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Governing Magazine: Utility Companies Have a Solar Power Problem; You may not like this but you gotta read it!

Posted by Laura Arnold / January 16, 2015 / Posted in Uncategorized / No Comments

Utility Companies Have a Solar Power Problem

BY STATELINE | FEBRUARY 19, 2014

Someone is installing a solar power system in the U.S. every four minutes. Generous state and federal tax credits for hooking up solar panels on roofs or in fields make solar energy attractive to homeowners and businesses.

Another bonus is that those who generate solar energy can roll over what they don’t use as credit against their next utility bills, like rollover minutes on a cell phone bill, or sell excess energy back to the utilities.

Utility companies aren’t happy.

As the solar industry thrives, states are bracing for more showdowns this year between solar advocates and utility companies over how to balance reimbursing those who generate solar energy with supporting the country’s power grid.

The battles are heating up in sun-soaked states like California, Arizona and Hawaii where solar projects are surging, but also in less expected places, such as Kansas and North Carolina.

Driving the debate is the rapid growth in solar installations, up 76 percent in 2012 from 2011, according to the most recent data available from the Solar Energy Industries Association.

Solar is still a small piece of the energy pie in the U.S., at around 1 percent of total energy produced. Just four states accounted for more than two-thirds of grid-connected solar system installations in 2011: Arizona, California, New Jersey and New Mexico.

New Jersey, while not considered as sunny as other states, has one of the most aggressive renewable portfolio standards in the country. The state, for example, requires suppliers and providers to procure at least 4.1 percent of sales from qualifying solar electric generation facilities by the year 2028.

At Issue: Net Metering

Various state and federal tax credits for installing solar panels on homes, businesses and farms make economic sense for those willing to make the investment, asStateline has reported. Solar system users in Hawaii, for example, can take 35 percent of installation costs off their state tax bills and another 30 percent in federal tax credits. The average cost of installing a 600-square-foot solar system to power a typical home is $55,000.

What concerns utilities is the system of rolling over credits for excess electricity to future utility bills, called net metering. Currently, 43 states and the District of Columbia have policies encouraging the practice.

More than 323,000 homeowners and businesses used solar panels in net-metering programs in 2012, compared with 151,000 in 2010, federal data show.

The Coalition for Solar Rights, which advocates for solar, called net metering “one of the most important state policies for empowering Americans to generate their own power from the sun.”

Utilities, however, say many solar customers aren’t paying their fair share. While net-metering polices vary by state, customers with solar systems are usually credited at the full retail electricity rate, which includes not just the cost of the power, but all the fixed costs of the poles, wires, meters and other infrastructure that make the electric grid safe and reliable.

An average residential customer paying $110 a month for electricity is receiving $60 worth of grid service, according to a report from the Edison Electric Institute, a trade group that represents U.S. utility companies.

“Through the credit, net-metered customers effectively are avoiding paying these costs for the grid,” the institute wrote. These costs then are passed on to other customers, it said.

In California, which leads the country in solar production, the state’s net-metering program could end up costing state ratepayers $1.1 billion a year by 2020, according to a report last fall from the California Public Utilities Commission.

Utilities Want Surcharges

Some utilities are now pressing state regulators or legislatures to charge solar customers a fee or to reduce the rollover credits with the money going to help maintain the power grid. That was the issue last year in Arizona, where the state’s largest electric utility, Arizona Public Service Co., succeeded in attaching a fee to new solar installations. The company estimated that each of the state’s 20,000 solar rooftop customers costs $1,000 in upkeep to the grid, which was shifted to other nonsolar customers.

The Arizona Corporation Commission, the state’s public utility commission, voted 3-2 last November to impose a 70-cents-per-kilowatt charge on new solar installations. The cost amounts to about $4.90 a month for solar customers.

“The Arizona Corporation Commission has taken an important step in reforming the state’s net-metering policy,” Don Brandt, APS president, said at the time. “The ACC determined that net metering creates a cost shift.”

