Utility And Solar Stakeholders Unite Under Massive Settlement Agreement In Colorado

Posted by Joseph Bebon on August 16, 2016 No Comments
Categories : Featured, New & Noteworthy

In what Xcel Energy is hailing as the largest proposed deal of its kind in Colorado history, the utility and nearly two-dozen parties have reached a settlement agreement on a variety of key energy issues in the state, including solar.

The Colorado Solar Energy Industries Association (COSEIA), one of several solar stakeholders involved, has lauded the agreement and says it resolves a host of challenges facing the state’s solar sector while setting the stage for progressive future energy policy.

In filings with the Colorado Public Utilities Commission (CPUC), Xcel Energy and 22 of 26 intervenors agreed, in total or in part, on a global settlement on three recent Xcel Energy filings, including the company’s Phase II Electric Rate Case, Solar*Connect, and the 2017 Renewable Energy Plan. The deal is the result of discussions between the utility and the intervenors over the past several months. (Notably, the settlement is separate from a compromise Xcel announced earlier this year with community solar developers.)

“The agreement will benefit Xcel Energy’s Colorado customers by allowing us to move forward with the ‘Our Energy Future’ initiative. It will allow us to meet our customers’ expectations by giving them more control over their energy choices. It will bring more renewable and carbon-free energy to Colorado through the use of new technologies, and it will be provide affordable and reliable energy to further power the state’s economy,” says Alice Jackson, regional vice president for rates and regulatory affairs of Xcel Energy – Colorado, in a press release.

The proposed settlement will go before the CPUC for approval, and parties anticipate hearings on the settlement to take place in October, with a decision by the end of this year. Although the settlement includes provisions affecting various energy resources, some major solar-related provisions include the following:

  • Xcel Energy and parties have agreed to begin a transition and test out new rate designs for its residential customers. Specifically, Xcel would gradually offer energy-based time-of-use (TOU) rates to volunteer customers over the next three years. COSEIA says the strategic shift from flat rates to more sophisticated TOU ones would allow customers more influence over their electric bill. These rates, now popular in some other markets, assign higher costs to energy during times when demand raises the cost of electricity. COSEIA says that because solar generates electricity during most of these hours, TOU rates more fairly account for the value of solar to all ratepayers. At the end of 2019, Xcel would present the outcome of the voluntary program, which would require meter upgrades, to the CPUC. Provided the analysis shows that the program should be expanded, all residential customers would transition to energy-based TOU billing some time in 2020.
  • Xcel Energy would withdraw its grid-use charge as originally filed.
  • The utility would be allowed to pursue its previously proposed Solar*Connect program but under a new name, Renewable*Connect. Renewable*Connect calls for a new, 50 MW solar resource; it would initially be available to residential and small-commercial customers.
  • Xcel Energy would increase the level of participation in the Solar*Rewards medium-sized program to 24 MW a year and would offer the large-sized program for the first time since 2012. In all, Xcel says the program expansion would result in a maximum of 342 MW of new solar between 2017 and 2019.
  • In an effort make solar more accessible to low-income customers, Xcel Energy would provide for new offerings for both solar gardens and private (on-site) solar. The company says it would work with the Colorado Energy Office to develop the rooftop solar program and would reserve a portion of its solar garden offerings for low-income customers.

“This settlement signals cooperation rather than confrontation,” says John Bringenberg, COSEIA’s board president, in a press release.

COSEIA Executive Director Rebecca Cantwell adds, “The solar industry will create more jobs and produce more affordable clean energy because we have settled these issues. Through these summer-long negotiations, we achieved major progress in giving Coloradans more control over their electricity use.

“Instead of the damaging fixed charges initially proposed for everyone’s bills, we endorsed a move toward progressive electricity rates,” she continues. “These rates will reward residents and businesses who choose to go solar by putting a proper value on electricity produced when it is most valuable.”

COSEIA’s national counterpart, the Solar Energy Industries Association (SEIA), was also involved in the negotiations with Xcel.

Sean Gallagher, vice president of state affairs at SEIA, calls the settlement “a massive undertaking” and praises Xcel for its leadership.

“We applaud our fellow stakeholders who participated in lengthy negotiations and helped remove proposals that would have penalized the state’s solar customers for years to come,” says Gallagher in a press release. “Instead, this settlement expands solar access to low-income customers. It significantly increases the state’s capacity for clean, reliable, affordable solar energy, including more than doubling the solar capacity for commercial and industrial customers through the Solar*Rewards program. Without a doubt, this will support more well-paying solar jobs in the state.”

He adds, “We strongly encourage the Colorado Public Utility Commission to approve this deal.”

This settlement agreement comes as some power providers and solar stakeholders continue to battle each other across the U.S. over energy policies, especially net metering. However, utilities and local solar sectors in several states, including Massachusetts, New Hampshire, Georgia and New Yorkhave recently collaborated to reach compromises, as well.

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