Tag: "feed-in tariff"

11/01/11

  07:48:00 pm, by Jim Jenal - Founder & CEO   , 464 words  
Categories: LADWP Rebates, LADWP, Feed-in Tariff

Run on Sun Comments for FiT Hearing

Tomorrow is the City Council debate on the LADWP’s proposal for a Feed-in Tariff pilot program.  We will be there and our prepared remarks for the City Council follow the jump.  We hope to see lots of solar supporters at the Council meeting and please come up and introduce yourself.

Mr. President, members of the City Council, thank you for this opportunity to address you today with my concerns.

My name is Jim Jenal and I am the Founder and CEO of Run on Sun, a local solar power installation and consulting company headquartered just up the road in Pasadena.  By training I am a scientist, a lawyer, and most recently, a NABCEP Certified Solar PV Installer.

The Feed-in Tariff Proposal before you today should be a Win, but it is not.

Now the program as proposed may well be legal – I have no reason to fault the analysis performed by the City Attorney’s office.

But to ask whether it is legal is really to ask the wrong question.

The better question is:

Is this the right way to go?

The answer to that question is surely no – for at least three reasons:

1)   The DWP’s Proposal – as others, including the author of SB 32, State Senator McLeod have said – violates the Spirit behind what a FiT should be, namely: first come, first served; set price; and guaranteed access to the grid.

2)   The High Uncertainty associated with the Proposal will keep interested, but smaller players like my company on the sidelines.  We simply cannot afford the opportunity costs associated with the present Proposal.  A true FiT would eliminate those uncertainties and open the door to broader participation by a wide range of smaller, but competent companies.

3)   What this Proposal does guarantee is that only the largest players in the industry will participate since only they can afford to roll the dice in the way this Proposal requires.  As a result, there is:

No Guarantee of any local benefit as national companies will likely snatch up all of the funds available.

No Guarantee of any benefit to those small businesses that create the majority of new jobs.

Having attended both of the major workshops offered by DWP staff on this Proposal, it is obvious to me that they have been committed to this approach all along.

If this is the only way that they can figure out what an appropriate price for energy should be – which really seems to suffer from a lack of imagination – then at the least restrict the present bidding scheme to only the demonstration phase.

At the very least, please commit to requiring that the final FiT implementation actually be a FiT and provide a program that meets the Spirit as well as the Letter of the law.

Thank you for your time.

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10/27/11

  02:43:00 pm, by Jim Jenal - Founder & CEO   , 100 words  
Categories: LADWP, Feed-in Tariff

LA City Council to Debate FiT

Next Wednesday, November 2, 2011 at 10:00 a.m., the Los Angeles City Council will debate LADWP’s proposed Feed-in Tariff (FiT) program proposal.  Among other issues to be discussed will be the City Attorney’s opinion on whether the “competitive bidding” scheme that LADWP is proposing during the 6 MW demonstration phase of the FiT program is consistent with statutory requirements. 

The hearing will be held at City Hall, in the John Ferraro Council Chambers, 200 N Spring Street, Room 430.

We will update this post as we learn more.  You can read our prior reporting on the LADWP FiT program here.

(Hat tip, CLEAN LA Solar Coalition.)

09/29/11

  08:44:00 am, by Jim Jenal - Founder & CEO   , 909 words  
Categories: LADWP Rebates, LADWP, Feed-in Tariff

FiTless: LADWP's Ill-Fitting FiT Program

When is a Feed-in Tariff Program not a feed-in tariff?  Apparently when it is conceived by the LADWP - or at least that was the prevailing view in a sometimes raucous public workshop at LADWP headquarters earlier this month.  Here’s our report and recommendations.

Defining a Feed-in Tariff

It might help to begin by defining one’s terms.  As it is commonly understood, a feed-in tariff is a provision by which a utility pays an energy producer for every kilowatt hour their system produces, usually at a preset price that is above market value (to provide an incentive for the installation in the first place).  A feed-in tariff differs from a net metering arrangement since the payment is based on production, not on whether the energy produced is “surplus” to the needs of the site where the production is hosted.

By that definition, what LADWP is proposing to do is not a FiT since they are not offering developers a set price for the energy to be produced.  Instead, at least during their initial “demonstration phase", LADWP is asking developers to compete amongst themselves by offering proposals for a fixed price (as adjusted by LADWP’s time of use modifiers) and LADWP will pick the “winners” based on lowest cost to the utility.

