Q1 2016 Quarterly Report - NC Clean Energy Technology Center

50

States of

SOLAR Q1 2016 Quarterly Report

NC CLEAN ENERGY TECHNOLOGY CENTER

April 2016

AUTHORS Autumn Proudlove Ethan Case Kate Daniel Brian Lips David Sarkisian Achyut Shrestha The NC Clean Energy Technology Center is a UNC System-chartered Public Service Center administered by the College of Engineering at North Carolina State University. Its mission is to advance a sustainable energy economy by educating, demonstrating and providing support for clean energy technologies, practices, and policies. The Center provides service to the businesses and citizens of North Carolina and beyond relating to the development and adoption of clean energy technologies. Through its programs and activities, the Center envisions and seeks to promote the development and use of clean energy in ways that stimulate a sustainable economy while reducing dependence on foreign sources of energy and mitigating the environmental impacts of fossil fuel use.

CONTACT Autumn Proudlove ([email protected])

PREFERRED CITATION North Carolina Clean Energy Technology Center, The 50 States of Solar: Q1 2016 Quarterly Report, April 2016.

ACKNOWLEDGMENTS The authors would like to thank Tom Stanton of the National Regulatory Research Institute for his insightful comments and review of a report draft, as well as Matt Abele of the NC Clean Energy Technology Center for his graphic design work on this report. Any omissions or inaccuracies are the authors’ own.

COVER PHOTO CREDIT Photo by Wayne National Forest. “Wayne National Forest Solar Panel Construction.” July 15, 2009. CC-By 2.0. Retrieved from https://www.flickr.com/photos/waynenf/3725051641 Photo by North Carolina Clean Energy Technology Center. “Training Class – PV Installation.” April 25, 2014.

The 50 States of Solar: Q1 2016 Quarterly Report | 1

DISCLAIMER While the authors strive to provide the best information possible, neither the NC Clean Energy Technology Center nor NC State University make any representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The NC Clean Energy Technology Center and NC State University disclaim all liability of any kind arising out of use or misuse of the information contained or referenced within this report. Readers are invited to contact the authors with proposed corrections or additions.

PREVIOUS EDITIONS The 50 States of Solar is a quarterly publication. Previous editions of The 50 States of Solar are available for complimentary download at www.nccleantech.ncsu.edu or by clicking here:     

Q4 2015 and 2015 Policy Review Q3 2015 Q2 2015 Q1 2015 Q4 2014


TABLE OF CONTENTS GLOSSARY OF ABBREVIATIONS ........................................................................................ 5 OVERVIEW ............................................................................................................................... 6 PURPOSE .............................................................................................................................. 6 APPROACH ........................................................................................................................... 6 Questions Addressed .......................................................................................................... 6 Actions Included.................................................................................................................. 6 U.S. DISTRIBUTED SOLAR MARKET ................................................................................... 8 OVERVIEW OF Q1 2016 POLICY CHANGES .......................................................................... 9 Table 1. Summary of Policy Actions (Q1 2016) ............................................................... 9 Figure 1. Action on Net Metering, Rate Design, & Solar Ownership Policies (Q1 2016) .. 9 Box 1. Top Five State Solar Policy Developments of Q1 2016 .......................................10 NET METERING POLICY CHANGES ...................................................................................11 Figure 2. Action on Net Metering Policies (Q1 2016) .....................................................11 Figure 3. Proposed and Enacted Changes to Net Metering Policies by Type (Q1 2016)12 Box 2. A Note on Net Metering Terminology ..................................................................13 Figure 4. Current Net Metering and Distributed Generation Compensation Policies ......13 Box 3: Net Metering and Net Billing Terminology ...........................................................14 Table 2. Updates on Net Metering Policies (Q1 2016)....................................................15 DISTRIBUTED SOLAR VALUATION STUDIES ....................................................................24 Figure 5. Action on Distributed Solar Valuation and Net Metering Studies (Q1 2016) ....24 Table 3. Updates on Distributed Solar Valuation and Net Metering Studies (Q1 2016) ..25 COMMUNITY SOLAR POLICY .............................................................................................28 Figure 6. Action on Community Solar Policy (Q1 2016) .................................................28 Box 4. What is Community Solar?..................................................................................29 Table 4. Updates on Community Solar Policies (Q1 2016) .............................................30 FIXED CHARGES .................................................................................................................32 Figure 7. Proposed Increases to Residential Fixed Charges (Q1 2016) .........................32 Table 5. Updates on Increases to Residential Fixed Charges (Q1 2016) .......................33 SOLAR CHARGES................................................................................................................39 Figure 8. Proposed Charges on Residential Solar Customers (Q1 2016) ......................39 Box 5. Demand Charges, Standby Charges, & Flat Fees...........................................40


