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IURC Hearing Held on Morton Solar Complaint Against Vectren; CAC asks for changes in Interconnection Rules

Posted by Laura Arnold / May 25, 2014 / Posted in solar, Uncategorized / No Comments

Indiana consumer groups hope utility hearing will streamline alternate energy regulations

By Chelsea Schneider

Posted May 22, 2014 at 6:56 p.m., updated May 22, 2014 at 7:22 p.m.

INDIANAPOLIS — Consumer advocacy groups want to see the process Hoosiers

have to follow to set up renewable generators, such as wind turbines or solar panels,

more streamlined.

They hope a complaint before the Indiana Utility Regulatory Commission by an

Evansville-based solar and small wind energy contractor will serve as the vehicle for

change.

State regulators conducted a hearing on a complaint filed in 2013 by Morton Solar on

Thursday but a ruling will be issued at a later date.

The complaint deals with allegations by Morton Solar that Vectren Corp. impeded its

customers' renewable energy projects by delaying interconnection agreements. The

agreements are issued as part of the process if a consumer wants to connect a wind

turbine or solar panel to the company's power grid.

Technology has advanced since the interconnection rules were established in 2006,

said Jennifer Washburn, an attorney for Citizens Action Coalition.

"It slows down the advancement of net metering and renewable generation and

customer generation," Washburn said, "and the ability of folks to lower their bills and

produce their own generation."

Vectren has approximately 60 customers in its net metering program, which offers

credits on a utility bill if a customer's renewable generator produces more electricity

than they need.

Robert Johnson, an attorney representing Morton Solar in the IURC complaint, said

he hopes the case helps customers seamlessly connect to Vectren's system and for

the utility to "overall become more based on homegrown renewable energy."

Vectren spokeswoman Chase Kelley said the company supports net metering and

the number of customers has grown consistently year over year.

"We have worked to enhance our customer communication and application process

and make it easier for customers to understand the requirements to engage in net

metering by posting all materials online and allowing forms to be completed and

submitted electronically," Kelley said.

Kelley said the hearing also showed Vectren wasn't attempting to delay or deter

customers from utilizing net metering.

"All customers who have applied and met the requirements, including the small

handful that were part of this case, had and continue to have active net metering

service and are receiving the benefits," Kelley said.

At the hearing, Johnson questioned Tom Bailey, Vectren's director of sales, on

whether renewable energy hurt the company's profits. Bailey said while "revenue

would be reduced," the less energy Vectren sells, he acknowledged the momentum

toward solar energy seen in the past decade.

"I think it's going to be a part of the resources going forward, and so personally, no, I

don't think it is troubling, I think we'll have to learn to adapt," Bailey said.

Morton Solar owner, Brad Morton, said it was "mandatory" for the survival of his

company to have a good relationship with Vectren. Morton — who has handled a bulk

of Vectren's net metering clients — said since he filed the complaint with the IURC,

the process required for interconnections has improved.

Bailey said before April 2013, Vectren had a process with Morton the company had

hoped would lead to efficiencies. However, Bailey said, at times, the company found

documents that were either misplaced on Vectren's side or where signatures couldn't

be found.

Bailey said the company worked to remedy the situation and reinstituted a process

that clearly follows the state's interconnection rules. In testimony submitted to the

commission, Vectren says it issued interconnection agreements to the customers

Morton Solar named in the complaint, though the company admits to misplacing the

application of one customer.

Those agreements are necessary for Morton Solar to sell solar renewable energy

credits for its customers. Those credits are generated by the energy savings of a

project and the ability to sell the credits can be vital to a project being implemented.

Consumer advocates also raised the issue of renewable energy customers having to

purchase external disconnect switches. Those switches stop the flow of electricity

from the generator back to the grid. Vectren no longer requires those switches, which

cost about $500, for projects that generate less than 10 kilowatts.

However Vectren engineer Jim Cox said at the hearing those switches have

advantages.

"In the event of the failure of a wind-type system the customer could disconnect the

alternate source of energy and be supplied directly from Vectren," Cox said.

Court of Appeals says: “FERC went far beyond removing barriers to demand response resources.”

Posted by Laura Arnold / May 25, 2014 / Posted in Uncategorized / No Comments

GREEN TECH 5/24/2014 @ 11:56AM 286 views

The Winners In FERC's Demand Response Ruling: Batteries and Software, Not Utilities

A three-judge panel tossed out a rule promulgated by the Federal Energy Regulatory Commission that has been instrumental in reducing peak power consumption on a nationwide basis.

