments, “It is important to establish a fair rate structure that reflects the cost to serve each customer class. As technologies evolve and our customers’ needs change, we must also evolve to provide programs and rate structures that allow us to provide safe and reliable service at a price that is fair to all our customers.”
According to an EPE fact sheet on its website, the proposed solar provisions would increase a residential solar customer’s monthly bill by $14.09, on average. The utility says it has also proposed “identical” rate structure changes for small commercial customers with rooftop solar.
EPE made similar requests targeting rooftop solar customers in its 2015 rate case, but the utility eventually dropped the controversial plans under a settlement agreement with solar industry stakeholders in 2016. The Alliance for Solar Choice (TASC), one of several advocacy groups that championed the compromise, seems none too pleased with the utility’s newest proposal.
“Demand charges found unreceptive audiences among regulators in 2016, and last year, Texas residents clearly rejected El Paso Electric’s same drastic and unprecedented rate design that punishes solar customers,” says TASC spokesperson Amy Heart. “EPE is attempting to circumvent Texas policymakers and citizen directives to support solar growth and competition by implementing confusing charges that have been rejected across 14 states and counting. It is time EPE focuses on integrating solar opportunities and customer choice, rather than force anti-consumer rate design on Texans.”
In addition to TASC, at least one Texas legislator has spoken out against the 2017 rate case. State Sen. José Rodríguez represents District 29, which includes El Paso County and some other Texas regions, and he charges the new rate case includes “anti-solar proposals” that raise “similar concerns” the senator had with EPE’s 2015 case.
“I’m disappointed that El Paso Electric insists on discouraging people from installing solar on their homes,” says Rodríguez in a press release. “The electric company once again wants to single out solar customers by increasing their rates at least two times the amount of their non-solar neighbors. Solar customers will no longer be able to save on their electric bills, which was the reason they installed solar panels in the first place.”
In its fact sheet, EPE notes the 2017 Texas rate case decision could take up to a year, and the utility says it has “met with several interested parties since the 2015 rate case, and conversations will continue throughout this rate case process.” – Joseph Bebon
NV Energy Proposes Customer ‘Subscription Solar’ Program
Although the Nevada utility has long been under fire for its questionable support for customer-owned rooftop solar, NV Energy has announced it is seeking regulatory approval for a program that would allow its customers to sign up for and purchase some utility-owned solar.
According to NV Energy, the new Subscription Solar program would give residential – and, eventually, small to midsize business customers – the option to meet up to 100% of their energy needs with renewable energy.
“NV Energy is committed to a cleaner energy future, and that includes finding ways to deliver solar and renewable energy conveniently to our customers,” says Pat Egan, senior vice president of renewable energy and smart infrastructure for NV Energy. “Our Subscription Solar program gives our customers a choice when it comes to their energy mix – providing them with a simple, flexible and affordable way to reach their sustainability goals.”
If the program is approved as filed by the Public Utilities Commission of Nevada, eligible customers will be able to subscribe monthly to 100 kWh “blocks” of solar energy. NV Energy explains customers can subscribe to a minimum of one block up to an amount of blocks not to exceed their average monthly usage.
“This program is specifically designed for customers who may not have access to a rooftop but who would like a low-cost, renewable energy option or for those whom building their own rooftop system isn’t a great option,” says Egan.
The projected cost per block is $2.00 per month, which NV Energy says would make its Subscription Solar program one of the lower-cost programs of this type in the nation. This is in addition to a customer’s normal monthly bill. For example, if a customer in an apartment using 600 kWh a month desired to be 100% “green,” he or she would subscribe to six blocks for a monthly premium of $12, plus applicable taxes and fees. The utility notes the Subscription Solar program does not require any long-term contracts or upfront investments, and there are no cancellation fees or participation period commitments.
NV Energy has designated 10 MW of solar energy from the Boulder Solar I facility to meet the initial needs of the Subscription Solar program. NV Energy, in conjunction with Apple, also designated an additional 5 MW of the Techren II facility, which is projected to be operational in 2019.