One of Colorado Commissioner Frances Koncilja’s biggest concerns is that the regulators could approve a utility’s multimillion-dollar investment plan, only to have that technology be dated by the time it’s installed.
“To hear yesterday that technology is moving so quickly now that wind [being installed today] could be legacy technology is a little frightening to me,” she told the audience on day two of GTM’s Power & Renewables Summit in Austin, Texas. Having recently approved Xcel Colorado’s $1 billion plan to build 600 megawatts of wind generation, and now weighing a proposal for Xcel to build 1,000 megawatts more, the pace of technology change is front of mind for Koncilja.
This week’s column begins with more from Commissioner Koncilja on regulating in an age of energy transformation, followed by a snapshot of solar policy trends from across all 50 states, and then a roundup of the latest state energy policy news.
Commissioner Koncilja talks clean energy, coal and legacy technology
There are three recent pieces of news out of Colorado that should give renewable energy supporters “great hope and comfort” that consumers really want these cleaner resources and are willing to fight for them, said Commissioner Koncilja.
The first is that Denver passed a green roof initiative this week that requires most new buildings to have gardens, solar panels or other “green” components to cover at least 20 percent of the roof’s surface. What’s interesting, Koncilja noted, is that the green roof proposal survived a David-and-Goliath-style policy battle. Denver citizen groups raised roughly $21,000 to champion the initiative, while the opposition committee raised nearly $250,000 since members of the Colorado Real Estate Alliance formed it in September.
“That’s an indication that citizens -- in Colorado at least -- really want and will pay for renewables,” said Koncilja. “And when governmental entities don’t move quickly enough, they will force them to.”
In that same vein, Boulder residents voted this week on whether or not to continue funding the city’s efforts to separate from Xcel and form its own electric utility -- driven by the desire to adopt more renewables. After a close race, 51.71 percent of residents cast their ballot in favor of continuing funding the effort to municipalize. In September, the Colorado PUC issued a decision on Boulder’s request. Now the city must now figure out how much money it needs to actually form a local utility, which will prompt another vote before Boulder can be issued any debt.
While the effort to form a municipal utility in Boulder has been long and contentious, Koncilja remarked that Xcel wouldn’t have moved into renewables as quickly over the past few years without it. She added, however, that if several more cities attempt to do the same thing, it risks creating a balkanized grid “and there would be some stranded assets someone would have to pay for.”
The third interesting news item for renewables industry-watchers is that Xcel has filed to close two of its Colorado-based coal plants, and is looking to replace them with a diverse portfolio of resources of up to 1,000 megawatts of wind, 700 megawatts of solar and 700 megawatts of natural gas. Closing these two plants is expected to provide half of the 26 percent reduction in greenhouse gas emissions by 2025 requested by Gov. John Hickenlooper in July.
“The fundamental economics of these technologies (wind and solar) is what is making these dramatic changes possible and beneficial to consumers,” David Eves, president of Xcel Energy in Colorado, told The Denver Post in August.
Commissioner Koncilja reiterated that point, citing recent research by the Western Interstate Energy Board (WIEB) that found coal plants are no longer serving as baseload generators. WIEB recently noted that baseload operation of the coal fleet in the West has decreased from 52 percent of coal unit operating days in 2001 to 22 percent in 2016.
“That tells you it’s not cost-effective,” said Koncilja, and that natural gas, wind and solar “are a lot, lot cheaper.”
But the shift to clean energy comes with some of its own cost-related concerns, she said. Wind turbine technology is advancing so quickly, for instance, Koncilja said she’s concerned she’s going to lock consumers into paying for technology that soon becomes outdated.
The same is true for the roughly $650 million the PUC recently allowed Xcel to spend on smart meters, transformers and inverters. “If the technology keeps moving quickly, [since] these won’t be dispatched and employed until 2023, they will be legacy systems at that point,” Koncilja said.
“You folks need to slow down so we feel we’re spending wisely for our ratepayers,” she joked with the audience at GTM’s Power & Renewables Summit.
GTM’s Shayle Kann noted that technology innovation is inherent to the energy sector and “it’s never going to be done.” Falling behind “will always be a concern,” he added, but the industry won’t progress if projects never get built. “At some point, you just have to pull the trigger," he said.
Koncilja agreed, and called on industry members and advocates and others to help commissioners balance deploying ratepayers’ money effectively with deploying new technologies. “We really rely on what both the utilities and interveners tell us,” she said. “We don’t have the resources to second-guess; we need all of you to intervene and second-guess.”
Speaking of intervening, Colorado opened a renewables-related proceeding (17M-0694E) last month that stakeholders may want to weigh in on. The PUC is considering changes to the state’s Renewable Energy Standard, and specifically rules around net metering. It’s also evaluating rules related to electric resource planning and resource acquisitions from qualifying facilities. Finally, the PUC is seeking input on potential new rules around distribution resource planning. Initial comments are due by January 31.
