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Wisconsin Solar
‘Devastated’ By PSC

The Public Service Commission (PSC) of Wisconsin has orally approved plans by We Energies and Wisconsin Public Service - two of the state’s largest utilities - to impose increases on fixed customer charges as well as radically alter energy programs, such as net metering.

Under the utility proposals, customers will see increases in fixed monthly customer charges and decreases to per kilowatt-hour variable energy charges. In short, low-usage customers will receive higher bills, and large users will see reductions in their bills. The rate design changes also reduce customer incentives to save energy and invest in self-generation, such as net metering.

“Objectives, like good public policy and clean air, were completely ignored by the PSC,” says Michael Vickerman, program and policy director at advocacy group ReNew Wisconsin. “The effect on new residential solar will be nothing short of devastating.”

Particularly galling are the net-metering changes being imposed by We Energies, which serves about 40% of Wisconsin customers. The utility is changing the terms of service on its net-metering program to one that penalizes net generation - output above consumption - meaning the utility will pay customers less money for the solar output they send back to the grid.

“Basically, anytime the output exceeds consumption in a billing period each month, the effective rate will now be $.042/kWh, as opposed to nearly $.14/kWh,” Vickerman says. “Suddenly, net metering becomes a more expensive proposition for the customer.”

On top of increases to fixed charges, new net-metering customers will also be subject to a $3.80/kW per month capacity demand charge.

According to Vickerman, the charge stems from an assertion by We Energies that solar customers require additional grid services to generate power back to the grid. “The utility assumes these customers are underpaying for their use of the grid,” he says.

We Energies spokesperson Brian Manthey says that the PSC “took the necessary steps to send the appropriate electric price signals to all our customers.”

Further, Manthey explains, the increases only apply to new net-metering customers. The 500 to 600 customers currently participating in the plan will be exempt from the increases for 10 years.

By Vickerman’s estimate, the overall impact on solar energy is quite small: For every 5,044 kWh supplied by We Energies into Wisconsin, about 1 kWh comes from solar. Therefore, he says, the PSC’s increases are more about control than they are about actual costs.

“Welcome to Walker world,” he says, invoking the name of Gov. Scott Walker, Wisconsin’s controversial chief executive.

For industry advocates, such as Chicago-based Environmental Law & Policy Center, the PSC’s actions send the wrong signals to the energy marketplace.

“Energy efficiency and self-generation show a lot of promise in Wisconsin, and these rate design decisions move Wisconsin in the wrong direction,” says Bradley Klein, senior attorney. “The changes were not supported by facts in the record and send the wrong messages and price signals to customers.”

More broadly, Klein notes, the utility proposals and the commission’s decisions hurt all Wisconsin electric customers, not just solar customers, “because they reduce the customers’ control over their bills and make it harder to save money by saving electricity.”

More damning, however, is the message it sends to utilities.

“By ensuring cost recovery for utility sunk costs through fixed charges, the utility no longer has discipline to try to limit investment in generation, transmission and distribution infrastructure to reasonable and prudent levels,” Klein says.

- Mark Del Franco

 

Colorado PUC Rejects Xcel’s Solar*Connect

Solar sector advocates were pleased that the Colorado Public Utilities Commission (PUC) rejected a proposal by Xcel Energy to create community solar projects under its Solar*Connect program.

“It was one of the shortest deliberations I’ve seen - less than 20 minutes, and they were done!” says Richard Mignogna, founder of Renewable & Alternative Energy Management LLC and a former staff member of the Colorado PUC. “The chairman also seemed to send a message that he didn’t want to see this again until the next electric resource plan filing in 2015.”

Under the program, customers would pay to displace up to 100% of their previous year’s electricity usage with solar energy. Subscribers would pay a Solar*Connect charge and also receive a Solar*Connect credit. Xcel says the program would help people offset their demand with solar power even if they were not in a position to host a solar installation themselves.

Solar*Connect critics expressed concern that the program would amount to a sleight of billing, where the utility would be able to bill subscribers for more solar power than is actually produced, as was alleged during the Windsource program.