And, while supporters and critics agree that the decision is a setback for demand response providers and a boon for utilities, the setback may prove to be only temporary. In fact, the biggest beneficiaries could be the developers of energy storage systems and building management software that effectively accomplish what demand response programs do without the regulatory overhead.

Demand response is the clunky term for one of the biggest innovations in the power industry in the last several decades. Under demand response programs, utilities contract with a third party provider to get end-users to turn down their power during hot summer days when a power outage looms. For many utilities, it’s cheaper than trying to buy power on the spot market. End-users like it because they get a pretty sizeable payment every month for agreeing inching down their thermostat a couple of degrees. Over time, demand response programs can also help utilities reduce the number of emergency power plants they have to build.

EnerNoc, one of the pioneers of demand response, had quite a bit of difficulty getting investors when they founded the company. But since then, EnerNoc has gone public, many other companies have developed demand response offerings, and the concept has been adopted in China, Japan, Australia, Europe and elsewhere. It’s truly an American success story started by two guys with a phone.

In 2011, FERC further expanded the market for demand response with Rule 745, which essentially said that people who reduced power consumption under demand response programs would get paid as much as utilities would get for supplying power. If a utility charged 8 cents a kilowatt hour, for instance, a company or possibly a homeowner could get paid the same amount for turning down their lights. Wal-Mart, Alcoa came out in support of Rule 745 when it came out because it would potentially save millions.

The court, in a 2-1 decision, said that Rule 745 encroached on the power of state utility boards to regulate power prices. It also failed to take into account the cost of transmission lines and other infrastructure set up by utilities.

“FERC went far beyond removing barriers to demand response resources. Instead of simply ‘removing barriers,’ the rule draws demand response resources into the market and then dictates the compensation providers of such resources must receive,” the court stated.

Critics fear that the decision will make demand response less attractive and hence curb its growth.

The court’s decision, however, does not regulate two very important factors: spite and technology. First, spite. Large power consumers hate demand charges, those supplemental fees tacked onto utility bills to cover their potential peak power consumption. Demand charges can account for 20% or more of a monthly power bill.

Second, technology. Battery systems and software can be used to automate peak power reduction. The Mark Hopkins Hotel, for instance, is using a system from Stem to help reduced its monthly demand charges of $30,000. Sustainability measures like this now account for 7% of the hotel chain’s profit, according to Harry Hobbs, area director for engineering.

The best part about these systems for regulating power building-by-building is that you really don’t need regulatory approval. You can just install them. The disadvantage is that you can’t guarantee consistent savings across the board in an emergency. In a weird way, utilities may be in a worse position if these individual systems take off in the setback for demand response because they will have to still prepare for peak power events, but they won’t be selling as much power.

The decision could also further galvanize support for the overhaul of the utility business model. Critics are no doubt going to point out that their rates of return are regulated. In Florida, utilities can charge consumers monthly fees for nuclear power facilities that may never get built. As Nat Goldhaber, managing director of Claremont Creek Ventures likes to say, there is no such thing as a free market for energy. The prices are always somehow regulated. Why should they get guaranteed returns on their capital projects, critics will ask, but we can’t get technology that helps us reduce the need for those power plants?

Very soon, you could see Wal-Mart, the Sierra Club, car makers and virtually every employer in a region standing on one side of the aisle during hearings on electricity rates and utilities standing all alone on the other.

It will be kind of lonely.

Editor's Note:

Here is what the Court said:

Electric Power Supply Association and four other energy industry associations (“Petitioners”) petition this court for review of a final rule by the Federal Energy Regulatory Commission (“FERC” or “the Commission”) governing what FERC calls “demand response resources in the wholesale energy market.” The rule seeks to incentivize retail customers to reduce electricity consumption when economically efficient. Petitioners complain FERC’s new rule goes too far, encroaching on the states’ exclusive jurisdiction to regulate the retail market. We agree and vacate the rule in its entirety.

Download the order HERE> 11-1486-1494281_Appeal of FERC Order 745

Court Overturns FERC Order 745 on Demand Response Payments; What’s the impact on status of “negawatts”?

Posted by Laura Arnold / May 25, 2014 / Posted in Uncategorized / No Comments

Appeals Court Throws Out Energy Saving Rule

Ruling is a Blow to Electricity Conservation Efforts

REBECCA SMITH

CONNECT

May 23, 2014 5:36 p.m. ET

A federal appeals court dealt a blow to electricity-conservation efforts on Friday when it struck down a rule allowing big energy consumers to reap special payments in exchange for cutting their power use.

