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ICC Grants Emergency Relief to Preserve Ameren-IL Net Metering

Posted by Laura Arnold  /   October 02, 2020  /   Posted in solar, Uncategorized  /   No Comments

Illinois regulators grant emergency relief to preserve net metering, order audit of Ameren's bid to end it

Enel X
By  Oct. 2 2020, 9:57 a.m. EDT
UPDATE: Oct. 2, 2020: The Illinois Commerce Commission on Thursday granted an emergency motion to solar advocacy organizations urging Ameren "to provide full net metering credits to residential solar customers until an audit is completed."
The commission also directed its staff to perform the audit and determine if Ameren has reached the required threshold under state law for ending retail net metering in its service territory. Ameren says it may reach that threshold imminently.
ICC Chairman Carrie Zalewski "expressed concerns that by allowing Ameren to end net metering before the Commission approved the replacement tariff as required by statute, would be a violation of the legislature’s intent to transition smoothly from retail net metering to a successor distributed generation rebate," the commission said in a press release.

Dive Brief:

  • The continued growth of residential solar is under threat in Illinois, the solar industry said this week, with Ameren asserting a 2016 state law allows it to stop compensating home solar customers at the full retail rate for the power they send back to the grid.
  • The Future Energy Jobs Act of 2016 allows a utility to work with state regulators to replace the full retail rate, based on net metering, with a negotiated "distributed generation rebate" when the amount of distributed solar generation reaches 5% of the peak demand on the system. Ameren says it will soon reach that threshold.
  • The Illinois Commerce Commission (ICC) has set a public meeting for today, following an emergency request from the solar industry and environmental groups asking it to order Ameren to continue full retail compensation, kilowatt-hour for kilowatt-hour, until a new distributed generation tariff is developed, as required by the 2016 law.

Dive Insight:

The roots of what solar advocates now say is a crisis stretch back to March when Ameren announced that distributed solar generation had reached 3% of its load, a threshold which, by law, required the ICC to open a case and begin developing a replacement for the net metered full retail tariff that home solar owners had expected when financing their projects.

In July, ICC administrative law judge Leslie Haynes ruled that Ameren had not correctly calculated the percentage of customer-based distributed generation, based on her interpretation of the law. In its response asking for reconsideration, Ameren noted that her statutory interpretation meant the solar generation only amounted to 1.67%, not the 3% the utility had figured.

Among the reasons for the difference were issues as to whether the utility had included the output of large community solar arrays and whether it had included demand served by independent power providers when calculating the percentage of distributed solar generation serving the system.

The company's annual net metering report, filed with the ICC on March 31, stated that total system peak demand as of Feb. 10 had been 1,939.86 megawatts and the total generating capacity of 3,177 customers on net metering was 50,725.71 kilowatts.

In a Sept. 10 memo to the ICC, Haynes urged the commission to direct its staff to begin investigating Ameren's claims that it can now abandon its net metering rider even though the ICC and the company have not yet developed a distributed generation tariff. Haynes noted that until that happens, it must "operate in compliance with the [existing] tariff."

Haynes on Sept. 24 issued an order continuing the ongoing hearing on the issue until Oct. 9.

But a coalition of solar installers and environmental groups on Monday filed a request for the immediate emergency order specifically requiring Ameren to continue the existing full retail net metering rider. The coalition says that allowing Ameren to abandon net metering without a rebate tariff in place would cripple further solar development — exactly the opposite of what the Future Energy Jobs Act of 2016 was designed to do.

“This move is contrary to Illinois’ commitment to creating jobs, protecting consumers and expanding clean energy,” said Nakhia Morrissette, central region director and counsel for Solar Energy Industries Association (SEIA) in a prepared release. “We’re calling on the ICC to fix it urgently before we lose more solar jobs.”

The ICC set an open meeting for today and the administrative law judge set a deadline for written comments by the close of business Wednesday.

In its response to the emergency meeting request, Ameren wrote that there is no emergency, that it would abide by the net metering tariff until the ICC replaces it,  and that it would be filing a proposal by the end of the week explaining how residential customers with installed solar can apply for the new distributed generation rebates after "locational rebate values have been calculated."

Unlike the current retail net metering tariff, which credits a residential solar customer for excess power sent into Ameren's delivery system at the same rate that customer pays to buy power, the rebate tariff is expected to include only the cost of the energy, not delivery costs. And the rebate is expected to vary by location.