It was this “reverse auction mechanism” that produced the most animated response from a well-engaged audience which included community activists alongside solar industry participants.  Despite the sometimes pointed objections to the demonstration program’s structure, it was clear that DWP staff was committed to this approach, at least for the demonstration phase.  Their adamance seemed to be tied to the idea of “price discovery” - staff seemed to suggest that despite having lots of data about other FiT programs around the world, they were not in a position to properly price their program and so they were going to use the demonstration period to determine just how low a price they could get out of the bidding developers.

Of course, just as with any lowest bid proposal process, there is no guarantee that the lowest bid developers can actually produce a successful project at that cost, and in any event, it seems to violate the fundamental concept of a FiT.  (Interestingly, Black & Veatch -  the consulting firm that is working with DWP - notes that until July of this year the FiT was called the LREP or Local Renewable Energy Program. Perhaps they too realize that what is being proposed might be a good thing, but it is a poor FiT.)

Specific Program Issues

Overall, it appeared that DWP staff had learned from the July workshops and had made some changes to the program’s details - if not underlying design - to respond to the concerns that were raised.  In no particular order, here are the points that struck us:

  • Interconnection - One of the biggest concerns was the wildcard associated with the added cost of interconnecting the project to the grid.  Since the developer had to provide a fixed price bid when their proposal was submitted - before actual interconnection costs were known - the variability of these costs were a great point of concern.  Staff responded by announcing that they would make a chart of potential costs available to developers that would allow them to make a better estimate of their interconnection costs.
    Recommendation: DWP should put an absolute cap on interconnection fees based on the size of the proposed project.

  • Target Energy Price - Although not willing to be nailed down, staff indicated that a target price of $0.20/kWh was in the neighborhood of their expectations.
    Recommendation: DWP should be more forthcoming and provide a price ceiling based on the size of the proposed project.

  • Fees - There were many concerns regarding the amount of the fees and the staff responded by setting up a two-tiered price based on whether the project was “small” or “large” (i.e., small being between 30 and 150 kW).  Moreover, DWP agreed to refund application fees to any developer who is eliminated in the initial screening round.
    Recommendation: DWP should waive all fees for the demonstration phase given the added uncertainty created by their desire to use this for “price discovery."  Developers should not have to pay for the privilege of being part of DWP’s experiment.

  • Participation Limitations - At present, DWP is not intending to impose any limitations on how much of the total 6 MW in the demonstration phase could be performed by any one company.  Thus, in theory, a very large player could come in, underbid every local company and walk away with the entire pie.  Nor are there any preferences incorporated to favor companies that will maximize employment opportunities for local residents. 
    Recommendation: DWP should include a preference into their evaluation formula for local firms and put caps on the total size of the chosen projects that could be performed by any one company.

  • Timing of Next Phase - DWP staff indicated that while they believe the demonstration phase would take approximately 18 months, they also stated that once they had their pricing data, they could move ahead with the full FiT program.  (Of course, this overlooks the fact that they will not necessarily know whether the discovered price is actually sufficient to get a project installed and operational.)
    Recommendation: DWP should move forward with a true FiT at the earliest possible date.

DWP will be taking comments through September 30th and hopes to go to their Board with this proposal later this Fall.  You can access the supporting documents for the FiT at the LADWP website.

09/15/11

  06:23:00 am, by Jim Jenal - Founder & CEO   , 427 words  
Categories: All About Solar Power, Solar Economics, LADWP, Commercial Solar, Feed-in Tariff

LADWP FiT Workshop Preview

FiT issues from JulyBack in July we reported on LADWP’s draft Feed-in Tariff program (FiT) and we noted that there was still a great deal of clarification needed.  Today is the follow-on workshop (which we will be attending) and the preliminary presentation materials indicate some movement in the right direction with some issues still to be resolved.  This post will highlight the changes that we have noted and we will report later in greater detail following the workshop.

In contrast to the plan that was discussed two months ago, the initial “Demonstration” phase of the program has been expanded from a total of 5 MW to 6 MW with 1MW carved out for so-called “small” systems - those between 30 and 150kW.  (Overall the program is capped at systems < 1MW.)  This was hinted at before and makes sense since it is not really feasible for the smaller systems to compete on cost - DWP’s primary selection criteria - against systems many times larger.

