Back in February we wrote about the new Net Metering 2.0 rules that the California Public Utilities Commission (CPUC) approved over the objections of the Investor-Owned Utilities (IOUs), SCE, PG&E, and SDG&E.
We noted at the time that the CPUC rulemaking did not directly affect the Municipal Utilities (munis, like Pasadena Water and Power). Boy was that right as muni after muni is looking to shut down Net Metering altogether! Here’s our take, and more importantly, an action item that you can take to preserve Net Metering with the munis.
The munis are generally free, within the limits of state law, to set their own policies as confirmed by the local city council. So here in Pasadena, PWP sets its policy but has to have that policy ratified by the city council’s vote. When it comes to Net Metering, state law requires that the munis, like the IOUs, offer Net Metering agreements until the amount of solar deployed exceeds “5% of the electric utility’s aggregate customer peak demand.” (CA Public Utilities Code § 2827) Now if that quote seems like less than a model of clarity, you are quite right. Before the CPUC, the IOUs argued that it meant that you look at a utility’s highest peak demand as of a certain point in time, and that would be the cap. Such an interpretation, however, reads the words “aggregate customer” out of the statute. The CPUC agreed, and the proper interpretation requires the utility to sum the aggregate demand from each customer and that becomes the cap.
The results are dramatic - the proper interpretation effectively doubles the total amount of solar allowed under the cap. That decision by the CPUC back in 2012 redefined Net Metering, but only for the IOUs. At the time there was little concern regarding the munis since none was close to reaching their cap.
Fast forward to today and five munis have already reached their caps, as calculated under the old, pre-CPUC ruling, methodology. That leaves them free to replace Net Metering with whatever they choose, and at least one, Turlock, has adopted new rules that have resulted in an 85% decline in the solar market there! (In contrast, LADWP has already agreed to the new methodology thanks to leadership from Mayor Garcetti.)
Fortunately there is a fix in the works. AB 2339 (Irwin - D-44) will require that the munis calculate their caps in effectively the same way as the IOUs. The bill is presently in the Assembly Committee on Utilities and Commerce, chaired by Mike Gatto (D-43) - a former student and colleague of mine, and a champion of clean energy.
We need the strongest bill possible coming out of the committee, and you can help make that happen. How? Our friends at CALSEIA have compiled a target list of key assembly members who need to here from their constituents on this bill. From the CALSEIA newsflash:
- Jim Patterson (R-Fresno/Clovis) 916-319-2023
- Susan Eggman (D-Stockton/Mountain House/Thornton/Tracy) 916-319-2013
- Mike Gatto (D-Burbank/Glendale/La Canada/La Crescenta) 916-319-2043
- Bill Quirk (D-Hayward/Ashland/Castro Valley/Cherryland/Fairview/ Fremont/ Pleasanton/San Lorenzo/Sunol/Union City) 916- 319-2020
- Miguel Santiago (D-Huntington Park/Vernon) 916- 319-2053
- Eduardo Garcia (D-Imperial/Blythe/Brawley/Calexico/Cathedral City/Coachella/Desert H.Springs/El Centro/Indio) 916- 319-2056
- Christina Garcia (D-LA/Bell Gardens/Bellflower/Cerritos/Commerce/ Downey/Montebello/Pico Rivera) 916- 319-2058
- David Hadley (R-Torrance/Gardena/Lomita/Manhattan Beach/Palos Verdes Estates/Redondo Beach/West Carson) 916- 319-2066
- Phil Ting (D-San Francisco) (916) 319-2019
- Rocky Chavez (R-Oceanside/Calsbad/Encinitas/Vista) (916) 319-2076
If you live in one of those districts, or if you run a business in one, or have customers there, please contact that member.
More generally, there is a website where anyone can go to express their support for expanding the benefits of Net Metering to muni customers throughout the State. Just click on the button to make this happen:
Sadly, the list of entities opposing this bill includes Pasadena Water and Power - looks like we need some political leadership here in our own backyard to get PWP on board.
We will update this post as the bill progresses through the legislature - watch this space!
The new year is well underway (Happy New Year!), and so it is timely to revisit the question of financial incentives to Go Solar in the Run on Sun service area. (You can read more detail about all of these incentives on our Solar Financing page.)
Beyond a doubt, the most significant incentive for going solar is the 30% federal tax credit. Previously set to expire at the end of this year, the federal solar tax credit was extended late last year, continuing at the present 30% through 2019.