In general, opposition seemed to focus on the effect Solar*Connect would have on other solar programs with more direct solar stakeholder participation. Testimony against Xcel’s proposal cited a lack of need for the program under the existing solar renewable energy credit scheme, no consumer demand for the program and concerns that it would end up being subsidized by ratepayers more generally.

In a traditional community solar program, a developer - not a utility - builds a solar garden. Customers buy an interest, often marketed as a number of panels, so they can share in the bulk-purchasing power without having to build a solar array on their own property.

Mignogna says Solar*Connect also represents a potential conflict of interest in that Xcel would be collecting funds supporting renewable energy generation through a green pricing program that may be seen as a competitor to net-metering and community solar garden (virtual net-metering) programs.

According to Mignogna, the PUC commissioners’ objections to the Solar*Connect program boiled down to the following:

• The anticipated profits for the program were not specified;
• The program should be included in the 2015 ERP filing; and
• Approval of the program was premature, given that the PUC has not yet ruled on the net-metering policy.

“As usual, we’ll have to wait for the written decision, but I’ll be surprised if there is much more in it,” Mignogna says.

 

EPA Gets Earful On
Carbon Pollution Plan

The U.S. Environmental Protection Agency (EPA) received over 1.6 million comments on its proposed Clean Power Plan before the agency’s Dec. 1, 2014, deadline.

In June, the EPA released the plan, which aims to regulate carbon dioxide (CO2) emissions from existing U.S. power plants for the first time. In September, the agency decided to extend its public comment period by 45 days, citing a strong amount of interest.

According to Janet McCabe, acting assistant administrator of the EPA’s Office of Air and Radiation, that interest continued to grow.

In a Dec. 1 blog post, McCabe wrote, “Since June, we’ve met with well over 300 groups and received more than 1.6 million comments; and that’s not counting the hundreds of thousands of comments that came in last week and those that are coming in today. Each commenter has something important to say, and we are listening to each and every one of them.”

However, McCabe acknowledges that reactions to the Clean Power Plan have been mixed.

“We’ve heard from people who support EPA moving forward with the Clean Power Plan and people who don’t,” she explained in her blog. “We’ve heard support for the flexibility the proposal provides to states to develop plans that meet the needs for their residents and businesses. We’ve heard that the carbon reduction targets we proposed are too tough, and we’ve heard that they’re not tough enough. And much, much more.

“What we know for sure,” she continued, “is that people care about this issue, and we know we have a lot to consider as we work toward a final rule.”

The EPA is slated to finalize its Clean Power Plan by June of this year.

Renewable energy stakeholders have been outspoken supporters of the EPA’s plan, as many believe the power plant rules could help boost the renewables industry. However, several utilities and grid operators have raised concerns about the plan’s proposed timeline, as well as potential costs associated with meeting the regulations.

 

Go deeper

Analysis by the Natural Resources Defense Council (NRDC) says the EPA can achieve substantially deeper cuts in CO2 emissions than it has proposed by requiring even more stringent energy-efficiency measures and increased renewable power generation capacity.

Such improvements would deliver major savings for consumers on utility bills, trigger a boom in clean energy jobs and reduce power plant carbon pollution by more than 40%, the environmental advocacy group says. This would surpass the “30% by 2030” goal President Obama outlined when the EPA first proposed its Clean Power Plan.

The NRDC comments claim that prices for energy-efficiency investments and renewable power costs are substantially lower than the EPA assumed in its analysis, and their performance is continually improving. Specifically, the cost of installing solar panels on homes has fallen 46% since 2010, the NRDC says, and similar price drops are being seen in wind power. Those two sources accounted for 44% of all the new electricity generating capacity installed in 2012 and 2013, federal data shows.

Citing its analysis, the NRDC says the EPA has underestimated the potential for renewable generation in 2020 by at least 60% because the agency’s analysis did not fully capture the recent price reductions for getting power from the wind and sun. Similarly, the EPA’s projections underestimate what’s possible through energy efficiency. R