Table 6. Updates on Residential Solar Charges (Q1 2016) ............................................41 THIRD-PARTY SOLAR OWNERSHIP...................................................................................44 Figure 9. Action on Solar Third-Party Ownership (Q1 2016) ..........................................44 Figure 10. Third-Party Solar PPA Legality .....................................................................45 Table 7. Solar Third-Party Ownership Updates (Q1 2016) .............................................46 UTILITY-LED ROOFTOP SOLAR PROGRAMS ....................................................................48 Figure 11: Utility-Led Rooftop Solar Program Updates (Q1 2016)..................................48 Table 8. Updates on Utility-Led Rooftop Solar Programs and Policies (Q1 2016) ..........49 Q2 2016 OUTLOOK ..............................................................................................................50 ENDNOTES ..........................................................................................................................51


GLOSSARY OF ABBREVIATIONS d/b/a

Doing Business As

DER

Distributed Energy Resources

DG

Distributed Generation

IOU

Investor-Owned Utility

kW

Kilowatt

kWh

Kilowatt-Hour

MW

Megawatt

NEM

Net Energy Metering

PPA

Power Purchase Agreement

PV

Photovoltaics

REC

Renewable Energy Credits

TOU

Time of Use


OVERVIEW PURPOSE The purpose of this report is to provide state lawmakers and regulators, electric utilities, the solar industry, and other energy stakeholders with timely, accurate, and unbiased updates on how states are choosing to study, adopt, implement, amend, or discontinue policies associated with distributed solar photovoltaics (PV). This report catalogues proposed and enacted legislative, regulatory policy, and rate design changes affecting the value proposition of distributed solar PV during the most recent quarter, with an emphasis on the residential sector. The 50 States of Solar provides regular quarterly updates of solar policy developments, keeping stakeholders informed and up to date on a timely basis.

APPROACH The authors identified relevant policy changes through state utility commission docket searches, legislative bill searches, popular press, and direct communication with stakeholders and regulators in the industry.

Questions Addressed This report addresses several questions about the changing U.S. solar policy landscape: 

How are (1) state regulatory bodies and legislatures and (2) electric utilities addressing fast growing markets for distributed solar PV?



What changes to traditional rate design features and net metering policies are being proposed, approved, and implemented?



Where are distributed solar markets potentially affected by policy or regulatory decisions on community solar, third-party solar ownership, and utility-led residential rooftop solar programs?

Actions Included This report focuses on cataloguing and describing important proposed and adopted policy changes affecting solar customer-generators of investor-owned utilities (IOUs) and large publicly-owned or nonprofit utilities (i.e., those serving at least 100,000 customers). Specifically, actions tracked in this issue include:




Significant changes to state or utility net metering laws and rules, including aggregate caps, system size limits, aggregate net metering rules, and compensation rates for net excess generation



Changes to statewide community solar laws and rules, and individual utility-sponsored community solar programs arising from statewide legislation



Legislative or regulatory-led efforts to study the value of solar, net metering, or distributed solar generation policy, e.g., through a regulatory docket or a cost-benefit analysis



Utility-initiated rate requests for charges applicable only to residential customers with solar PV or other types of distributed generation, such as added monthly fixed charges, demand charges, stand-by charges, or interconnection fees



Utility-initiated rate requests that propose a 10% or larger increase in either fixed charges or minimum bills for all residential customers



Changes to the legality of third-party solar ownership, including solar leasing and solar third-party solar PPAs, and proposed utility-led rooftop solar programs

In general, this report considers an “action” to be a relevant (1) legislative bill that has been passed by at least one chamber or (2) a regulatory docket, utility rate case, or rulemaking proceeding. Introduced legislation related to third-party sales is included irrespective of whether it has passed at least one chamber, as only a small number of bills related to this policy have been introduced. Introduced legislation pertaining to a regulatory proceeding covered in this report is also included irrespective of whether it has passed at least one chamber.