The credit applies to solar installations in every utility’s territory, so no matter where you live in the U.S., this credit applies to you. (NB: this is a tax credit, not an income deduction, so you need the tax “appetite” to take full advantage of this incentive - check with your tax advisor.) For residential clients, the basis for the credit is the full cost of your solar project, less any rebate that you might receive from the utility. Commercial clients, who must declare any rebate as income, do not need to deduct their rebate from the system cost when calculating the basis.
Once common everywhere, utility rebates are going the way of the dodo—with one or two notable exceptions. We have rank ordered the local utilities below, based on the reliability of their rebate program.
The big winner, again and by far, is the solar rebate program operated by our own Pasadena Water and Power. Year in and year out, PWP offers rebates to its customers in a transparent and consistent manner - something that cannot be said of any of its neighboring utilities.
As of this writing, PWP is offering a rebate of $0.45/Watt for both residential and commercial customers, and a rebate of $0.90/Watt to non-profit customers (who cannot take advantage of the federal tax credit). Alternatively, PWP also offers a performance-based incentive that is paid out over two years based on the actual production of the system. Residential and commercial customers are paid 14.4¢/kWh, whereas non-profit customers are paid 28.8¢/kWh.
LADWP offers a rebate, if you have the stamina to receive it. Vexed with the most bureaucratic process to be found this side of Orwell’s 1984 dystopia, applying for and receiving a rebate from DWP often feels like a reward for a life well spent.
That said, LADWP is currently offering rebates of $0.30/Watt to residential customers, $0.40/Watt to commercial, and $1.15/Watt to non-profits. Just don’t hold your breath.
These two municipal utilities often feel like one and the same given their similar approach to rebates - which is to say, now you see ‘em, no you don’t.
Unlike their neighbor to the east, neither BWP nor GWP is able to maintain a rebate program throughout the year. Instead, both open their rebate windows on or about July 1st (i.e., the start of their fiscal year) and then hand out money until it is gone, at which time the window slams shut until the following July 1.
Burbank’s program operates under a lottery, which last year opened on July 1 and was exhausted by August 15. In addition, BWP imposes restrictions on the azimuth and pitch of rebated systems, despite their being no technical justification for doing so.
Glendale’s program is even less transparent, and the installation/rebate process is outlined in a 23-step ode to inefficiency.
We will revisit both of these program in mid-June to provide what guidance we can to the residents of these two cities.
The “Solar Partnership Program” in Azusa is fully subscribed. There is a wait list that solar-hopeful customers can get on in the hope that at some point there will be rebate funds available - with no guarantees that there ever will be.
The Anaheim Solar Incentive Program was fully subscribed as of October 1, 2015 and is now closed, with no published plans to revise the program in the future.
SCE’s rebates, which were part of the larger, California Solar Initiative, have expired and no new funds are anticipated. Of course, SCE customers still have the highest electricity rates around, which provides its own—albeit perverse—incentive to Go Solar!
In our first two posts this week recapping the state of solar feed-in tariffs in the Run on Sun service area, we focused on what is happening with the biggest FiT around, that run by LADWP. But that isn’t, nominally at least, the only game in town so this post will summarize the progress, or lack of same, at the other FiT programs around: Glendale, Anaheim and Riverside.
We have written at great length about the problems with the FiT program that Glendale Water & Power designed to meet their state mandate. We noted that the prices being offerred—which were actually even 10% lower than what was presented to the Glendale City Council when they approved the program—were way too low to pencil out for a project, and that other uncertainties made it highly unlikely that anyone would participate. In other words, as we told the Glendale City Council, they were approving a program that was designed to fail.
Nine months into the experiment, where do things stand today? Let’s take a quick look at the FiT queue as of today:
All that empty space is just hard on the eyes.
In nine months, GWP has not received a single application for their FiT program—and contrary to how GWP officials refer to their defunct commercial solar incentive program as a “victim of its own success,” this program is a victim of GWP’s design.
Given the failure to attract a single project application, you might think that GWP would take steps to address their failure by increasing the offer price for energy, but you would be wrong. This table summarizes the progression on GWP’s FiT offer price for energy:
The “City Council” price is what GWP suggested to the City Council the offer price might be when the program went live and that is the price the Council had before it when they approved the program. The “Program Start” price is what was actually offered to potential project developers when the program went live last July.