Beyond the change in the Demonstration program size, DWP’s materials identify four areas where changes have been instituted based on feedback from the July workshop.  Specifically:

  • Deposits & Fees - specifically, complaints were raised that the fee structure discriminated against smaller systems.  DWP has agreed to reduce the fee for the interconnection study (more below) for small systems and will return application fees to applicants who are rejected in the initial evaluation and ranking phase.
  • Allocations for Smaller Systems - as noted above, a carve out of 1 MW total (850 kW in LA-basin and 150 kW in the Owens Valley) has been set aside for small systems between 30 and 150 kW.  It will be interesting to see if that 85% - 15% allocation ultimately makes sense.
  • Pricing - in the competition for which projects get approved, small systems will only compete against other small systems on price while larger systems will compete with each other.
  • Interconnection Costs - as we had noted before , interconnection costs were a real wild-card in the initial draft proposal.  DWP has responded by saying that it will provide an interconnection cost estimator (online?) to help developers anticipate costs.  Also, once the interconnection study has been completed, developers will have the option to withdraw their application if the proposed cost renders the project financially unappealing.

The timeline remains that DWP intends to seek City Council approval for the Demonstration Program during the 4th quarter of this year with program roll-out to commence in the first quarter of 2012.

If you are interested in attending today’s workshop (from 2-4 p.m. in downtown L.A.) you can read the details in our previous post.

We will keep you updated as the program evolves.

08/26/11

  09:00:00 am, by Jim Jenal - Founder & CEO   , 409 words  
Categories: LADWP, Commercial Solar, Feed-in Tariff

LADWP Presents "Final" FiT Draft

We just heard from the folks at LADWP that they will be holding a second workshop to discuss their revised Feed-in Tariff (FiT) program on Thursday, September 15, 2011 from 2-4 p.m. at their downtown LA headquarters. The workshop is limited to the first 125 people who RSVP and you can do that by clicking here.

Our earlier coverage of the LADWP FiT program - FiT to be Tried: Can LADWP Make a Feed-in Tariff Work? - identified a number of concerns with the initial draft - which frankly did not appear to have been terribly well thought out.  For example, developers were supposed to submit proposals that would be evaluated by LADWP staff based on cost to LADWP - yet the developers would not know all of their costs (including potentially project killing costs for interconnection) at the time the proposals were to be submitted!  This new invitation did not include a link to new materials; it will be interesting to see if those are made available before the meeting.

In any event, here is the press release in full from LADWP:

FOR IMMEDIATE RELEASE
August 25, 2011

The LADWP will host a public workshop at the LADWP headquarters building in Downtown Los Angeles, Thursday, September 15, 2011 at 2:00 p.m.

This workshop will be an opportunity for stakeholders and customers to discuss the changes that have been incorporated in the DRAFT Feed-in Tariff Demonstration Program Guideline based on the feedback that we’ve received.

Your RSVP would be greatly appreciated. Attendance for this workshop will be limited to the first 125 guests who RSVP.

WHAT:

Presentation on LADWP Local Renewable Energy Program (Feed-in Tariff Demonstration)

WHO:

LADWP Solar Program Representatives

WHEN:

Thursday, September 15, 2011 RSVP
2:00 p.m. - 4:00 p.m.

WHERE:

LADWP Headquarters Building - Downtown Los Angeles
111 N. Hope St.
A-Level Auditorium
Los Angeles, CA 90012

Map of the area.

PARKING:

Parking is available free of charge in the Music Center’s underground structure. Attendees should enter on Grand Avenue, between Temple and First Streets and present a printed copy of this invitation to the attendant at the entrance. The attendant will waive parking fees and provide immediate access to the structure.

BUILDING
ACCESS:

The Hope Street level entrance to the LADWP headquarters building is accessible despite light construction currently in progress on the building exterior. Upon entry, guests will be asked to sign in at the Security desk, pass through a screening device and wear a temporary visitor’s badge.

# # #

For more information contact:

Joseph Ramallo
LADWP Public Affairs
(213) 367-1361

We will be there so if you see us, please come up and say hi!

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Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

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