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Within days of its open on December 12, 2014, Xcel Energy’s Minnesota Community Solar Garden (CSG) Program had well over 300 MW worth of CSG applications submitted and by this writing nearly 430 MW.  The rush of significant application creates a question of “who’s in line first?”  That was the question before the Minnesota Public Utilities Commission (Commission) today.

As noted in our prior coverage, the Commission instructed the program to be “first-ready, first-served” and laid out specific instructions on the steps developers would need to take to complete applications and develop a garden in compliance with the program. These instructions were the result of substantial deliberation with interested parties and reflected in Xcel’s shiny new Tariff Section 9 governing the CSG Program.  The problem, however, is that any CSG  needs to interconnect to Xcel’s distribution system, and that process is governed by Xcel’s existing Tariff Section 10.  The interplay of these two tariff sections complicates the “who’s in line first?” issue by adding the question “which line?” Importantly, over 100 MW of applications destined for the CSG program were in line in the Section 10 interconnection queue before the CSG program opened last month.  A developer sought resolution of the two-queue issue from the Commission.

After considerable discussion, the Commission essentially decided the interconnection queue should follow the CSG program queue and directed as follows:

  • CSG applications will enter the appropriate Section 10 interconnection queue and be placed or reordered in this queue based on the date and time that Xcel determines the application to be complete under Section 9.
  • For any interconnection applications already studied that require additional engineering study due to changes in the interconnection queue positions, Xcel was directed to track the additional cost incurred by re-performing parts of the engineering study and bill applicants for the parts of the study that were required to be redone due to distribution system changes.

Although it was understandably difficult for the Commission to decide at what point an application should receive a spot in line, today’s decision vests more weight in Xcel’s completeness determination – previously a ministerial task.  Furthermore, the Commission left open how CSG developers that have invested money in furtherance of Section 10 interconnection applications will receive value for that investment if they move backwards in the Section 10 interconnection queue.

During deliberations the Commission also acknowledged that other issues are bound to percolate.  Stay tuned . . .

Yesterday, the Minnesota Public Utilities Commission (“MPUC”) approved Xcel Energy’s first Minnesota-based Community Solar Garden (CSG) program. After Xcel’s initial program filing was rejected by the MPUC in April, Xcel filed a revised CSG tariff with the MPUC in June. In a related filing, Xcel also argued that a  value of solar (“VOS”) rate for CSG projects was not in the public interest and applicable retail rates should be used for the program instead. The MPUC approved Xcel’s basic program, with relatively minor modifications and at the applicable retail rates. As a result, Xcel customers will soon be able to invest in a solar project without having to own a home or the perfect roof for solar.

Many of the details were already prescribed by statute (Minn. Stat.§ 216B.1641): 

  • Subscribers to a CSG will purchase one or more 200-watt subscriptions up to 120 percent of their energy load
  • CSG projects must include at least 5 subscribers with no single subscriber amounting to more than 40% of the total CSG capacity
  • Each CSG is to be no more than 1MW in size, but the program as a whole remains uncapped

The statute also requires that Xcel Energy purchase all of the energy output of a CSG system at a VOS rate once it is approved by the MPUC. Many interested parties have invested considerable time and resources into developing a way to calculate the costs and benefits distributed solar deliver to a utility, its customers and society (more on that process here, here and here). Last spring, the MPUC approved a final methodology to calculate VOS rates – the culmination of that work. Xcel’s CSG tariff filing was then the first test of the methodology and the CSG program its intended first application. 

Ultimately, the MPUC approved the use of the applicable retail rates instead of a VOS rate as Xcel requested. With parties diverging on the VOS rate itself as well as what, if any, additional incentive may be needed to make the projects financeable, the MPUC opted to spend more time getting any future VOS rate and associated incentive right. As that work continues, the program will go forward with the rate for immediate CSG projects being the applicable retail rate and an additional 2-3 cent adder for associated solar renewable energy certificates transferred to the utility. This amounts to rates from approximately 11.5¢/kWh for larger systems subscribed by commercial and industrial customers to 15¢/kWh for smaller systems subscribed by residential customers. 

Will such rates “reasonably allow for the creation, financing, and accessibility” of CSG projects under Minnesota law? One of these days, perhaps before the Harvest Moon, we will see whether Minnesota solar gardens are ready to sprout.

For more information, please contact Drew Moratzka or Sara Bergan.

