The Colorado Public Utilities Commission (CPUC) has denied Xcel Energy’s proposed settlement agreement with three community solar developers.
In February, Xcel announced a deal with Clean Energy Collective, Community Energy Inc. and SunShare under which the utility would have added up to 60 MW of new community solar garden (CSG) capacity in Colorado through its Solar*Rewards Community program this year. The compromise came after claims that Xcel wasn’t doing enough to further community solar in the state, and the companies filed the settlement agreement with the CPUC.
In a press release, the CPUC claims the settlement was not in the public interest because the agreement was inconsistent with certain statutes, commission rules and previous decisions, and it was likely to raise the cost of renewable energy to customers.
According to the commission, Xcel had previously declared the three developers as the winning bidders of the utility’s 2015 competitive solicitation for CSG resources. The CPUC says that under the terms of the proposed settlement, Xcel would pay a rate of $0.03/kWh for the renewable energy credits produced by the CSGs, instead of the bid prices offered in response to the 2015 request for proposals.
In rejecting the settlement, the CPUC adds that questions about the nature of the negotiations and the single, higher REC price made it unlikely that the settlement would result in cost-effective implementation of CSGs. Advisory staff estimated that the settlement would increase the cost of the development of solar gardens by hundreds of thousands of dollars per facility, the commission adds.
“Rather than utilize the commission-approved competitive process, the parties filed a settlement that is not in the public interest,” says CPUC Chairman Joshua Epel.
The CPUC notes that it directed Xcel in 2014 to acquire between 19.5 MW and 90 MW of CSGs by the end of 2016 and its rejection of the proposed settlement does not alter that authorization.
Mark Stutz, a spokesperson for Xcel Energy, says the utility is “disappointed by the decision.” However, the utility cannot comment on specifics until it reviews the written CPUC order. Stutz says Xcel might consider an appeal, but no such decision has been made at this time.
Tim Braun, a spokesperson for Clean Energy Collective, adds, “We are quite surprised by the CPUC’s ruling and are looking forward to the written order to get more insight.
“At first blush, we believe the CPUC didn’t understand the process or net effect of the components of the settlement agreement, particularly with regard to the balance between a revised credit calculation and REC pricing, the result of which would actually be a net consumer benefit,” Braun continues. “[It is] hard to say what is next until we see the written order.”