Utah's Salt Lake County Will Announce a Solar Project RFP on May 14, 2010
On May 14, 2010, Salt Lake County, Utah will be releasing a Request for Proposals (“RFP”) for a 1 MW solar project. If your company is interested in receiving the RFP as soon as it is released, you should register with BidSync (registration is free).
About the Solar Project:
It is anticipated that the initial solar project will include three County facilities (Salt Palace Convention Center, Environmental Health, and the Riverton Senior Center) with solar installations totaling approximately 1 MW. This solar project will utilize a power purchase agreement (“PPA”) financing model. It will also employ public and private capital, Federal grants, and public/private subsidized bonds that are able to work together efficiently because of the recent Stimulus Bill. The project also makes use of recent changes to Federal tax rules, and the recent re-awakening of private capital markets that make a significant public-private partnership possible. The County is working to coordinate these financial resources to make them easily accessible. More details will be available in the RFP. Longer term, Salt Lake County Mayor Peter Corroon has set a goal to install 10 MW of solar on as many county-owned facilities as possible.
PPAs and Third-Party Financing Now an Option in Utah:
In 2010, with the passage of HB 145 – Renewable Energy Financing Provisions, Utah enabled third-party financing of renewable energy systems for the following entities: a county, municipality, city, town, other political subdivision, local district, special service district, state institution of higher education, school district, charter school, or any entity within the state system of public education; an entity qualifying as a charitable organization under 26 U.S.C. Sec. 501(c)(3) operated for religious, charitable, or educational purposes that is exempt from federal income tax and able to demonstrate its tax-exempt status. Significantly, this recent legislation clarified that certain third-party financing arrangements are exempt from regulation by the Utah Public Service Commission, which is consistent with how these arrangements are viewed in several other states across the country. This clarification will now open the door for more innovative financing for renewable energy technologies, which has the ability to remove the upfront cost hurdles of capital intensive investments and offer an attractive bundle of services, including: design, installation, financing (including monetizing tax benefits), permitting and interconnection, maintenance, etc.
Net Metering Changes in Utah - A Victory for Renewable Energy in Utah
The following changes to Rocky Mountain Power’s (RMP) Net Metering Tariff went into effect April 1, 2009, based on the Public Service Commission’s (PSC) ruling in February 12, 2009:
- Total System Capacity set at 20% of RMP’s 2007 peak demand (equivalent to 923,000 kW or 923 MW).
- All Renewable Energy Credits (RECs) are owned by the customer, or as otherwise designated by the customer.
- Residential customers will receive kilowatt-hour credits for any excess generation they produce.
- Large commercial and industrial customers with demand charges that generate excess generation will be given a choice between:
- Valuing excess generation at an avoided cost based rate (schedule 37), available as a choice between a blended (yearly average) rate or seasonally differentiated rates,
-- OR -- - Valuing excess generation at an alternative rate calculated by dividing Rocky Mountain Power’s Utah revenue per schedule (applicable to the net metering customer) by the schedule’s corresponding kilowatt-hours usage data from the previous year’s FERC Form No. 1.
- Valuing excess generation at an avoided cost based rate (schedule 37), available as a choice between a blended (yearly average) rate or seasonally differentiated rates,
- Annual Net Metering Report Requirements: The PSC directs RMP to submit an annual net metering report that includes the number of Utah net metering installations, the respective individual capacity of each installation, the total capacity of the Utah customer-generation as of the end of the annualized billing period, and any unforeseen problems or barriers in the tariff, and any other relevant measure showing how close the program is to the designated net metering cap.
- Customer classification: The PSC determined that the following customer classes will be used to implement the aforementioned changes:
- Residential: all residential schedules
- Small Commercial: Schedule No. 23 and Schedule No. 23B – General Service – Demand Time-of-Day – Distribution Voltage
- Large Commercial: Schedules Nos. 6, 6A – General Service – Energy Time-of-Day Option, 6B – General Service – Demand Time-of-Day Option, Schedule 8, and Schedule No. 10 – Irrigation and Soil Drainage Pumping Power Service
- Minimum Bill Fee: The PSC found it reasonable to apply the minimum bill to net metering customers who provide net excess generation.
