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Xcel Energy

Protecting Solar Rights in Colorado

Protecting Solar Rights in Colorado

written by The Vote Solar Initiative

Last fall we decided to intervene in a PURPA avoided cost docket in Colorado, opened by Xcel Energy, because we wanted to encourage the utility to improve the rates paid to solar generators. Instead we found ourselves in a battle over a fundamental protection that PURPA offers – the right to use the electricity that your solar energy system generates to power your property.

What’s a PURPA you ask? No, it’s not the larvae of a large insect. It’s the Public Utility Regulatory Policy Act, a Federal law that has been on the books since 1978.  The law requires electric utilities to purchase power from renewable generators, known as qualifying facilities or “QFs,” at a price equivalent to the cost the utility avoids by making an alternative purchase. This rate is known as an ‘avoided cost rate.’

The purpose of PURPA was to encourage the development of small, distributed clean generators across the U.S. However, in practice, avoided cost rates for QF facilities haven’t resulted in a lot of solar development outside of a few states. And that’s because each State in the U.S. is given the jurisdiction to set their own avoided cost rates under PURPA, and they’ve tended to set those rates below retail. Most ‘solar generators’ (i.e. rooftop solar customers) don’t even consider registering as a QF facilities, and instead use net metering – with its fair and simple retail credit  – as their compensation arrangement of choice.

Take a look at Colorado: after more than 30 years of having standard avoided cost rates in place for small QFs, the rate has encouraged the construction of a grand total of, wait for it, zero facilities.  So last fall, when Public Service Company of Colorado (PSCo), the Colorado operating subsidiary of giant utility Xcel Energy, filed to take a fresh look and potentially change the calculation method for the QF rate for small-scale solar generators (100 kilowatt and smaller systems), we saw the potential opportunity for making this mechanism useful for actually deploying valuable solar.  A PURPA-based avoided cost rate that properly quantifies DG benefits could better serve to promote local solar growth.

Our optimism was short lived however as we were able to dig into the details of Xcel’s proposal (only after the judge denied the utility attempt to prevent us from having full access to that information, but that’s another story). Not only is Xcel continuing to undervalue QF generation, the utility is also taking aim at its customers fundamental solar rights.

Under a PURPA QF arrangement – as with net metering – the host customer should first and foremost be empowered to use their generation on-site and then sell any excess energy to the utility.  Yet in this new proposal, Xcel insists that the generator must sell 100% of its output to the utility, not allowing the owner to use his or her own power.  We fundamentally disagree with this interpretation of PURPA and are pushing back hard against this position at the Commission. Vote Solar firmly adheres to the principle that customers have the right to manage their energy consumption and produce their own power. Whatever happens on the customer side of the meter is the customer’s prerogative, not the business of any utility.  Xcel’s stance in this docket would give the utility too much power over a customer’s energy decisions, and take away a customer’s right to use their power onsite.

In addition to undermining customer solar rights, Xcel’s proposal also uses some questionable modeling techniques to undervalue rooftop solar in the resulting QF rate.  I’m going to get a little into the weeds here, bear with me.

On an annual basis, the marginal costs it models and wants the Commission to adopt as avoided are less than average costs 5 out of every 6 hours.  We take issue with the utility’s methodology.  Given that utility systems are run by operating the cheapest unit first, the next cheapest second, and so on (known as economic dispatch), the marginal cost – the cost of generating the next kWh – should be higher than the average of all the cheaper plants already running. When we dove a little deeper, it turned out that the Company‘s modeling finds coal generation on the margin more than half the time.  In the utility world, coal is known as a baseload resource meaning that it typically runs almost flat out nearly all the time.  Why?  Because it is expensive to start but cheap to run (at least if you don’t consider environmental impacts.) Call me crazy, but I am arguing that Xcel should use marginal costs that actually represent the costs that will be avoided when the QF is operating. 

So what’s next for the QF docket in Colorado?  We have just concluded the formal hearing on the small QF rates and have a couple more steps before we get a decision from the Commission in August or September.  We will also concurrently be examining the avoided costs, or to put it another way, the  ‘benefits’ of rooftop solar in another process at the Commission.

Our goals in these dockets are to protect the rights of customers to produce their own solar energy for on-site consumption – and to make sure that rooftop solar is properly and consistently valued in the various rate-related proceedings open before the Colorado Commission.  Stay tuned.