Emergency Motion Filed to Prevent Ameren from Devastating Illinois’ Solar Market

Posted by Laura Arnold  /   October 01, 2020  /   Posted in solar  /   No Comments

ELPC logo

EMERGENCY MOTION FILED TO PREVENT AMEREN FROM DEVASTATING ILLINOIS’ SOLAR MARKET

Monday, September 28, 2020

Solar Advocates File Emergency Motion to Prevent Ameren from Devastating Illinois’ Solar Market

Chicago – Solar industry and Environmental groups today filed an emergency motion with the Illinois Commerce Commission (ICC) to prevent utility company Ameren from devastating rooftop solar in Southern and Central Illinois. Last week Ameren told the Commission it intends to eliminate fair compensation for the solar energy homeowners and families produce. Ameren would slash the credits solar customers receive for excess clean energy, a foundational policy known as “net metering,” as soon as October 1.

The abrupt move would cost the average residential solar customer hundreds of dollars per year, wiping out savings on energy bills and putting solar projects out of reach for many consumers. Ending the policy early impacts every new solar customer in Ameren territory as well as hundreds that have already committed to installing solar but now won’t receive the full savings they signed up for. Ameren’s move would disrupt the solar group purchasing programs currently being sponsored by municipalities and advocacy groups in Champaign-Urbana Carbondale, and several Metro East counties that were expected to drive numerous residents to purchase new solar systems during the month of October.

By suddenly reducing the value of rooftop solar, Ameren is also threatening jobs at Illinois’ independent solar businesses, which have already seen 3,500 jobs disappear this year alone due to a lack of funding in the state’s clean energy program and the impacts of COVID19.

“This move is contrary to Illinois’ commitment to creating jobs, protecting consumers and expanding clean energy, said Nakhia Morrissette, Central Region Director & Counsel for SEIA. “We’re calling on the ICC to fix it urgently before we lose more solar industry jobs.”

”Our employees and customers will be directly hurt if Ameren is allowed to pull the rug out from under our market,” said Shannon Fulton, VP of Development for StraightUp Solar in Bloomington, IL. “I hope the Commerce Commission understands that this is a threat to jobs and consumers’ pocketbooks in the middle of an economic crisis. We need them to take immediate action.”

Clean energy groups argue that Ameren is distorting Illinois statute in order to avoid its legal responsibility to fairly compensate rooftop solar and help Illinois meet its clean energy goals. In July, an ICC administrative law judge found that Ameren’s calculations on net metering limits were wrong and estimated they should continue paying customers the full value for their solar energy for at least 2 more years.

But on September 24th, the ICC issued a ruling that Ameren is using as justification to continue relying on its faulty calculations and end net metering years ahead of schedule.

“Right now, Illinois families in Ameren territory are unable to make a confident calculation of the value of investing in rooftop solar, stalling the industry and stymying consumer choice,” said John Delurey, Midwest Director at Vote Solar. “The consequences are especially dire for low-income families, who would no longer have access to the solar cost savings from the Illinois Solar for All program.”

“We’re calling on the Commission to act quickly and decisively to protect the state’s cornerstone net metering policy while it continues to develop new policies to fairly compensate rooftop solar customers for the significant value they provide to the electric grid,” said Brad Klein, Senior Attorney at the Environmental Law & Policy Center, who helped prepare the legal filing.

The emergency filing was submitted to the ICC by the Solar Energy Industries Association, Illinois Solar Energy Association, Coalition for Community Solar Access, Environmental Law & Policy Center, Natural Resources Defense Council, and Vote Solar.

CEN: Competition, Not Mandates, Will Secure our Energy Future

Posted by Laura Arnold  /   September 29, 2020  /   Posted in Uncategorized  /   No Comments

Mark Pischea_CENCEN logo

Mark Pischea is the President & CEO of the Conservative Energy Network.

Competition, Not Mandates, Will Secure our Energy Future

Competition, Not Mandates, Will Secure our Energy Future

By Mark Pischea

While our country is in the clutches of a pandemic, recovering from an economic downturn and heading into a presidential election, it might not seem like the time to discuss clean energy. But innovation in the way we generate, sell, and consume energy has a profound impact on our economy, grid security, and even our political boundaries.

Public opinion polling consistently demonstrates overwhelming support for clean energy. There’s no question that clean energy is our future (and increasingly our present). But there is disagreement over how to achieve our future energy economy.

Until a few years ago, policy discussions around renewable energy focused almost exclusively on heavy-handed government mandates and anti-competitive standards, with the goal to make our energy output greener, often at the cost of the economy and ratepayers themselves.

Just look at the California experiment, where state leaders sought to force renewable energy development in the context of an outdated vertically integrated monopoly utility model—and which has led to exorbitant costs for its residents, brown outs and reliability crises, with little progress on emissions reductions.

Now compare that to the Texas model, which has instead focused on organic growth of the renewable energy sector through competitive markets. Texas, a red state once known only as an oil giant, is now one of the leading producers of wind energy in the nation—generating more than most countries.