The D.C. Circuit Court of Appeals nullified a 2011 order by the Federal Energy Regulatory Commission that promoted paying businesses to reduce electricity consumption during heavy times of demand. The court ruled that as a federal regulator FERC had gone too far, encroaching in retail electricity markets that are under the exclusive jurisdiction of states.

The FERC order was considered integral to federal efforts to curb carbon emissions from power plants and support energy-efficiency investments by big consumers, from grocery store chains to aluminum manufacturers. But electricity suppliers struggling against low power prices and lackluster demand said those payments had become excessive.

The Electric Power Supply Association filed the lawsuit on behalf of power generators that sell electricity into wholesale markets regulated by FERC. The group's executive director John Shelk praised the court's ruling, saying it "vindicates what we and so many others said about this ill-advised order all along."

There is a proper role for demand response programs, but it must be compensated appropriately, Mr. Shelk said.

While the court ruling doesn't eliminate these programs, it is expected to significantly reduce the size of payments many participants receive. Lower payments will discourage customers from investing in automated equipment that help control and reduce energy use.

A FERC spokeswoman said the agency is reviewing the decision and considering next steps.

The rule vacated on Friday--Order 745—was intended to give energy consumers equal standing with power generators in deregulated wholesale energy markets.

When a company uses power, the units of electricity are measured in megawatts. In recent years, federal officials have tried to create legal standing for so-called "negawatts." It is a way to quantify and give a market value to electricity that conservation-minded businesses didn't pull off the power grid during times of peak energy demand.

With FERC's blessing, companies like publicly traded EnerNOC Inc. ENOC -0.49% have proliferated, rounding up companies and industrial users willing to slash their power consumption in exchange for special payments. FERC's order boosted the size of the negawatt payouts.

If negawatts are offered at a lower price than actual megawatts of electricity, market officials can use them as a resource to satisfy the grid's electricity needs. Power generators called that system unfair. They need to run actual power plants to participate the market, while it doesn't cost an energy consumer anything to forego power use, they argued.

Although the court didn't directly rule on negawatt prices paid to consumers, it said payments looked like a "potential windfall" for allowing customers to collect sums of money comparable to what electricity generators get for actually providing power, which the court inferred had a higher value.

Experts called the ruling a huge setback for consumers and energy conservation.

John Moore, senior attorney for the Natural Resources Defense Council in Chicago, said the FERC order gave energy consumers clout in markets that historically have been dominated by power generators.

Jon Wellinghoff, who was chairman of FERC when the order was created, said he was surprised by the court and the impact will be felt by customers. "We didn't believe it would go this way," he said.

Write to Rebecca Smith at rebecca.smith@wsj.com

U.S. Virgin Islands (USVI) enacts Feed-in Tariff (FIT); Check out the details!

Posted by Laura Arnold / May 23, 2014 / Posted in Feed-in Tariffs (FiT) / No Comments

FIT Act presents huge opportunity for Virgin Islands

May 21, 2014 | By Barbara Vergetis Lundin

U.S. Virgin Islands (USVI) Governor John deJongh has signed the Feed-In-Tariff (FIT) Act into law, allowing residents to build renewable energy projects and sell all of the electricity to the local utility.

U.S. Virgin Islands. Credit: NASA Earth Observatory

Currently, the USVI is almost entirely dependent on imported fossil fuels and retail electric rates average over $0.50 per kilowatt-hour. Through the feed-in tariff, the Water and Power Authority (WAPA) will purchase up to 15 MW of local renewables, paying less than WAPA's avoided wholesale cost at around $0.26 per kilowatt-hour. Renewable energy generators will enter a power purchase agreement with WAPA lasting between 10 and 30 years.

While the feed-in tariff marks a significant step toward cleaner, more affordable and more reliable power on the USVI, Craig Barshinger, a USVI Senator and author of the Feed-In Tariff Act, believes this is just the beginning in a larger effort to modernize the USVI's power grid.

"Now that WAPA has adopted a cooperative stance, energy storage and grid stabilization come next," he said.Craig Lewis, executive director of the nonprofit Clean Coalition, has made multiple visits to the USVI to lay the groundwork for a community microgrid on the island of St. John, which is designed to use local renewables to provide at least 25 percent of the total electric energy consumed on the island while at least maintaining power quality and significantly improving grid reliability and resilience"The opportunity for the Virgin Islands is clear -- local renewables provide cheaper power and robust economic stimulation, including local job creation and private investment," said Lewis. "Now, the feed-in tariff can initiate a real deployment effort of renewables in the Virgin Islands and a community microgrid project can show the way for maximizing the benefits of getting to significant levels of local renewables."For more:
- see this order

Delay on Ohio SB 310 action in House; Compromise proposed

Posted by Laura Arnold / May 22, 2014 / Posted in Uncategorized / No Comments

Ohio Senate Bill 310 derailed; coalition favoring efficiency and renewable energy proposes another compromise

By John Funk, The Plain Dealer Follow on Twitter
on May 21, 2014 at 3:40 PM, updated May 21, 2014 at 9:33 PM

COLUMBUS, Ohio -- A new coalition of business, industrial and consumer groups is proposing a compromise to end the stalemate on the controversial legislation that would freeze Ohio's renewable energy and efficiency laws for two years.