May 12, 2014 0 comment
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Community Solar Gardens Sprouting in Minnesota

Community Solar Gardens Sprouting in Minnesota

written by John Farrell

On April 7, the Minnesota Public Utilities Commission resoundingly rejected (click the link for an annotated ruling) a severely lacking community solar gardens proposal from Xcel Energy and required substantial improvements for the utility’s revised filing.

The regulatory smack-down means a promising community solar market for Minnesota (scroll down for the infographic version).

The Basics
Advocates worked hard to make it easy to establish community solar projects, and the following basic rules apply:

  • Minimum of 5 subscribers (who cannot own more than 40% of output, each)
  • Minimum 200 Watt subscription (typically one physical panel)
  • 25-year standard contract
  • Total project size can be up to 1 megawatt (AC)

Compensation

  • The utility (Xcel Energy) must purchase all energy from the community solar project, whether or not it is fully subscribed
  • For subscribers – utility must pay them the full applicable retail energy rate (like individual net metering), including for net excess generation (energy in excess of their own on-site use)
  • For unsubscribed energy – utility must buy power from panels that are not owned by subscribers at the applicable retail rate for projects smaller than 40 kilowatts (kW), but only at the avoided cost rate for projects larger than 40 kW
  • REC – $0.03 per kWh for < 250 kW, $0.02 per kWh for > 250 kW. Not eligible if project also gets Made in Minnesota or Solar Rewards
  • Applicable retail rate reviewed and adjusted annually.
  • Bill credits, month-to-month carryover, purchase at end of year (at applicable retail rate)
  • If and when Xcel Energy files to offer a value of solar price, it will supersede the above rates and REC prices (at time of publication, Xcel has asked the PUC to reconsider the value of solar)

Fees
1-time fees:

  • A $1200 application fee, refundable if the project is withdrawn
  • A $100/kW deposit, refundable upon project completion or withdrawal (with interest)

Ongoing:

  • Administrative (called “participation”) – $300 per year
  • Metering fee – $66 per year, three phase: $96 per year

Process
Applications are not processed in order of application, but are prioritized as “first ready, first served” to help level the playing field between large and small developers (the latter taking more time to apply, perhaps):

  • The project meets the definition of completeness in Xcel’s solar-garden tariff;
  • The project has obtained or arranged appropriate insurance or has entered into an insurance-broker agreement;
  • There is evidence of site control and a point of interconnection;
  • There is evidence of projected subscription at the time of construction; and
  • The project proposal complies with all applicable material terms of the tariff and standard contract and with any additional considerations that Xcel, solar-garden developers, the Department, the OAG, and interested parties participating in the solar-garden working group have agreed to include in the plan.

Despite utility efforts to curtail solar gardens, the PUC emphatically said that there can be no limit on the total installed capacity of solar gardens.

Killed
The following items were thankfully removed from Xcel’s original proposal:

  • A second deposit
  • A 2.5 megawatt quarterly limit on solar garden installations
  • Lower compensation, based on “average retail energy rates”
  • Capacity limits in DC instead of AC (about 25% smaller)

Will They Grow?
The Public Utilities Commission was very deliberate in identifying rules that facilitate a fair balance between ease of establishing solar gardens and protections for solar gardens subscribers.  The PUC also endeavored to provide adequate compensation for solar gardens, setting solar REC prices based on the projected cost of establishing solar gardens.  Finally, the Commission removed capacity limits and lower proposed compensation that would have severely hindered development.

In other words, it’s a promising year for community solar in Minnesota, and combined with the victory of solar over natural gas and the solar energy standard, Minnesota’s solar market is heating up.

minnesota-community-solar-infographic

Article by John Farrell, appearing courtesy Institute for Local Self-Reliance.



April 22, 2014 1 comment
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Colorado Solar Supporters Flood the PUC

written by The Vote Solar Initiative

Earlier this week, the Colorado Public Utilities Commission (PUC) invited the public to comment on Xcel’s proposal to rollback net metering. And boy did the public respond! Almost 100 solar supporters showed up, filling both PUC hearing rooms and over-flowing into the halls. The crowd was a diverse mix – ranchers, teachers, moms – but the

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February 5, 2014 0 comment
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The Citizens of Boulder Want Renewable Energy Now

written by Walter Wang

For those of you who may not be aware of it, the city of Boulder, CO is going through a process of attempting to “municipalize” its electrical power, i.e., to arrange for the city to purchase the assets necessary to deliver power to its own citizens. This is a process that seems bound to play itself out in hundreds of other communities over the coming years.