The Conservative Energy Network (CEN) believes that the best approach to advance our nation’s clean energy economy is to reduce barriers to market access for new technologies and companies who are innovative and responsive to shifting consumer demands.

Voters, even conservatives, agree. According to a November 2019 survey conducted by Public Opinion Strategies for CEN, 70% of voters across the political spectrum prefer an approach that emphasizes markets and private clean energy production rather than “government mandates and quotas.” Further, 79% support a new system for purchasing electricity that allows people to have a choice of where and what kind of electricity to buy.

Texas’ competition-based energy market’s performance is outpacing the nation, and can be seen as an ideal model for the strength of a free-market energy economy. This type of marketplace allows clean energy to be part of the solution, and for market forces to determine the best price and generation type, in contrast to overbearing, special interest driven-mandates that could drive up prices and leave some locations with an energy shortfall.

Clean energy and competition go hand in hand. The emergence and rising prominence of the clean energy sector represents a boon for the country, helping to create jobs and spur a robust competitive generation marketplace that benefits individual ratepayers and businesses, while unleashing the power of innovation to update and modernize our aging grid to make it safer from both internal and external threats.

This is especially relevant given our current economic situation. Prior to the COVID-19 pandemic, the clean energy sector was among the fastest growing industry segments in the United States, employing over 3.4 million Americans from all 50 states across the supply chain—from construction and manufacturing to engineering, research and development, installation, and even environmental science.

The economic benefits of this robust sector are felt not only in industrialized regions and urban centers. Increasingly rural and agricultural America is taking a keen interest in renewables, which are helping to inject local jobs, investment, and tax revenue into struggling communities. Farmers are even installing solar and wind farms on their land, using these technologies as a second “cash crop” to diversify their income when yields are down.

Recent academic research commissioned by CEN state teams in Indiana, Colorado and Texas has shown that clean energy is a prominent and popular economic driver in rural regions—and it should be part of both an immediate economic recovery plan and long-term sustainability. Eschewing our antiquated monopoly utility system in favor of market-driven competition will take us there.

As more consumers demand clean energy, it’s up to markets to respond. However, without policy solutions that advance real competition, and until our state and federal leaders reach consensus to replace our nation’s outdated and costly monopoly utility system, any progress is fleeting—and ratepayers will be stuck with the fallout.

We’re at a turning point in our country. We will reach an enduring solution to our energy future when policymakers on both sides of the aisle recognize the inevitable benefits of transitioning toward competitive energy markets. Electricity competition will encourage innovation and technology development, keep rates low and stable, maintain service reliability, lower emissions, and allow our economy to thrive.

Ultimately, we strongly believe that it’s on state policy supporting greater competition—rather than monopolies—where bi-partisan solutions will be found.

What Can Distributed Generation Do For the Grid?

Posted by Laura Arnold  /   September 29, 2020  /   Posted in solar, Uncategorized, wind  /   No Comments

Borenstein, Severin

What Can Distributed Generation Do For the Grid?

A thought experiment suggests how much rooftop solar could reduce transmission and distribution costs.

California and other locations are moving to renewable energy at high speed. But even in these forward-leaning areas, there is still an active debate about which renewables and where. Part of that debate centers on the role of distributed generation (DG), which almost exclusively means rooftop solar. (Batteries are storage, not generation, but I will get to them shortly.)

The benefits and costs of DG continue to be debated, a topic I have written about here a number of times. (If you are suffering from insomnia, try my blogs from 2013, 2015, 2015 again, 2016, and 2016 again.) Per kilowatt-hour (kWh), rooftop solar costs more than power generated from large-scale solar farms, but advocates argue there are advantages that such a simple comparison misses. Among the first they mention is the savings in transmission and distribution costs that result from generating electricity at the location where it is used, a topic that Lucas dug into in June 2018.  Lucas discussed some research that looks at specific circuits of a specific utility and studies what the savings might be. That research found that the grid benefits were substantial in a few locations, but were quite small for the grid overall.

Today I want to take a macro approach, looking at just how much the savings could be for the entire grid.

To begin with, building a grid is very expensive. The US has spent trillions of dollars on its own grid. But those are sunk costs; nothing we do now will recover any of that money.   So, those costs are not relevant when asking whether to build additional distributed versus grid-scale renewables going forward. Similarly, the country has sunk billions into rooftop solar that’s already installed, including some very expensive projects during the technology’s nascent stage, which is also irrelevant for policy going forward.  The critical question now is: how much of the expenditures that the country is likely to make on the grid in the future could be avoided by installing more distributed solar in the future?