The “Q214″ price is what is being offered today—a reduction of 5.5% for Peak and 4.8% for Off-Peak deliveries. That’s right, in response to offering a price that was already so low that no one was willing to put forward an application, GWP has responded by cutting its offer price by 5%. Genius.
GWP will no doubt say that they have no choice, that the formula approved by the City Council for setting the offer price mandates this result, but that’s merely self-referential nonsense. GWP designed the formula and the City Council confessed that they had no way to assess the technical merit of what was before them. The formula is supposed to be based, in part, on avoided costs—but guess what? So is the offer price for the LADWP FiT and yet it is twice what GWP is offering. Are we to believe, therefore, that GWP’s costs are half of those incurred by LADWP? If so, we suspect the customers of GWP would be surprised then that there rates are as high as they are.
It is high time that the Glendale City Council call GWP to task and insist that they re-create this FiT program so as to achieve what the state law intended—the actual installation of solar power in the City of Glendale.
The representative from Anaheim Water & Power had told us last year that their program to date, despite being started in 2010, had yet to attract a single application. Checking in on Anaheim’s FiT website confirms that unbroken string of failure continues to this day with no projects in the queue.
Anaheim’s offer price tells us why: it ranges from 3.883¢/kWh for Off-Peak to 6.472¢/kWh for Mid-Peak to a summer On-Peak price of 9.708¢/kWh.
Last year Riverside’s representative told us that they knew that their price was so low no one would bite and that was fine because they didn’t want solar installed in Riverside anyway. Today, Riverside’s “we don’t want anybody to participate” price for energy is 6.2¢/kWh—exactly the same as GWP’s off-peak price. Looks like GWP is playing follow the (non)leader.
Which brings us to our friends at Pasadena Water & Power. At a meeting yesterday we learned that PWP is considering a Feed-in Tariff program of its own. Now we are fans of PWP, indeed, we think they are the easiest and best utility around to work with (and for, for that matter). So that begs the question: What sort of FiT will PWP create? They could base their program on what has been done at LADWP (with necessary tweaks to make small projects viable) and thereby insure a successful program that reduces pollution, creates local jobs and helps to green PWP’s energy mix. Or they could follow the misguided path of GWP and its ilk, creating a program in name only, that guarantees that not a single kWh of clean energy will ever be generated.
Needless to say, we will follow FiT development at PWP closely. Watch this space.
There are multiple Feed-in Tariff (FiT) programs in the Run on Sun service area, although only one is actually doing anything. We decided it was time to check back in on these programs and to see if any of them are living up to their mandate to actually get solar installed in the L.A. Basin.
As of this writing, there are FiT programs hosted by four cities: Anaheim, Glendale, Los Angeles and Riverside. In this post we will check-in with Los Angeles and revisit the status of the other three later in the week.
Los Angeles brags that it has the largest FiT program in the country and that assertion is true, as far as it goes. We have written extensively about the LA FiT in the past, documenting how it came about and how it has recently survived challenges from the Rate Payer Advocate who insisted upon comparing energy costs from utility-scale projects with the “in-city” projects called for by the legislation that mandated the program.
LA’s program has a 100 MW capacity goal and it divides that total into five, 20 MW allocations, or tranches, each to be offered roughly six months apart. The first tranche was to be offered at a base price for energy (BPE) of 17¢/kWh, with each subsequent tranche offered for a penny less than its predecessor. So far, three tranches have been made available, the latest just last month. As we have reported on both of the earlier two tranches (first tranche here and second tranche here), we will focus this post on the third tranche and overall program status.
The third tranche, after some delays due to City Council concerns, opened on March 17. The LADWP FiT website provides a PDF file of their spreadsheet showing the results of the tranche lottery, but unfortunately the underlying spreadsheet is not provided. This means that the PDF has to be converted back to a spreadsheet before any real work can commence, an unnecessary waste of effort.
Hey, LADWP listen up: if you are going to publish data, publish the spreadsheet, not just a PDF. (Thanks, I feel better now.)
Up until now the sense was that in order to have a shot you needed to submit your application as early in the five-day window as possible but these results belie that notion. While the window went up on March 17, none of the 45 applications submitted came in on the first day! The earliest application came in on the 18th at 11:53 (and, despite landing lottery number 21, missed the allocation cut-off) whereas the last application came in on the 21st at 3:46. Interestingly, the last twelve applications received all got that same time stamp, which means that despite their best efforts to the contrary, one quarter of all applications received were received at the last possible minute—and four of those twelve made the cut. More on this in a minute.