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August 22, 2013 1 comment
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Xcel Energy Puts Rooftop Solar in Jeopardy in Colorado

written by The Vote Solar Initiative

Rooftop solar is helping Colorado families, schools and businesses take charge of their power supply and their electricity bills like never before. This private investment in rooftop solar is helping build a cleaner, safer and more resilient energy supply for all Coloradoans. And the state’s largest power provider, Xcel Energy, is apparently not too happy about it.

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July 30, 2013 1 comment
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Putting the Price of Power in Context

written by Walter Wang

A 12 oz. bag of Salsa Verde flavored Doritos®, a gallon of 2% milk, a Starbucks® grande caffè mocha, an issue of ESPN The Magazine, an ice cold bottle of Coors® original… If this were the ramblings of a contestant on The $20,000 Pyramid, the category would be, “Things That Cost More Than What I Pay Per Day For Power.”

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August 1, 2012 0 comment
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Going Green by Partnering with Purple Pros

written by Walter Wang

We can’t do it alone. And we don’t really want to.

We partner with the pros all of the time. We ask energy experts to help us with our energy assessments. We ask heating and cooling experts to help us with our Home Energy Audits. And this week, we’re partnering with a pro football team to get the word out about

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October 10, 2011 0 comment
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Putting Sunshine in a Battery

written by Walter Wang

I am not going to lie — when I first heard about solar battery storage, I was not overly excited. Because I usually work with our efficiency programs – and communicating how our customers can conserve energy and save money – I was way out of my comfort zone. And I’d missed lunch, so I was cranky.

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August 8, 2011 0 comment
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Energy Conservation Through Peer Pressure

written by Walter Wang

If you had proof that you use more energy than 78% of your neighbors, would you take steps to cut back?

Turns out that most of us would.

Through a pilot with OPower, Xcel Energy has been sending customized home energy reports to 50,000 customers in Minnesota.

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April 11, 2011 2 comments
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Wind Energy Creating New Jobs

written by CleanTechies.com Contributor

How great is it when one good thing creates a bunch of other good things? According to national averages provided by the American Wind Energy Association, the 201-megawatt Nobles Wind Farm in southeastern Minnesota created approximately:

• 200 construction jobs

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February 14, 2011 1 comment
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Seeing (Nothing) is Believing

written by CleanTechies.com Contributor

A recent article in the Minneapolis Star Tribune featured a Montevideo, Minn., business owner who upgraded his energy equipment with the help of his local utility. On the surface, it may not seem newsworthy – thousands of businesses in Minnesota and across the country partner with their local utility to take advantage of energy efficiency rebate programs.

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February 11, 2011 0 comment
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Sun to Battery: Real-Life Testing of Solar Storage

written by CleanTechies.com Contributor

I think it would be a system operator’s nightmare. You’re responsible for keeping everyone’s lights on, but a passing set of clouds cuts the output from several solar arrays from 100% to 20% — and then raises it back up to 100% in less than a minute.

Fluctuations like that would put me in the

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January 28, 2011 1 comment
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EV Batteries vs. a Minnesota Winter: Which will Prevail?

written by CleanTechies.com Contributor

We know Minnesotans are hardy stock, but will their electric vehicles match their owners’ mettle? That’s one of the things being tested by the City of St. Paul and Drive Electric Minnesota, a collaboration of businesses, nonprofits and government agencies in the Twin Cities. They’ve teamed up to build an EV infrastructure

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January 26, 2011 1 comment
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Colorado Billionaire Battles Utilities Over Power Line On His Ranch

written by Solar Calfinder

In Colorado, hedge fund billionaire Louis Moore Bacon is fighting a new transmission line proposed by two utilities: shareholder-owned Xcel Energy, and Tri-State Generation and Transmission Association, a wholesale electricity supplier.

Bacon, the founder of Moore Capital Management LLC and owner of the

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November 30, 2010 3 comments
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