One guide that I have heard referenced by two different leaders in the rooftop solar industry is the estimate that the US will have to spend $1.1 trillion over the next 25 years to maintain, expand, and modernize its grid. The source is this 2015 DOE report (page 3). That’s a daunting number, but 25 years is also a long time, and a lot of electricity. (National expenditures on many things are impressive over 25 years: if current trends hold, it looks like the US will spend about $0.9 trillion on cheese in the next 25 years.)

Let’s assume that the $1.1 trillion number, adjusted for inflation, applies today for the next 25 years. Next, let’s ask how much of that grid investment could be avoided if we were to install enough additional rooftop solar over the next couple decades to provide 10% of the kWh that otherwise would have been produced by grid generation. A very generous estimate is 10%. That would mean that moving a given additional proportion of total generation to rooftops would reduce the needed grid investment going forward by the same proportion. There are two fundamental reasons the savings would likely be much smaller:

  1. The grid exhibits significant economies of scale. If every customer were to consume twice as much electricity, it would not require twice as much investment in the grid. Conversely, if every customer were to consume half as much – or if half of all customers were to drastically cut their consumption from the grid – it would not cut in half the level of investment we need going forward.
  2. Nearly all customers with rooftop solar, even if they generate as much as they consume, still use the grid extensively, and every second of the day. A residential system without batteries (still the vast majority of new systems) will export a large share of the power it generates into the grid when the solar panels are generating more than their consumption, and the household will import substantial quantities from the grid when they are consuming more than their panels are producing. That will be a smaller factor for solar with batteries, but it won’t go away. Once the batteries are charged, customers will again be exporting into the grid. And on long stretches of cloudy/rainy/smoky days, they will be depending on imports from the grid. In fact, while a solar customer with some batteries will surely do less electricity exchange with the grid, it is not at all clear that they would want to make do with any less service capacity on their wire.

So, an assumption that replacing X% of customer energy demand from the grid with distributed solar generation would reduce the need for grid investment by X% greatly overstates the true savings. But let’s go with it anyway for a minute.  If that were true, how big would the savings be? The answer is 1.2 cents per grid-generated kWh that is displaced by rooftop solar.1 (Calculation details in that footnote.)

In other words, if rooftop solar PV otherwise had the same attributes as grid scale solar PV, but allowed grid investment to be reduced proportionally to its production, that would enhance its value by about 1.2¢/kWh. In reality, the number would be much smaller for the two reasons explained, almost certainly well under one cent per kWh.

To put this calculation in context, 2019 non-partisan estimates put the midpoint unsubsidized levelized cost for residential rooftop solar at 20¢/kWh, for commercial/industrial rooftop solar at 11¢/kWh, and for grid-scale solar at 4¢/kWh. That’s a big gap. Savings on transmission and distribution isn’t going to fill more than a tiny fraction of it.

Of course, savings on transmission and distribution aren’t the only consideration in comparing rooftop to grid-scale renewables. One that has grown in importance and attention since I last discussed the topic is resiliency, at least when the system includes batteries. Still, it is worth pointing out that, just as with a gasoline generator, the benefits of that resiliency flow primarily to the customer with the solar, which is not a compelling argument for preference in public policy.

None of this is to say that rooftop solar can’t ever be a winner for society. In some areas, grid scale renewables are not feasible due to a lack of land availability (an advantage of rooftop real estate) or barriers to building transmission or distribution. As a result, in specific locations, distributed generation can be more cost-effective. But we aren’t building rooftop solar in the specific locations with those constraints! We are building them anywhere that any home or business owner benefits privately, even if grid scale renewables would be much more cost-effective for society.

Anyone who is paying attention understands that the planet is warming and we need to stop burning fossil fuels. But to do that in a politically sustainable and equitable way, we also need to find alternatives that are cost-effective for society as a whole. We got into this mess through individual choices that don’t account for the impact on others in society. I believe that we can only get out of it with solutions that do account for those impacts.

Despite my anxiety about national politics, I’m still mostly tweeting energy news/research/blogs @BorensteinS

Keep up with Energy Institute blogs, research, and events on Twitter @energyathaas

Suggested citation: Borenstein, Severin. “What Can Distributed Generation Do For the Grid?” Energy Institute Blog, UC Berkeley, September 28, 2020, https://energyathaas.wordpress.com/2020/09/28/what-can-distributed-generation-do-for-the-grid/

1 I assume that there is no growth in demand over 25 years (which biases upward the savings per kWh), so I divide the $1.1 trillion investment by the 2015 consumption of 3.900 trillion kWh times 25, which yields $0.0113/kWh in 2015 dollars.  Inflating that figure to 2020 dollars using the all-urban CPI gives $0.0123/kWh.

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