2009 Utah Legislation Sets Stage for More Renewable Energy in Utah
Legislators recently adopted legislation aimed at helping Utah stay competitive with surrounding states in the fast growing national clean energy movement. Five (5) bills dealing with renewable energy and energy efficiency passed with strong bi-partisan support. Three (3) resolutions, while non-binding, send strong messages to local governments and utilities that the legislature encourages, and wants to remove barriers to, renewable energy and energy efficiency across all sectors. The success of the 2009 legislative session indicate that renewable energy will play critical roles in Utah’s future.
House Bill 430 - Economic Development Incentives for Alternative Energy Projects, is designed to attract new clean energy industries and projects to Utah. The bill allows the Governor’s Office of Economic Development (GOED) to establish energy development zones and offer tax credits to companies and projects located in those zones.
Senate Bill 76 SO3- Energy Amendments, address the barriers to renewable energy transmission by creating a political subdivision of the State tasked with the development of a master plan for renewable energy production and transmission infrastructure. This subdivision will have the ability to apply for and seek out federal grants, as well as bonding authority to pay for transmission lines for renewable energy.
Senate Joint Resolution 1 S02 Renewable Energy System, urges the Utah State Energy Program and municipal governments to collaborate on the development of model renewable energy ordinances to streamline the development process at the local government level.
Senate Joint Resolution 10 - Alternative Training Center, recognizes the need to train the growing clean energy workforce in Utah. The bill supports the establishment of an Alternative Energy Training Center in Beaver County, an area with high concentration of existing, upcoming and potential renewable energy development.
House Joint Resolution 9 - Effective Energy Efficiency and Utility Demand Side Management, recognizes energy efficiency as a priority resource and urges state and local governments and utilities to promote and encourage all available cost-effective energy efficiency and conservation, setting voluntary energy savings goals for Rocky Mountain Power and Questar Gas and expresses support for regulatory mechanisms that remove disincentives to utility energy efficiency and conservation.
Utah PSC Revises Net-Metering Policy Creating New Incentives for Solar and Wind Energy
Renewable energy supporters in Utah are cheering a recent order which will make renewable energy systems such as wind turbines and solar panels more cost effective for consumers.
On February 12, 2009, the Utah Public Service Commission issued an order revising the Rocky Mountain Power net metering policy. In the past customers who own renewable-energy facilities were credited for excess generation based on an avoided-cost calculation, which results in a low financial benefit to the customer. The new net-metering policy provides a "full retail" or dollar-for-dollar credit for every kilowatt-hour of excess power generation, creating a much greater incentive for renewable-energy production by residential, commercial and industrial consumers. In addition, the order declared that renewable energy certificates shall be "deemed owned by the net-metering customer or as otherwise agreed to or designated by the net-metering customer." The PSC order will become effective on April 1, 2009.
Salt Lake County Mayor Peter Corroon and Salt Lake City Mayor Ralph Becker, both supporters of renewable energy and this net-metering policy change, are reportedly investigating ways to promote investment in solar power in the region having jointly received a Solar America grant from the U.S. Department of Energy.
Utah Legislation Addresses Definition of Independent Power Production Facility
Last year, we reported on Utah Public Service Commission decisions regarding the need for the Milford Wind Power Project to obtain a certificate of convenience and necessity. Ultimately, the Commission ruled that the Project’s 90-mile transmission line connecting the wind farm to a point of interconnection at the Intermountain Power Project generating station was not part of the power production facility and was therefore not excluded from Commission jurisdiction. Docket No. 08-2490-01, Order on Petition for Rehearing, July 2, 2008. Thus, Milford Wind was required to obtain a certificate of convenience and necessity for the transmission line. In an apparent attempt to avoid that type of result in the future, the Utah Legislature is considering a bill that adds a definition of “generation facility” to the Public Utilities Code, providing that “’Generation facility’ means all electric plant used for the production or generation of electricity, including all electric plant used to interconnect the production or generation plant.” S.B 76. The bill also then uses that term “generation facility” in the definition of “independent power production facility,” and through other definitions, exemption from Commission jurisdiction is provided for such facilities.