The group is suggesting a one-year freeze on the efficiency and renewable standards that have increased annually since 2008, and a cost cap that would protect small business and consumers from increases in bills to pay for efficiency programs.

The compromise proposal comes on the heels of what appears to be chaos among House Republicans whose majority caucus on Tuesday ended with Speaker William Batchelder declaring there were not enough votes to pass the legislation, known as Senate Bill 310.

Some members wanted to know why there is a rush. Leadership in both chambers has been working to have legislation approved and on the governor's desk before summer break in early June. The House only received the bill on May 8 and has held only a handful of hearings. The Senate debated the issue for months, with an original bill ending in a failure to muster sufficient votes.

The House caucus included an unusual appearance from Sen. William Seitz, the Cincinnati Republican and chair of the Senate public utilities committee, and an outspoken critic of the 2008 law that has required utilities to use an annually increasing amount of renewable energy while simultaneously developing programs to help customers use less energy through efficiency upgrades.

Sen. Troy Balderson, a Zanesville Republican and primary sponsor of the bill, also addressed the caucus, telling representatives what he told the House utilities committee earlier -- that the bill would be changed to make sure utilities could not substitute Canadian hydro power for closer wind and solar power.

"That was definitely a mistake that did not mean to be put into the bill," Balderson told a reporter in an interview on Wednesday.

A shorter freeze to study the standards will create less disruption.

The compromise would also allow heavy industry to escape the efficiency standards on Jan. 1, 2015 -- if they agree to bid their efficiency gains into an annual auction by the company that manages the grid in Ohio and 12 other states.

Because efficiency upgrades reduce demand -- and therefore power prices, the coalition argues that if formally bid, the efficiency gains will help consumers and small businesses by keeping prices lower.

"A shorter freeze to study the standards will create less disruption in Ohio's emerging clean energy industry and will allow the state to develop the best path forward sooner rather than later," said Dayna Baird Payne, spokeswoman for the American Wind Energy Association, in a statement accompanying the proposal.

The proposed compromise follows a day of heavy lobbying at the State House by utility representatives, several of whom were seen entering Speaker Batchelder's office. It comes after two news conferences, one by two Northeast Ohio Democratic House members and one by a coalition of religious groups who appealed to Gov. John Kasich and lawmakers to leave the current laws intact.

State Reps. Mike Foley, a Cleveland Democrat, and Robert Hagan, a Youngstown Democrat, quoting a document submitted to state regulators by FirstEnergy Corp., said the efficiency standards in place since 2009 helped consumers save $2 for every $1 spent on efficiency programs.

"There is a reason GOP lawmakers are thinking twice about moving this bill," said Rep. Hagan. "Instead of continuing to focus on a rapidly developing sector of our economy, this bill amounts to a big handout to utility companies at the expense of Ohio consumers and businesses. Ohioans are seeing this 310 for what it really is -- a political favor that benefits a few wealthy, well-connected political supporters at a substantial cost for the rest of us."

Foley said the bill, as currently written, would move Ohio backwards as other states and nations continue efficiency and renewable programs.

"This isn't just a handout to big energy corporations, but it's a handout to surrounding states and other countries that will see more advanced energy business because Ohio wants to move backwards," said Rep. Foley.

One of the members of the coalition supporting the compromise, Ohio Advanced Energy Economy, earlier this week began airing a 30-second ad on television and over the Internet in defense of keeping the standards as they are and urging viewers to call their lawmakers in protest to keep the state from returning to "the Rust Belt."

Balderson said he had no problems with the attack ad.

"They're allowed to run opposition, and that's fine. They're expressing their views and they're expressing their opinions.

"I understand what they're doing. I don't necessarily always agree with it, but I understand, and I respect that they're doing."

But he doubted the passage of the bill would return Ohio's economy to rust belt conditions.

"This bill is a freeze - it's a temporary freeze, and it's two years," he said. "After that two years is up, it's going to restart again in 2017 if the legislature does not come back with an answer of ideas of something."

Jeremy Pelzer of Northeast Ohio Media Group contributed to this story.