After a full day of hearing arguments on Xcel’s proposed Community Solar Garden (CSG) program (see more on that here), the Minnesota Public Utilities Commission deliberated in public on the issue yesterday and made some important modifications to Xcel’s proposal. The program would allow Xcel customers to invest in off-site solar facilities and receive bill credit for their portion of generation. Ultimately that credit would be at the Value of Solar rate, but as parties await a decision on the Value of Solar (VOS) methodology (more on the VOS here), the Commission settled on an interim rate for the program (though its final vote on the matter is still forthcoming). It is largely based on average retail rates but importantly includes a placeholder value of any transferred Solar Renewable Energy Certificates (SRECs). A CSG developer could transfer the S-RECs to Xcel at a compensation rate of $.02/kWh for facilities with a capacity greater than 250 kW and at $.03/kWh for those with a capacity of 250 kW or less. The S-REC value is not intended to reflect a market rate and is intended and is intended to be strictly temporary, expiring upon the approval of Xcel’s VOS tariff.  Furthermore the rate and S-REC value are to be reviewed annually and adjusted if necessary.

The illustrative range of rates (assuming the SREC is transferred) is as follows:

Residential: $.14033 or $.15033

Small General: $.13738 or $.143738

General Service: $.11456 or $.12456

 

In addition, Xcel’s proposed 2.5 MW quarterly cap on the program was removed given the statute precludes a cap. While a final decision has not yet been issued by the Commission, newsmedia have already begun to report on it (see Star Tribune article here).

 

For more information contact: Sara Bergan, Sarah Johnson Phillips or Drew Moratzka.

After much anticipation, Xcel Energy submitted its petition for approval (PDF) of the company’s proposed community solar gardens program on September 30th. The program would give utility customers a new way to engage in solar generation without having to invest onsite. A solar garden is a “facility that generates electricity by means of a ground-mounted or roof-mounted solar photovoltaic device whereby subscribers receive a bill credit for the electricity generated in proportion to the size of their subscription.” Other required details of the program are set forth in Minnesota Statutes 216B.1641 and include:

  • each garden must also have at least 5 subscribers whereby no single subscriber has more than a 40 percent interest;
  • each subscription must be at least 200 watts and the total garden size cannot exceed 1 MW; and
  • each garden must be within Xcel’s service territory and its subscribers must be retail customers located in the same or contiguous county as the solar garden site.

While many of the details of the program are set forth by law, Xcel also clarified several procedural elements of its filing. For example, Xcel plans to take applications online on a first-come, first-served basis but limit the program to 2.5 MW per quarterly application period for the first two years of the program. A successful applicant would enter into a 20-year, fixed rate power purchase agreement with Xcel Energy.

Although the rate paid for the energy generated by a solar garden facility will eventually be the forthcoming Value of Solar rate, Xcel states that it is likely the solar gardens program will need to begin operations and issue bill credits before Xcel has a Value of Solar rate in place. For the interim period Xcel proposed to use a blended retail rate that differs by demand and non-demand class and by season. For no-demand metered service this would be just over $0.10/kWh and for demand metered service this would be just over $0.06/kWh, both with slight increases for the summer months. This price is expected to include the transfer of any and all solar renewable energy certificates generated by the garden to Xcel.

In early January, the Minnesota Department of Commerce shared new details about the state’s Low and Moderate-income Accessible Community Solar Garden program (the “Program”) application process and requirements. Among other features, the Program emphasizes subscribing low- and moderate-income (“LMI”) households and public interest organizations and establishes new consumer protection requirements. Applications for the Program will be submitted and reviewed in batches – starting February 1, 2024 – and new caps on project size and Program size will apply.

Continue Reading Minnesota Community Solar Garden Updates – New Program To Begin Accepting Applications

The Minnesota Court of Appeals filed its decision today affirming the Public Utilities Commission’s August 6, 2015 Order in the community solar garden proceeding, which adopted the partial settlement agreement between certain solar developers and Xcel Energy and decided several crucial aspects of Xcel’s community solar program, including the 5 MW cap on co-located gardens.  Sunrise Energy Ventures, LLC, a major developer in the community solar program, argued on appeal that the Commission engaged in improper and unlawful rulemaking, violated due process, and acted contrary to the Public Utility Regulatory Policies Act of 1978 (PURPA).

