For utilities that want to build their own solar power projects, the message from some state regulators is: Sharing, it's a good thing.
The California Public Utilities Commission on Wednesday is set to hear a debate on whether the Southern California Edison should be required to allow independent power producers to participate in a proposed 250-megawatt rooftop project.
The utility announced in March last year a plan to place solar panels on 65 million square feet of leased commercial rooftops throughout its territory. Edison is now asking for the CPUC's approval to recover the costs of the estimated $875 million project. The project would take five years to deploy, and is divided into 1-megawatt to 2-megawatt installations.
Edison's plan calls for it to own and operate the entire project. But the CPUC is considering requiring the utility to do that for the 160-megawatt portion only while allowing other, independent power producers to own and operate the remaining 90 megawatts. Edison would then buy power from these independent power producers under long-term contracts.
Edison is running into some of the same criticism faced by Duke Energy when Duke proposed a $100 million project to install 20 megawatts of solar panels on residential, commercial and school rooftops in North Carolina last year (see Duke Energy Eyes Residential Rooftops).
Duke cut the project in half last October after critics said the plan was too expensive and that the utility should allow independent power companies an opportunity to own and operate parts of the project and sell the electricity to Duke (see Duke Chops $100M Distributed solar Project in Half). Duke's decision didn't win it the approval it wanted from the North Carolina Utilities Commission, which voted last December to allow Duke to pass on only a portion of the costs to ratepayers. Duke is appealing that decision, and expects a commission decision in the next several weeks, said Paige Sheehan, a Duke spokeswoman.
Edison's 250-megawatt project has also raised the fair-competition issue. As a result, the CPUC posted on March 13 a proposed decision that would allow Edison to own and operate 160 megawatts of the project while requiring the utility to accept bids from independent power producers for the other 90 megawatts. The commission won't be voting on the proposed decision until mid April at the earliest.
In the proposed decision, the CPUC said the rooftop solar project appears to be a good idea because it allows power generation to happen close to the customers. That minimizes the need to build more transmission lines, which are expensive to put in but necessary for solar power plants in remote areas.
But Edison shouldn't hog the entire project for itself because that would be anti-competitive, according to the proposed decision. The Division of Ratepayer Advocates, part of the CPUC, has argued that it would be difficult to gauge whether Edison's proposal is a good deal for consumers if the project isn't opened to a competitive bidding process.
Recurrent Energy, an independent power producer in San Francisco, and the Solar Alliance also filed protests criticizing the Edison's project for being anti-competitive. Recurrent has told the CPUC that Edison could use its size to grab many available commercial rooftop spaces and make it difficult for smaller power producers to grow their businesses.
Edison has countered that it would buy solar panels and other equipment for building solar energy systems from different suppliers, so many businesses would benefit from the project. It also has maintained that it could reduce installation and operational costs by owning and operating the entire project by itself.
First Solar, which already has won three pilot installation projects from Edison (while Edison waits for a CPUC approval), supports the utility's position.
Join industry leaders and influencers at Surviving the Shakeout: Greentech Media’s 2009 Solar Industry Summit in Phoenix, Ariz., April 14–15.