Tom Kuhn, president of EEI, the utility trade group, also praised the ruling. “The ACC decision recognizes that it’s only fair that everyone who uses the grid and benefits from its services should help pay to support it and keep it operating reliably at all times,” he said.

The action was a limited victory, however. APS had sought to charge $50 to $100 a month to future customers who install solar panels. [emphasis added]

In another dispute, solar proponents in Kansas have launched a campaign this year against legislation that would reduce the amount of money solar customers would get for their excess power. The issue also is brewing in North Carolina, where Duke Energy wants to charge solar customers more to help maintain the grid.

Possible changes that could affect the benefits of solar to customers from current net-metering policies sparked protest rallies last year in Arizona, California and Colorado.

Expanding Caps

Another flashpoint deals with capping the number of solar installations that can qualify for reimbursements. When states first set up net metering in the 1980s, the approach was new and unproven so some states limited the programs. Once a state reaches its cap, businesses and residents still can put solar panels on their buildings and homes, but they won’t get reimbursed at the same level.

Solar advocates want to increase the caps while utilities largely do not. Last year, several states acted on this front:

New York raised net-metering caps as part of Democratic Gov. Andrew Cuomo’s NY- Sun Initiative to 3 percent of peak load from 1 percent.

[IndianaDG Editor's Note: We reported earlier that NY has already again increased their net metering cap from 3 to 6%. See http://www.indianadg.net/ny-gov-announces-clean-energy-initiatives-increasing-net-metering-cap-from-3-to-6/]

California was poised to meet its cap as early as this year, so lawmakers passed legislation that orders state regulators to craft a new net-metering system by 2017, opening the door for regulators there to remove all caps.
Minnesota raised the limit on net metering to 1,000 kilowatts from 40 kilowatts.
Efforts are underway this year in Massachusetts and Vermont to raise their caps.

“Net metering remains a pivotal policy issue in 2014,” Ken Johnson, a spokesman for the Solar Energy Industries Association, a trade group, said. Among actions at the state level his group is watching this year include a series of net-metering workshops to be held by the Arizona Corporation Commission and studies in Colorado and Nevada to evaluate the costs and benefits of net metering.

[IndianaDG Editor's Note: Distributed generation and net metering via HB 1320 will be a pivitol policy issue during the 2015 session of the Indiana General Assembly.]

A Partisan Issue?

In the days leading up to the Arizona Corporation Commission’s decision on net metering, a conservative group called 60 Plus Association ran a controversial television ad that suggested that solar companies are against changes in net metering because the companies rely heavily on government subsidies. The ad compared solar companies to Solyndra, the failed solar startup that received some $500 million in federal loan guarantees that conservatives say epitomizes what is wrong with the Obama administration’s stimulus and other policies.

Some conservative groups, including the American Legislative Exchange Council and the Heartland Institute are calling on states to change net-metering polices.

In the past, Republican governors have been proponents of solar. Former California Gov. Arnold Schwarzenegger in 2006, for example, launched a Million Solar Roofs Program with the goal to provide California with 3,000 megawatts of clean, renewable energy and reduce the output of greenhouse gases by 3 million tons. Former Minnesota Gov. Tim Pawlenty endorsed and signed in 2007 a “25 by 2025” law requiring that 25 percent of the state's electricity be produced from renewable sources by 2025, including solar.

Some of the most vocal supporters of expanding solar and net metering are currently Democrats.

Research from the Pew Research Center found that since April 2009, there has been a 30-point decline in the percentage of Republicans and Republican leaners supporting more federal funding for research into alternative energy technologies, such as solar. Most Republicans and GOP leaners (59 percent) told Pew that businesses will produce technology without government investment. (The center is a sister organization of Stateline.)

Vermont Gov. Peter Shumlin, a Democrat, pleaded for more solar projects in his 2014 budget address. “When we see solar panels on rooftops in our neighborhoods or on our fields, we are often looking at projects made possible by our net-metering program,” he said last month. Shumlin said he was committed to expanding net metering this session.

