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On Thursday, March 27, 2014, the California Public Utilities Commission established rules for transitioning distributed generation renewable energy systems from the current net energy metering  (NEM) arrangement to the successor tariff which will be adopted by the CPUC in 2015.

The decision, D.14-03-041, was mandated by last year’s passage of AB 327, requiring implementation of changes to California’s NEM program by 2017.  AB 327 specifically directed the CPUC to establish a transition period for “pre-existing” systems based on a “reasonable expected payback period” and other factors consistent with California’s policy to promote the use of renewable energy.  Under the legislation, systems installed prior to the earlier of July 1, 2017, or the date upon which the customer’s utility reaches the 5% cap on its capacity subject to the net metering tariff, would be eligible for the transition period.   

The CPUC decided that 20 years from the date of installation (interconnection) would be the transition period for pre-existing systems.   The adopted period is longer than advocated by the utilities and certain ratepayer organizations and shorter than urged by some members of the solar industry and local governments.  The Commission also rejected arguments that customers installing systems after adoption of the transition rule should have shorter transition periods on the theory that they had notice of the coming change in tariffs and therefore could not have had reasonable expectations of more lengthy “payback” periods.  …

Continue Reading CPUC Adopts Transitional Net Metering Rules for Pre-Existing Distributed Generation Systems

After the years of inconclusive resource planning, months of contested case proceedings, and days of oral argument, discussion and review that led to today’s deliberations, the Minnesota Public Utilities Commission (“Commission”) unanimously decided not to decide. The ultimate question before the Commission was what capacity needs had been determined in the record and what should…

Yesterday afternoon, the Minnesota Public Utilities Commission approved the methodology for calculating value of solar (VOS) tariffs in Minnesota as developed by the Department of Commerce. In doing so, Minnesota became the first in the nation to adopt a VOS tariff methodology.

The Commission was required by statute to take action on the VOS calculation methodology by the end of the month. It had three options: to approve it as proposed, reject it, or approve it with modifications and with the consent of the Department. For background on the Department’s January 31st recommendation, see our blog posts here and here. The Department subsequently included several modifications affecting the fuel price escalation factor, the avoided distribution capacity cost, and the environmental cost categories.

In its ruling, the Commission approved the Department’s methodology, as amended, by a 3-2 vote.…

Continue Reading Value of Solar Achieves a New Dawn in Minnesota

Final comments were filed yesterday on the proposed methodology for calculating a value of solar (VOS) rate for utilities in Minnesota (more on the proposed methodology is here). With the Commission required to make a decision within 60 days of January 31, 2014, parties remain in fairly wide disagreement about what is required by statute, particularly what values are truly “known and measurable” and whether the value calculation or proposition applies to the particular utility or more broadly to society. Depending on the interpretation of these factors among others, the estimated  VOS rate could vary from half of that suggested by the Department’s original $0.135/kWh example to something considerably higher. The rate would eventually apply to Xcel’s Community Solar Garden (CSG) Program and potentially as an alternative to net-metering arrangements for projects under 1MW. In a separate proceeding yesterday, the Commission set interim rates for the CSG program that could be even higher with a placeholder SREC value included (more on that in a separate blog).
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Continue Reading Viewpoints Diverge on the Value of Solar in Minnesota

by Sara Bergan and Sarah Johnson Phillips

In May 2013, the Minnesota Legislature passed legislation that, among other things, set a solar standard, directed Xcel Energy to develop a community solar garden program, and provided for the development of an alternative tariff mechanism to net metering that would also serve as the rate for community solar garden programs. Under this new scenario and instead of traditional net-metering arrangements, customers would potentially buy all of their electricity from their local distribution utility and then sell all of their PV generation under that utility’s Value of Solar (VOS) tariff which would be designed to capture the societal value of PV-generated electricity.

The legislation directed the Department of Commerce to work with stakeholders to develop a VOS methodology and to deliver its recommendations to the Minnesota Public Utilities Commission (Commission) on Friday, January 31, 2014.  The Department’s filing today includes its recommendation, with a more in-depth document addressing the methodology.  The  Department’s recommendations do not set a rate, but rather propose the methodology for calculating a utility-specific rate for distributed PV solar (1 MW and smaller). If the Department’s sample calculation is any indicator of what’s to come, however, the value went from $0.126/kWh in its initial draft to $0.135/kWh in the documents filed this morning.…

Continue Reading What is the Value of Solar? Minnesota Agency Starts to Answer. . .

At the close of last year, Minnesota Administrative Law Judge Eric Lipman determined that the single solar proposal in a competitive resource acquisition process would provide the best value to Xcel ratepayers (see more here). Key to his decision was his conclusion that Xcel’s capacity needs in the timeframe considered were uncertain and potentially…

Update: Initial exceptions to this ruling are due on January 21, 2014, see attached scheduling notice.

On December 31, 2013, Minnesota Administrative Law Judge Eric Lipman determined in a competitive bidding process that solar provided greater value to ratepayers than natural gas. In a first-ever competitive bidding process under Minn. Stat. §216B.2422, subd. 5, 4 bidders competed directly with Xcel Energy’s own natural gas proposal to fill an increasingly uncertain future need for capacity resources.  If the Minnesota Public Utilities Commission (the “Commission”) agrees with Judge Lipman, Edina-based Geronimo Energy will build 100 MW of solar energy across 20 different sites in rural Minnesota and additional procurement would be put off until better information is available for the timeframe beyond 2019.…

Continue Reading Minnesota Judge Rules Solar Provides Best Value for Ratepayers