In what promises to be the public’s last chance to learn about the process before the opening of LADWP’s Feed-in Tariff (FiT) application period, the Los Angeles Business Council is hosting a FiT workshop on Tuesday, January 29 from 10-Noon.
The LABC has been one of the lead proponents in the fight to bring a true FiT to Los Angeles, and this workshop - co-hosted with LADWP - has something of the feel of a victory lap as well as an exercise in public education. All of which seems appropriate, under the circumstances.
We will, of course, be attending and will report back on anything new that we learn.
Here are the specifics:
LABC/LADWP FiT Workshop:
Tuesday, January 29, 10 a.m. - Noon
Century Plaza Towers
Basement Conference Rooms A & B
2029 Century Park East
Los Angeles, CA 90067
RSVP Required: Please Click Here to Visit Registration Site
We are informed that a $10 parking voucher will be provided to attendees.
LADWP has put out a press release announcing that in light of yesterday’s successful vote in the City Council, applications for the first 20 MW tranche of the LA Feed-in Tariff (FiT) program will begin being accepted on February 1, 2013. Projects funded under that first tranche will receive a Base Price for Energy (BPE) of $0.17/kWh.
Eager to avoid a stampede that day, LADWP has also announced that all applications received during the first five business days will be rank ordered according to a lottery. Applications received after February 7 will be date stamped and processed in the order received.
Smaller projects - those between 30 and 150 kW (AC) - will have 4 MW expressly set aside for them. The remaining 16 MW will be allocated toward projects from 150 kW to 3 MW (the limit of the FiT program). However, if small projects exceed the 4 MW set aside, they will be able to draw from the remaining 16 MW. If the first tranche is not fully subscribed during the six month application window, the excess capacity will expire - that is, it will not roll-over into the next tranche.
The second 20 MW tranche will follow six months later - on August 1, 2013 - at which time the BPE will be $0.16/kWh.
As the application process is complicated, potential applicants would do well to get the process begun immediately. Please give us a call to get started now.
After two hours of a sometimes feisty debate, the LA City Council today voted 12-1 to move forward with DWP’s recently approved 100 MW Feed-in Tariff (FiT) program. The need for all this drama arose with Councilmember Jan Perry who voiced concerns over the cost of the program, echoing the complaint of the Ratepayer Advocate (RPA), Dr. Pickel. The Council’s vote cleared away the last obstacle to a FiT roll-out, most likely sometime in February. As promised, we attended and spoke at the Council meeting (for all of 60 seconds); here is our report.
Although Perry is widely seen as a supporter of solar in general and the FiT in particular, rumor among City Hall insiders was that today’ motion was an attempt by Mayoral candidate Perry to inoculate herself against campaign charges that she was ignoring the concerns of the RPA, even though those concerns were based on a host of faulty assumptions. (Curiously, Perry’s other Councilmember opponent in the Mayoral contest - Eric Garcetti - was absent from today’s debate, but he did manage to vote.)
Given that motion of this type - under Section 245 in the City Charter - require a 2/3 vote of the total membership, Perry walked in the door needing at least 10 of the 13 Councilmembers who attended to vote for the motion.
Any hearing in LA City Hall comes complete with a colorful array of gadflies and this meeting was no different - the most startling being the guy wearing a cone hat, made from a very large dog head cone, that included a plastic pink flamingo entwined in the cone’s cords. (The Councilmembers, who often appear completely disinterested in much of the proceedings, acted as if his appearance were a daily occurrence, which it undoubtedly is.)
While City Hall rules allow for up to six minutes for a member of the public to speak on an issue, in general the rule is two minutes. Today - as was the case the last time I spoke to the Council - the rule was one minute. Not a lot of time to give to people who are taking hours away from running their business to speak, but so it goes.
A substantial number of groups spoke in favor of moving the FiT forward without further delay: Homeboy Industries (Thaddeus Skiles), Kyocera (which has been about the only solar manufacturer consistently showing up for FiT hearings), the Clean LA Solar Coalition, Communities for a Better Environment (my old organization, represented by Bahram Fazeli), the Sierra Club, various City residents and the LA Chamber of Commerce.
Not much by way of opposition - again the gadfly types who seem to oppose everything (and who all seemed to agree that this was a “power grab", get it?) and a guy named Jack Humphreville representing an entity called the Greater Wilshire Neighborhood Council who termed the entire FiT program a “pet project” of the DWP.