Solar could become an issue in the Florida gubernatorial race with the involvement of former Gov. Charlie Crist, then a Republican and now running for the Democratic nomination. Solar advocates gave Crist in 2009 the “Golden Meter” award when he was governor for Florida’s net-metering rules adopted the previous year. Republican Gov. Rick Scott has endorsed renewables, but has not been vocal on net-metering programs.

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IndianaDG Editor's NOTE: Want to know about the source of this attack on net metering? Download and read these documents:

EEI_disruptivechallenges_Jan 2013

EEI Comments on Value and Cost of Distributed Generation (Including Net Metering)_2014-02-14

Watch this website for more updates on HB 1320 and the arguments against this proposed legislation. We urge you to educate yourself on this proposed legislation and to discuss it with your state legislators.

INDIANA: Proposed Bill (HB 1320) Could Mean Change For Solar Companies & Customers

Posted by Laura Arnold / January 16, 2015 / Posted in 2015 Indiana General Assembly, solar, Uncategorized / No Comments

Brad Morton, President, Morton Solar LLC

Click link below to watch video story on this issue:

http://www.clipsyndicate.com/video/play/5556965

INDIANA: Proposed Bill Could Mean Change For Solar Companies & Customers

A new bill proposed in Indiana is causing some friction between solar companies and utility companies. After seeing House Bill 1320, the owner of a local solar energy company is speaking out against it. Some customers are backing him. "It's just great to have a teeny tiny little electric bill every month," says Lynnette Lewellyn. Lewellyn says she switched to solar power about a year ago, but that "teeny bill" could soon be much larger. "I don't think there's anything we can do," says Lewellyn. A bill introduced in Indiana has renewable energy users worried. If passed the measure would allow utilities to raise electric rates for customers using solar power. "It's counterintuitive to encourage people to do something to save fossil fuels and save energy, and then to turn around and penalize them," says Lewellyn. What the exact rate increase would be is still uncertain. Lewellyn says she believes electric companies are backing the bill because they want people using solar power to pay more for their use of a grid, or back up electricity system. "It doesn't make a lot of sense to us, as home owners with a solar facility that the state and the federal government are constantly trying to encourage us all to save energy, to not use fossil fuels. Here we spend all of this money to put in a facility like this, and now the state is looking at possibly charging us to have a facility like this," says Lewellyn. Brad Morton, owner of Morton Solar in Evansville, says he's speaking out against the bill. "It's really worse than we anticipated," says Morton. Morton says he spoke with local representatives about the bill, he's also turning to social media for support, and he may take his opposition to the state capital. "It's possible we will have to restructure our company, we might have to move to another state," says Morton. He says he's not sure how this bill could affect his business, but he's not waiting to find out. "We're going to do whatever it takes."

Vectren representatives say this bill is about fairness. They want solar power to continue to grow, and they support it. Here is a statement Vectren released regarding House Bill 1320.

Vectren's Statement on House Bill 1320

· The legislation is based on one principle: Every customer who generates their own power - through customer-owned generation, such as rooftop solar panels, should be compensated at a fair rate for the power they sell and should also pay a fair price for the use of the electric grid.

· This bill is being presented in an effort to ensure fairness among all residential and small commercial customers when it comes to paying for use of the electric grid.

· As a result of the current policy called net metering, a customer who generates their own power does not pay their fair portion of the costs of the utility infrastructure needed to serve them. Those costs are shifted to other customers.

· Without a policy change, the typical Hoosier family may pay significantly more to maintain the grid than a customer with solar panels - even though the solar customer is also using the grid when generating excess power, or at night or when the sun doesn't shine.

· As proposed, customers who currently have service agreements with Vectren to operate their own generation units would be "grandfathered" and not subject to any future changes to net metering policies or rate structures that are directly related to this legislation and may occur if it's passed.

· The goal of the bill is to create fair rates for everyone who uses the grid so that the electric grid in Indiana continues to be safe and reliable while supporting a healthy and growing economy, including the continued growth of renewable energy sources.

· The bill, as proposed, would allow for the leasing of solar panels and calls for consumer protection for those who lease or buy customer owned generation.

· Contrary to what you may see or hear about this bill, the legislation in no way seeks to deter renewable energy resources, such as solar power or wind energy.

