Solar Citizen: Net-Metering Update


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


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?


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2 Responses to Solar Citizen: Net-Metering Update

  1. Richard Mignogna Reply

    February 28, 2014 at 9:36 am

    With respect to Colorado, as usual, what is in the public interest will ultimately turn out to be somewhere in the middle of the two sides. Solar customers do need to pay a reasonable grid fee. But, Xcel’s assertion that net metering represents a subsidy that should further exacerbate the existing deficit in its Renewable Energy Standard Adjustment account is ridiculous. BTW, the Office of Consumer Council is not part of the PUC. They are separate agencies within the Department of Regulatory Agencies.

  2. Daniel Ferra Reply

    February 28, 2014 at 12:15 pm

    We need a National Feed in Tariff, this petition starts in California.

    Globally we are emitting 32-50 Billion tons of Green House Gases annually, here in California we emit 446 million tons of Carbon Dioxide a year, 1,222,000 Toxic Tons a Day, The California Public Utility Commission is thinking of replacing some of San Onofres and Hydro losses to generating with Natural Gas Power Plants condemning our kids and our planet to Heating UP and Burning UP, unless We start Changing and Fighting for real Sustainable Energy Policies.

    The state currently produces about 71% of the electricity it consumes, while it imports 8% from the Pacific Northwest and 21% from the Southwest.

    This is how we generate our electricity in 2011, natural gas was burned to make 45.3% of electrical power generated in-state. Nuclear power from Diablo Canyon in San Luis Obispo County accounted for 9.15%, large hydropower 18.3%, Renewable 16.6% and coal 1.6%.

    There is 9% missing from San Onofre and with the current South Western drought, how long before the 18.3% hydro will be effected?
    We have to change how we generate our electricity, with are current drought conditions and using our clean water for Fracking, there has to be a better way to generate electricity, and there is, a proven stimulating policy.

    The Feed in Tariff is a policy mechanism designed to accelerate investment in Renewable Energy, the California FiT allows eligible customers generators to enter into 10- 15- 20- year contracts with their utility company to sell the electricity produced by renewable energy, and guarantees that anyone who generates electricity from R E source, whether Homeowner, small business, or large utility, is able to sell that electricity. It is mandated by the State to produce 33% R E by 2020.

    FIT policies can be implemented to support all renewable technologies including:
    Photovoltaics (PV)
    Solar thermal
    Fuel cells
    Tidal and wave power.

    There is currently 3 utilities using a Commercial Feed in Tariff in California Counties, Los Angeles, Palo Alto, and Sacramento, are paying their businesses 17 cents per kilowatt hour for the Renewable Energy they generate. We can get our Law makers and Regulators to implement a Residential Feed in Tariff, to help us weather Global Warming, insulate our communities from grid failures, generate a fair revenue stream for the Homeowners and protect our Water.

    The 17 cents per kilowatt hour allows the Commercial Business owner and the Utility to make a profit.

    Commercial Ca. rates are 17 – 24 cents per kilowatt hour.

    Implementing a Residential Feed in Tariff at 13 cents per kilowatt hour for the first 2,300 MW, and then allow no more than 3-5 cents reduction in kilowatt per hour, for the first tier Residential rate in you area and for the remaining capacity of Residential Solar, there is a built in Fee for the Utility for using the Grid. A game changer for the Hard Working, Voting, Tax Paying, Home Owner and a Fair Profit for The Utility, a win for our Children, Utilities, and Our Planet.

    We also need to change a current law, California law does not allow Homeowners to oversize their Renewable Energy systems.

    Campaign to allow Californian residents to sell electricity obtained by renewable energy for a fair pro-business market price. Will you read, sign, and share this petition?

    Roof top Solar is the new mantra for Solar Leasing Companies with Net-Metering which allows them to replace One Utility with Another, we need to change this policy with a Residential Feed in Tariff that will level the playing field and allow all of us to participate in the State mandated 33% Renewable Energy by 2020.

    This petition will ask the California Regulators and Law makers to allocate Renewable Portfolio Standards to Ca. Home Owners for a Residential Feed in Tariff, the RPS is the allocation method that is used to set aside a certain percentage of electrical generation for Renewable Energy in the the State.

    Do not exchange One Utility for Another (Solar Leasing Companies) “Solar is absolutely great as long as you stay away from leases and PPAs. Prices for solar have dropped so dramatically in the past year, that leasing a solar system makes absolutely no sense in today’s market.

    The typical household system is rated at about 4.75 kW. After subtracting the 30% federal tax credit, the cost would be $9,642 to own this system. The typical cost to lease that same 4.75 kW system would be $35,205 once you totaled up the 20 years worth of lease payments and the 30% federal tax credit that you’ll have to forfeit when you lease a system. $9,642 to own or $35,205 to lease. Which would you rather choose?

    If you need $0 down financing then there are much better options than a lease or PPA. FHA is offering through participating lenders, a $0 down solar loan with tax deductible interest and only a 650 credit score to qualify. Property Assessed Clean Energy loans are available throughout the state that require no FICO score checks, with tax deductible interest that allow you to make your payments through your property tax bill with no payment due until November 2014. Both of these programs allow you to keep the 30% federal tax credit as well as any applicable cash rebate. With a lease or PPA you’ll have to forfeit the 30% tax credit and any cash rebate, and lease or PPA payments are not tax deductible.

    Solar leases and PPA served their purpose two years ago when no other viable form of financing was available, but today solar leases and PPAs are two of the most expensive ways to keep a solar system on your roof.” Ray Boggs.

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