The 20 MW of capacity in the tranche are not just one big pool. Rather, 4 MW are set aside for “small” projects (i.e., capacity between 30 and 150 kW) and the remaining 16 MW to “large” projects (150 kW to 3 MW). So does size matter in terms of the likelihood of success? It certainly does—all four small projects made the cut, whereas only 19 out of 41 large projects did. Of the small category projects, two were right up against the size limit (145 and 149 kW, respectively), while the other two were much smaller: 79 and 37 kW. Frankly, in light of the relatively low payment in this tranche—a situation that will only get worse as the BPE declines in subsequent tranches—it will become harder and harder for small projects to pencil out. Given how badly the small category underperformed in this tranche—barely reaching 10% of the 4 MW capacity set aside—LADWP should re-think its approach here. If it is serious about maintaining a small projects category, it needs to increase the BPE for such projects. Otherwise it needs to revise its rules so that the excess allocation in the small category can be used by large projects that otherwise would not make the cut.
The large category is particularly interesting from the sense of who is playing. The 41 projects in the large category came from only 19 different sources, and the biggest player of all is none other than the City of Los Angeles itself! Here’s the list:
Twelve of the nineteen large project applicants submitted only one project, three submitted two projects, one submitted three, two submitted four—and then there’s LA’s Harbor Department which submitted 12 with an average size over 1 MW each!
So how did these players fare in terms of making the cut? Well, the City only got four of its twelve projects in under the wire so one might think that their success was no more likely than anyone else. But here’s an interesting thing—remember those twelve applications that all received the same timestamp of 3:46 p.m.on the last day to apply? You guessed it, all twelve of them came from the City of LA’s Harbor Department! How curious.
The other successful players were Pasha Stevedoring (2 out of 3), OM Solar LLC (2 for 2), PLH LLC (2 of 4) and SunRay Power LLC (2 of 2).
Finally, we wanted to see where all of this solar is going and, given the success of the LA Harbor Department, not surprisingly the big winner is San Pedro, home to the Port of LA. Five projects will be located in San Pedro’s 90731 zip code for a total capacity of 4.6 MW, and one more nearby in Wilmington. The Port is about to become something of a solar center in Los Angeles—a welcome departure from its past reputation as a toxic hot spot. Here’s the map:
There’s more to say about the state of LA’s FiT, so we will save that for tomorrow, including a look at their new dashboard that seeks to provide greater transparency into how the overall program is doing.
We wrote last month about how Glendale was late getting to its required Feed-in Tariff program and that the design that they were advancing was seriously flawed. Well the window on the FiT has finally opened and guess what - it is worse than we thought!
When we first looked at the details of GWP’s FiT we were concerned that there had been no public input into the program’s design. Moreover, the amounts that were going to be offered - based on the staff’s report to the City Council - revealed energy prices so low that no intelligent developer would go anywhere near the program.
The published proposed price for FiT energy - 9.292¢/kWh for peak time delivery and 7.251¢/kWh for off-peak - were well below what a program needed to be subscribed. In fact, those prices were very close to what was being offered in Anaheim and Riverside - two program which had not seen a single FiT application in two years!
Well as bad as we thought all of that to be, we just learned that the reality is far worse. GWP just kicked off their FiT website (which curiously has the title: Revenue for Demand Response) which includes a link to the current Offer Price. As of July 1 (though really not available until today) here is GWP’s actual offer price for FiT energy:
These new prices are 15% lower for peak deliveries and 10% lower for off-peak from the prices described to the City Council just last month! (Interestingly, their fees have not reflected a similar price reduction.) We previously calculated the FiT payment in Year 1 for a 100 kW project to be $13,599 based on the allocation of energy by peak versus off-peak times. Under the new rate structure that payment in Year 1 declines to just $11,688, a 14% hit.
The website is typically devoid of any data explaining how the new price was calculated, but does it really stand to reason that GWP’s “avoided costs” for energy declined by 15% in the past month for peak time deliveries? While the materials submitted to the City Council contained a sample calculation showing how staff reached the originally proposed values, no such calculation is visible on the GWP website. Were the numbers used last month simply fictitious? Or has there been some amazing change in fortunes for GWP’s ability to purchase energy - mind you this at a time when energy prices throughout Southern California are spiking up 59% due to the loss of the San Onofre Nuclear Generating Station. Amazing.
Looks like I won’t have to be making good on my bet come September. Pity.
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