· Vectren continues to be an advocate for renewable energy. We have power purchase agreements for 80 megawatts of wind power from wind farms near Lafayette, Ind., and we own and operate a landfill-gas-to-electricity plant near Winslow, Ind., that converts methane from landfilled trash into electricity. We continue to explore other affordable, Hoosier renewable energy sources to add to our portfolio, including solar options.

NOTE: Read the introduced version of HB 1320 HERE >

http://iga.in.gov/static-documents/0/d/3/b/0d3b7c8d/HB1320.01.INTR.pdf

E&E: Ind. proposals set up legislative showdown over energy efficiency, solar

Posted by Laura Arnold / January 15, 2015 / Posted in 2015 Indiana General Assembly, solar / No Comments

Indiana Energy Association (IEA) President Mark Maassel

Citizens Action Coalition (CAC) Executive Director Kerwin Olson

Ind. proposals set up legislative showdown over energy efficiency, solar

Jeffrey Tomich, E&E reporter

Published: Thursday, January 15, 2015

Indiana's legislative session is scarcely a week old, but a pair of bills has already re-established a wedge between utilities and clean energy advocates.

One of the measures would allow utilities to propose their own energy efficiency goals and programs. The other would alter terms and impose demand charges for utility customers who choose to generate a share of their electricity with solar energy systems.

The bills dive into two of the thorniest energy policy issues facing states today -- how to encourage reductions in energy use and give consumers the ability to generate energy with rooftop solar arrays while keeping utilities financially strong and able to reinvest in the grid.

The Indiana Energy Association, a group made up of the state's investor-owned natural gas and electric utilities, believes the measures filed this month strike the right balance. But environmental and consumer advocates say the bills tip the scales too far in favor of utilities and make Indiana a test bed for utility-friendly legislation.

"The utilities are absolutely rewriting the rules of the game in Indiana," said Kerwin Olson, executive director of the Citizens Action Coalition.

The distributed generation bill, H.B. 1320, was filed by state Rep. Eric Koch (pronounced Cook). It would reduce the credits that solar-owning customers receive for selling excess power back to the grid. It would also established fixed charges for solar owners.

Olson said the measure would crush the hopes for solar expansion in Indiana, where solar arrays are few and far between -- a reason he's reached out to national solar advocacy groups for support.

"It's a kill PV bill," he said. "There's going to be a solar fight in Indiana."

Mark Maassel, president of the Indiana Energy Association, whose members include Duke Energy and Indianapolis Power & Light, said the lack of solar penetration makes this a good time to establish a stable, transparent policy framework.

He disagreed that the measure is anti-solar and said it would specifically legalize leasing of solar systems, a practice that's currently not allowed. The bill would also "grandfather" existing customers, meaning they would see no change in net metering terms.

The efficiency bill, S.B. 412, is sponsored by Sen. Jim Merritt, chairman of the Senate Utilities Committee. But the policy originated with Republican Gov. Mike Pence, based on a recommendation by the Indiana Utility Regulatory Commission (EnergyWire, Oct. 14, 2014).

The measure comes almost a year after Pence signed another of Merritt's bills, S.B. 340, that made Indiana the first state to roll back an efficiency requirement. The 2009 mandate, which targeted a 2 percent reduction in retail electricity sales by 2019, was established by state regulators under former Gov. Mitch Daniels, also a Republican.

An independent report prepared with the IURC last summer showed the independently run Energizing Indiana program was overwhelmingly cost-effective, saving $3 for every dollar spent. On the commercial and industrial side, the savings were as much as $5.49 for each dollar invested (EnergyWire, Aug. 18, 2014).

But Republican critics said the one-size-fits-all program was ill-suited for big energy users and later raised concerns about future costs.

In the end, Pence signed S.B. 340, pulling the plug on Energizing Indiana. As he did so, he promised to put forward new efficiency legislation in 2015.

A plan from utilities

In the meantime, utilities have proposed their own efficiency programs for 2015. The programs largely mimic the core programs established under Energizing Indiana but are less ambitious in their energy savings goals.