The Court of Appeals rejected each of Sunrise’s arguments. The Court found that the Commission had not engaged in rulemaking in its Order, but rather had made reasonable determinations consistent with the statute to modify the program in light of the “overwhelming response” of developers. The Court also found that the reservation letter between the developer and Xcel is not an enforceable contract and cannot serve as the basis for a substantive due process claim, and that the Commission did not violate Minnesota’s open-meeting law by taking a break to “talk to staff” and then immediately voting to adopt the co-location cap. Finally, the Court concluded that the Commission did not violate PURPA by allowing Xcel to refuse interconnection for a community solar garden that would require upgrades over $1 million, because Xcel’s Section 10 tariff already offers developers the ability to interconnect pursuant to PURPA.

Sunrise has 30 days to seek review of the decision from the Minnesota Supreme Court.

*Update: Xcel has now filed its revised tariff (pdf)

The Minnesota Public Utilities Commission published its Order (pdf) Tuesday approving Xcel Energy’s revised tariff for its Community Solar Garden Program contingent on certain changes being made. After Xcel Energy filed its tariff following programmatic changes made by the Commission earlier in the year, several parties objected to Xcel Energy’s interpretation. The Commission heard these arguments on November 19. As a result of decisions made during those deliberations, the Order:

  • Modifies Xcel’s definition of co-located community solar gardens (casting aside efforts to agree on a geographic safe-harbor),
  • Refines the material-upgrade limitation on interconnection,
  • Clarifies the standard to be applied by the Independent Engineer when resolving interconnection disputes,
  • Affirms the ability of cap-compliant projects to transfer their interconnection-queue positions, and
  • Requires Xcel to develop an exception process to allow projects to interconnect when possible before installation of telecommunications upgrades, which can have 12-15 month build-out timelines attached to them.

The Order requires that Xcel file its tariff reflecting the Commission’s changes by Friday, December 18.

Xcel Energy filed its December Report on the Community Solar Gardens Program this week, announcing that 13 projects totaling 43 MW have entered into the design and construction phase. Xcel also reports that it has received “few additional applications” since the spike in applications in September. There are currently 801 applications in the interconnection queue and 713 applications being reviewed for completeness. At this time, 47% of applications are pending completeness review stage, 50% are either being studied or waiting for payment, and 3% have moved into construction. The applications in the queue that are considered complete represent a total of 749 MW, and of that total 606 MW are considered compliant with the co-location size limit. The report also contains details relating to the tariffed timelines, including the fact that 50% of applications have advanced into the interconnection process within the 30-day timeline. The report explains that only projects that are first in queue receive a Statement of Work for an engineering study within the 15 day timeframe, and also that Xcel achieved its 90 working days target for completing the engineering study 95% of the time.

Community solar (“CSG”) is the topic of two articles we authored in the September editions of PV Magazine and Solar Industry Magazine. Titled “Care in the Community” (PV Magazine) and “Proof of Concept: Community Solar is Ready to Soar Despite Complications” (Solar Industry Mag), the articles consider the launch of The National Community Solar Partnership by the Department of Energy in July, ongoing wrangling over the definition of “community” and why the imposition of capacity caps on CSG programs is both inefficient and unnecessary.

Read more:

“Care in the Community” (PDF)

“Proof of Concept: Community Solar is Ready to Soar Despite Complications”

The Minnesota Public Utilities Commission today issued its long-awaited Order approving (with modifications) Xcel Energy’s Community Solar Garden (CSG) Program – Solar Rewards*Community.  The Order starts the clock for the program to open no later than 90 days from issuance of the Order (mid-December) and officially plows the furrow for community solar projects in Minnesota.  It is not, however, clear that Xcel Energy will have the luxury of using the full 90 days for opening its CSG program- the Minnesota CSG Statute requires Xcel Energy to begin crediting subscriber accounts for each CSG within 180 days of the CSG plan’s approval. Stay tuned for additional details.

Our prior blogs provide more details on the program. We review the details of the Order below.

Application: Once applicants file their applications and deposits, Xcel has 30 days to confirm the application is complete and then another 60 days to accept or reject the application. Applicants initially need to include:

  • Contact information,
  • Garden information including system location and specifications,
  • Application fee ($1,200) and deposit ($100/kW)
  • Engineering documents, including one-line diagrams, site plan, and Interconnection Application

Applicants will have a full 24 months from Xcel’s completeness determination to complete the project and comply with several additional requirements including: proof of site control, adequate insurance, projection of subscriptions, and signed interconnection and CSG agreements. Continue Reading Minnesota Community Solar Garden Program Approved, Set to Open