It has been often said that there are two things the weak of stomach should avoid observing - the making of sausage and legislation. Today was a painful lesson as to the latter. (Do you really need one for the former?) A number of Councilmembers demonstrated both an understanding of the issues and a powerful commitment to the benefits of rooftop solar in the LA basin, particularly Councilmembers Krekorian and Koretz. Paul Koretz sounded as if he had read our last post prior to the meeting (and maybe he had) as he quoted from President Obama’s Second Inaugural Address and noted that we are years behind in implementing solar. “LA is famous for its smog,” he said, “It is time that it became famous for its solar!”
Not to be outdone, Paul Krekorian noted that the FiT was both good energy policy and good economic policy. While small businesses in LA could not really participate in lots of other renewable energy projects - geothermal out in the desert, wind in Northern California, etc. - they can install in-Basin solar. He concluded, “Some city in America will be the solar capital of America for the next century; I believe it should be Los Angeles and the way we make it into Los Angeles is by starting now.”
The writing on the wall, Jan Perry defended her motion against charges that it was politically motivated. Nevertheless, Perry agreed to modify it to allow her 245 motion to be “Noted and Filed” meaning that she would be on record as having brought this motion, even though no actual vote on the merits would be held. The Council went along, and the vote for Perry’s 245 motion to be Noted and Filed was approved 12-1. (Two odd points based on the official vote tally - Garcetti apparently entered the chambers during the debate (I did not see him) and voted for the Note and File. The other oddity is that the official tally shows Perry voting Yes on the Note & File (i.e., against her own motion) and the only No vote was from Parks. Very odd indeed.) Thus the tempest ended, not with a bang, but a whimper.
So now the stage is set for the FiT to actually get underway! Once again it needs to be said that DWP General Manager Ron Nichols demonstrated himself to be very quick on his feet and quite possibly the smartest guy in the room. His calm but firm push back on the RPA’s nonsense - without ever expressly calling it nonsense - was very helpful today.
Of equal importance were all of the folks who took the time to send emails or make phone calls to Councilmembers. Together we helped convince the Council of the overwhelming popular support for this program - which helped to overcome the faux populism expressed by the RPA. Put most simply - we would not have carried the day without you.
Contact us today so that we can get started and make sure you can get an application on file to secure a place in the first 20 MW tranche which offers the Base Price of Energy of 17¢/kWh.
Today during his Second Inaugural Address, President Obama committed the Country to respond to the Threat of Climate Change and emphasized the need to make rapid progress on sustainable energy sources - watch:
Which makes us wonder - were you listening, members of the Los Angeles City Council?
Tomorrow you will be taking a vote on your long-time-coming Feed-in Tariff program. Will you take our President’s admonition to heart? Or will you vote for yet more delay and uncertainty in a program that has already been delayed for far too long?
The country is watching you. Please follow the President’s lead and clear the way for this program to go into effect, Now!
Would You Pay 30¢/month to bring
100 MW of Solar to LA?
Just when you thought solar was going to move forward in the City of the Angels, a snag arises in the form of a motion (sponsored by Jan Perry and seconded by both Bernard Parks and Mitchell Englander) to override the action of the LADWP Board and send the just-approved Feed-in Tariff back to committee.
Here is our Open Letter to the LA City Council explaining why we believe that the FiT program needs to go forward now, as approved by the Board.
Dear Members of the Los Angeles City Council:
As the owner of a small solar business located just up the road in Pasadena, I have followed with great interest the circuitous course that the City and its Department of Water & Power (DWP) took to arrive at a viable proposal for a Feed-in Tariff (FiT) program as required by State law. Indeed, I spoke before this Council in November 2011 urging the program’s prompt adoption. I attended numerous public workshops, providing extensive written feedback to staff and the public via my blog, and I testified before DWP’s Board of Commissioners regarding the FiT, most recently at the hearing when it was adopted on January 11, 2013.
All of us involved with this proposal - DWP staff, Commissioners, and interested members of the public - have been engaged on this issue for a very long time.
When the Board approved the program on the 11th, I wrote a series of articles about the FiT’s details and immediately saw a response from the public. In just the one week since the program was approved, I was contacted by three different potential FiT clients. In contrast, how much interest had I seen in non-residential solar in the City of Los Angeles in the six months prior? NONE.
As the Board had hoped in approving the program, the FiT has captured the attention of potential solar customers who until now have been sitting on the sidelines. We are finally poised to move forward in a dramatic way with commercial-scale solar in Los Angeles. Finally.