The bill filed Monday would similarly require utilities to propose their own efficiency programs and goals specific to their service area every three years beginning in 2017. The programs would be submitted as part of long-range integrated resource plans submitted to regulators that outline how utilities will meet electricity demand.

Large industrial and commercial energy users would be allowed to opt out of utility-run efficiency programs.

And the bill would let utilities recover administrative costs as well as "lost revenues."

Maassel said lost revenues are defined as those fixed costs, such as maintaining the local grid and providing billing services, that remain constant even with lower energy use. Some of those costs are recovered through fixed customer charges. But some are collected through variable per-kilowatt-hour rates.

Overall, utilities may seek a couple of tweaks in the efficiency bill as written but are generally pleased with it, he said.

Not so for Citizens Action Coalition. While the general parameters of the bill are no surprise, Olson said the measure "goes even further than we expected."

Specifically, he said the lost revenue provision is too generous and will lead to the annual transfer of hundreds of millions of dollars from consumers to electricity providers. That will erode the cost effectiveness of the efficiency and undermine efforts to reduce energy use.

"We can live with a weak bill," he said. "But we can't live with a weak bill that's a profit center for utilities."

Indiana Rep. Eric Koch (R-Bedford)

Indiana Sen. Jim Merritt (R-Indianapolis)

Solar farm coming to Kokomo; 5 MW solar PV to be installed on former Continental Steel site

Posted by Laura Arnold / January 14, 2015 / Posted in solar / No Comments

solar farm

IT’S OVER 9,000 — More than 21,000 solar panels will be installed on the former Continental Steel site. The solar farm is expected to be operational by December.

Solar farm coming to Kokomo

Inovateus will power 1,000 homes from former Continental Steel site

Posted: Tuesday, January 13, 2015 4:00 pm

By Pat Munsey

It’s an idea that the city of Kokomo has flirted with for seven years, and now it’s happening. Inovateus Solar LLC of South Bend has entered an agreement with Duke Energy to produce solar power in the city, and it will use the former Continental Steel site to do it.

“We are excited,” said Mayor Greg Goodnight. “It generates a little bit of revenue for the city, but they take on the responsibility of the area being covered and helps us save a little money on upkeep.

“We’ve had other people show interest in doing this over the years, but this seemed like the best fit. Everything is good environmentally. There are some places on the property where they will be limited on what they can do, but others that will allow a more liberal reuse.”

According to Duke Energy spokesman Lew Middleton, the company has signed a 20-year agreement with Inovateus to produce up to five megawatts of power annually from a solar farm. That five megawatts will power 1,000 homes annually. He acknowledged that the Kokomo solar farm will be a small part of Duke’s portfolio, but it is important.

“We are trying to provide clean and responsible energy,” said Middleton. “It is a commitment to add more ‘green’ power to our energy mix as part of a legal settlement we reached with consumer groups in August 2013 regarding our Edwardsport coal gasification power plant air permits.”

Middleton said the agreements have been submitted to the Indiana Utility Regulatory Commission for review and approval. Duke hopes for a decision by the middle of 2015.

Austin Williams, senior account executive with Inovateus, is similarly pleased about the prospect of bringing a solar farm to Kokomo.

“It’s a great project,” said Williams. “We’re going to cover the old Continental Steel site with solar panels. It’s exciting.”

Williams said that in talking with officials from the Environmental Protection Agency, he discovered that the agency had been searching for an accepted use for the property ever since remediation was completed.

“I think we’re finally going to do that,” said Williams. “Duke wants to buy the power, and we’re an Indiana company that happened to be successful with our proposal to go there.”

Inovateus Solar LLC formed in 2008, evolving from its green building roots. Founder Tom Kanczuzewski learned about solar technology from George Howard, Ph.D. and renewable energy pioneer Stan Ovshinsky and built the business into one of the nation’s top providers of solar energy. The company is based in South Bend, Ind.

“We’ve been in the business for an eternity in solar years,” said Williams. “We started designing LEED-certified green homes and naturally moved into solar as the housing market tanked. Now, it is our bread and butter.”