The 50 States of Solar -- ICYMI
Changes related to fixed charges were the most common policy action in the third quarter of 2017, according to the N.C. Clean Energy Technology Center’s (NCCETC) latest 50 States of Solar report. But the real story seems to be in the details and how states are making incremental changes in the transition away from net metering.
Last quarter, 44 utilities in 26 states plus Washington, D.C. had requests pending or decided to increase monthly fixed charges or minimum bills on all residential customers by at least 10 percent. Eleven utilities proposed new fixed charge increases during the quarter. Regulators in eight states ruled on requests to increase residential fixed charges, and only one utility was granted its full requested increase.
With respect to net metering decisions, “the principle of gradualism has emerged as a common thread,” the report states. Regulators in New Hampshire, for instance, opted to make minor changes to their net metering policies this year while considering more comprehensive reforms. In the third quarter, the Utah Public Service Commission approved a settlement agreement, including a net metering transition tariff, which will take effect while parties determine the export credit rate structure over a three-year period.
“Many states are taking an incremental approach to net metering and other solar policy changes,” noted Autumn Proudlove, lead author of the report and Manager of Policy Research at NCCETC. “These states are adopting smaller changes while continuing to consider broader reforms, as well as phasing in credit rate adjustments and implementing pilot programs in order to test new designs and introduce these concepts to customers.”
Other notable developments in Q3 include:
- The Kansas Corporation Commission issuing a DG compensation and rate design policy determination, creating a separate rate class for DG customers
- Idaho Power requesting the creation of a separate customer class for DG customers
- Implementation beginning for Illinois’ new community solar program
- NV Energy submitting its proposal to implement AB 405 net metering changes
In other energy news
NV Energy files to build “lowest-cost” solar PPAs: NV Energy has filed a request with the Nevada PUC to approve three new solar PPAs totaling 100 megawatts. The utility says two of the projects boast the lowest-cost PPAs seen in the U.S. to date, at $34.20 per megawatt-hour for both 25-megawatt, 25-year contracts. At 50 megawatts, the third project, Turquoise Nevada, would be the largest array in northern Nevada. NV Energy has been under pressure to provide clean energy options for its customers and faces a vote next year that could eliminate the utility’s monopoly. In a separate request, the utility asked regulators to utilize the NV GreenEnergy Rider program “to help a major customer offset 100 percent of its next phase of growth with solar energy.”
Ohio ruling to reduce net metering credits: Ohio regulators voted unanimously to reduce net metering credits by 31 percent and limit the system size for qualifying projects to 120 percent of a customer’s average annual electric usage, The Columbus Dispatch reports. The decision is available here.
Georgia Power shows progress at Vogtle nuclear plant: Georgia Power announced the placement of the 52-ton CA02 module for Unit 4 of the Vogtle nuclear power plant expansion project this week via a video posted on its YouTube channel. The video comes as the Southern Company subsidiary defended the ongoing construction of its over-budget and behind-schedule nuclear power project in several days of hearings.
Regulators find SCANA spent extravagantly on VC Summer nuclear project: South Carolina regulators told The State this week that SCANA leaders overspent on travel, meals and promotional costs for the now-canceled VC Summer nuclear plant. Regulatory staff ultimately barred the utility from charging its customers for more than 40 expenditures, totaling nearly $213,100.
Illinois opens public comment period on energy resource adequacy concerns: The Illinois Commerce Commission is gathering public input regarding electric resource adequacy concerns, in light of several recent and pending Illinois power plant retirements. In particular, Dynegy has stated that a third of its Illinois coal-fired plants are at high risk of retirement and another third are in serious consideration for retirement. A white paper detailing dynamics of the resource concerns and the comment information is available here. Pre-workshop, written public comments will be accepted through Nov. 30
PACE report finds low-income customers underserved: The Energy Programs Consortium released a report on PACE financing in California this week that finds low-income families are less likely to participate in PACE programs and that PACE contractors do not appear to be targeting low-income areas. The report also makes several recommendations to PACE providers, contractors and state entities to enhance consumer protections for low-income families in PACE.
Bipartisan group of solar advocates form Tennesseans for Solar Choice: Conservatives, progressives and a former chair of Tennessee Valley Authority have joined forces with solar and business groups to launch Tennesseans for Solar Choice. The initiative was launched “to defend fair access to affordable, renewable energy and explain the urgency in protecting Tennesseans’ right to choose solar energy and ensure that decisions made by TVA are fair for all consumers,” the group said. TVA is currently advancing a proposal that would charge customers more for using less power, undermining efforts to boost efficiency and go solar.
New report tracks city, state and business climate actions: According to a new analysis by the Yale Data-Driven Environmental Solutions Group, “Over 7,000 cities and nearly 250 regions, covering 16.9 and 17.5 percent of the global population, respectively, have committed to climate action. This figure includes more than two-thirds of the Global 300 Cities by GDP Purchasing Power Parity, which represent $36.8 trillion USD. Approximately 6,225 companies and investors from 120 countries, representing $36.5 trillion USD in revenue, were also captured in the analysis.”