Yet now there is a Motion to send this program back to Committee - why? Apparently because the Ratepayer Advocate has claimed that the program is too expensive, but is that really the case? Please consider the following:
- Unlike your present rebate process for similar sized projects (i.e., between 30 kW and 3 MW), the FiT proposal requires no up-front, lump-sum payment to system owners when the project is commissioned. Rather, they only get paid for the actual energy that their systems produce and they only get paid that on a monthly basis. DWP and the City face zero risk here (unlike with your present rebate program) because if a system stops working, DWP doesn’t have to pay another dime. All of the risk is carried by the system owner who get reimbursed for the investment not right away, but slowly over the next twenty years. Properly structured that can be an attractive proposition, but it is anything but “easy money” or a “give away” of ratepayer dollars to solar system owners.
- Assuming for the sake of argument that the Ratepayer Advocate is correct in asserting that this program imposes an extra $100 million on ratepayers over the life of the program - what does that really mean? Since the program runs for 20 years, that equates to an annual cost of $5 million per year. According to the DWP website, the utility has 1.46 million electric customers which means that on an annual basis, each customer is paying just $3.42 to cover this program. Or put another way, that cost comes to just 28.5¢/month - less than the cost of the postage stamp a customer uses to mail in their payment. That doesn’t seem like such an exorbitant price to pay.
- Where does that $100 million go? It is true that the equipment that will comprise these systems is not built in Los Angeles, more’s the pity. But the workers who will assemble those systems and put them on roofs, or parking lots or fields will be from in and around LA. Same for the folks who will maintain the systems after they are installed. (If you gave preference to local companies from Southern California you could guarantee that even more of that money stayed local.) The profit from installing these systems also largely goes to business and building owners in the local area - all of which translates into more purchases of other goods and services in the local economy - and more tax revenue for the City.
- Way back at that November 2011 meeting, you approved DWP’s plan to conduct a “demonstration program” to “discover” the proper price to pay for the “true” FiT program which DWP would institute later (i.e., this one). So having paid for that demonstration, what did you “discover"? At least a couple of things, specifically:
- Adding uncertainty to a program seriously undermines participation in that program; and
- At a “discovered” price of 17.5¢/kWh - half a cent more than the present proposal - you managed to subscribe just 37% of the 10 MW target program capacity.
Now you want to subscribe twice as much, 20 MW in the first tranche, at a lower price than what you “discovered” and the complaint you have with the DWP’s proposal is that the rate is too high?
So why exactly are you ignoring the lessons that you paid to learn - and we all waited 9 months for you to discover - during the demonstration program? Apparently because a couple of anonymous sources told the Ratepayer Advocate that they could install 30 MW systems for 11¢/kWh!
There are two problems with relying on those hearsay assertions:
- First - they are hearsay and like all hearsay, provide a dubious basis for adjudicating the merits of a proposition;
- Second - the FiT simply doesn’t apply to systems larger than 3 MW and most of the systems will be significantly smaller than that. Of the three potential clients that have contacted Run on Sun about possible FiT projects, the largest was 300 kW - 100 times smaller than the 30 MW systems about which the Ratepayer Advocate spoke at the Board hearing - and the smallest was 75 kW. Projects of that size - which help grow local small businesses like mine - simply do not have the economy of scale to allow an investor to make an adequate return at a Base Price for Energy below that which is being proposed.
The LADWP’s FiT program will be the largest in the nation and cities across the country will watch to see if Los Angeles can take the lead and make this program work. Staff has worked long and hard to bring forward a viable program - with plenty of accountability back to their Board.
When this program is implemented, DWP will meet its State mandated FiT requirement while bolstering its RPS credits and reducing its dependence on polluting fossil fuels, the City will see increases in employment and tax revenues, and all of this will be accomplished for the price of a postage stamp.
Deals this good are few and far between; this one has been a long time coming. I urge you to Vote No on the Motion and let the FiT go forward as approved by DWP’s Board.
Jim Jenal, Founder & CEO, Run on Sun
The City Council will consider the Motion during their next regular Meeting (here’s the agenda) on Tuesday, January 22, starting at 10:00 a.m. The meeting will be held in the Council Chambers, Room 340 at City Hall, which is located at 200 N Spring Street in downtown LA. I will be attending and speaking (very quickly) and will report back on the meeting.
Frankly, we desperately need your support. If you believe that this program is worth the cost, then please make your voice heard. Here is the contact information for the Councilmembers who are behind this Motion (all phone #’s are area code 213):
And here is the complete contact info for every member of the LA City Council - please reach out to these folks and urge them to move the FiT program forward, now!
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