Williams explained that the farm will produce direct current wattage, as opposed to alternating current, which means that 6.5 megawatts of energy will be produced in Kokomo annually. Inovateus does this because there are very few times that the farm will hit peak output each year.

Williams estimates that the farm will utilize about 21,000 solar panels to capture and convert energy. The panels will be mounted to a single-axis tracking system which allows them to follow the sun’s path throughout the day.

“This increases the yield substantially, which counteracts the lower solar yield in the state,” said Williams.

According to city engineer Carey Stranahan, the city will lease the land to Inovateus, as it was the only company to respond to a request for proposals in December. The Kokomo Board of Works and Public Safety is expected to consider approval of the project at its Jan. 21 meeting.

The Kokomo Common Council also will consider the lease, as the proceeds from the transaction are expected to exceed $25,000.

“The project allows the Continental Steel Main Plan Site to be put back into productive reuse,” said Stranahan. “The site has limited redevelopment opportunities due to its compromised environmental situation.

“IDEM has been notified of the project, and will be approving the redevelopment plan. The lessee will be responsible to maintain the protective cap on the site, as well as maintain the vegetation and improvements.”

Williams explained that the steel piles anchoring the solar panels will penetrate the 18-inch soil cap placed over the contaminated ground, but no soil will be removed. There will be no digging, grading, or installation of cement footers which would require exposure to the contamination.

“We’ve managed to avoid that,” said Williams.

Skeptics of solar energy might wonder why Indiana is considered a good place for a solar farm, as the state experiences fewer than 60 days of full sun each year. Williams countered that clear, sunny skies are not a necessity for a successful solar farm.

“Overall, we have four and a half sun hours per day on average,” said Williams. “We’ll produce at a point high enough to deliver energy to Duke. It’s not bad, considering that 30-40 percent of Germany’s energy is renewable, and they have about 3.7 sun hours a day. We’re sunnier than a place that has a heck of a lot of solar.

“The key is technology has improved. We’ve simplified it. It’s steel in the ground and a few silicon modules. That makes it cost-effective. And you’re pre-paying for energy for 20-30 years. The costs are up-front, but you can say the same thing about a new oil refinery. And we have no fuel costs and almost no maintenance. The combination of labor efficiency and materials at a low cost makes it work now.

“Sure, it makes sense in sunny places like Arizona or in New Jersey where there are a lot of subsidies. But now it is starting to make sense in places people didn’t expect, and Indiana is one of them.”

Inovateus anticipates that once regulators approve the project, it will take the company three to five months to construct the solar farm. Williams said the operational target for the farm is December, but the company is confident that it could begin operations as early as October.

Indiana Governor Pence Says: “Indiana is a Pro Coal State…”

Posted by Laura Arnold / January 13, 2015 / Posted in Uncategorized / No Comments

Did you miss Indiana Governor Mike Pence's State of the State address tonight?

I just found a website link where you can both watch and/or read a transcript of the Governor's remarks.

See http://www.c-span.org/video/?323751-1/indiana-governor-mike-pence-r-state-state-address

Not much on energy except for this:

OVER THE PAST TWO YEARS WE'VE MADE LOTS OF PROGRESS, GREAT PROGRESS CUTTING TAXES. NOW IN THIS SESSION, LET'S CONTINUE THE WORK BY SIMPLIFYING THE TAX CODE AND TAKE STEPS TO PREVENT A RAPID INCREASE OF PROPERTY TAXES ON INDIANA'S FAMILY FARMERS.

AND LET'S REMEMBER THAT LOW COST ENERGY IS VITAL TO OUR ECONOMY, WE NEED AN ALL OF THE ABOVE ENERGY STRATEGY, INCLUDING ENERGY EFFICIENCY AND KNOW THIS, INDIANA IS A PRO COAL STATE AND WE WILL CONTINUE TO FIGHT AGAINST THE EPA UNTIL WE BRING THIS WAR ON COAL TO AN END. [emphasis added]

That's all folks when it comes to his remarks about energy.