Actions Excluded In addition to excluding most legislation that has been introduced but not advanced, this report excludes a review of state actions pertaining to solar incentives, as well as more general utility cost recovery and rate design changes, such as decoupling or time-of-use tariffs. General changes in state implementation of the Public Utility Regulatory Policies Act of 1978 and subsequent amendments, including changes to the terms of standard contracts for Qualifying Facilities or avoided cost rate calculations, are also excluded unless specifically related to the policies described above. The report also does not cover changes to a number of other policies that affect distributed solar, including solar access laws, interconnection rules, and renewable portfolio standards. Details and updates on these and other policies and incentives are available at www.dsireusa.org.

015 POLICY REVIEW The 50 States of Solar: Q1 2016 Quarterly Report | 7

U.S. DISTRIBUTED SOLAR MARKET The U.S. distributed solar market continues to grow, with residential PV being the fastest-growing sector of the U.S. solar industry in 2015.1 The residential PV market grew 66% over 2014, with 14 states installing over 20 MW of new solar capacity in 2015.2 This growth is expected to continue, particularly due to the recent extension of the federal investment tax credit. The credit, which was previously set to expire for residential systems at the end of 2016, will be available at its current 30% level through 2019, then will step down over the next several years and expire at the end of 2021. The credit will remain at 10% permanently for commercial systems after 2021. GTM Research estimates that the extension of the federal investment tax credit will increase residential solar PV installations by 35% between 2016 and 2020 compared to a scenario without the extension.3 Increased adoption of distributed energy technologies is creating a fundamental shift in the U.S. electric system that policy must respond to. The electric system in the U.S. has traditionally been a “one-way street”, with power flowing from utility-owned centralized generation, via utility-owned transmission and distribution lines, toward end-use customers. However, the electric system is increasingly becoming more of an interconnected web, with small but growing numbers of end-use customers also generating electricity with small-scale, distributed systems that are capable of providing various services to the grid. Because state policy and rate design was developed around the former, it is likely that significant changes will be necessary to ensure fair market access and compensation for grid participants. In recent months, markets for distributed energy technologies have been expanding rapidly, racing ahead of the policy changes that might be needed to best accommodate them. Fair compensation for both solar customers and utilities is at the heart of ongoing state solar policy and rate design discussions. The question of potential cost shifts resulting from net metering is becoming more important with increasing levels of distributed generation on the grid. Utilities frequently recover a large portion of their fixed operating costs through residential customers’ variable rates, and suggest that because net-metered customers are significantly reducing this variable portion of their bill, they are not paying for their fair share of fixed operating costs. However, many also suggest that solar customers provide benefits to the grid and other ratepayers that they are not directly compensated for. This dynamic has led many states to formally study the costs and benefits of net metering or the value of distributed generation to the grid in order to help identify the appropriate level of compensation for solar customers. States and utilities are taking widely varying approaches to distributed solar policy and rate design, and a majority of states are currently considering changes. As of yet, no singular policy design has emerged as a leading approach across the country. While some states and utilities are considering adjustments to the compensation rate for real-time excess generation, others are proposing additional charges on solar customers or fixed charge increases across all residential customers. Still, other states have recently reexamined net The 50 States of Solar: Q1 2016 Quarterly Report | 8

metering and opted to remain with that compensation mechanism for the time being. The decisions that states make will be instrumental in determining future solar market growth and which markets see this growth.

OVERVIEW OF Q1 2016 POLICY CHANGES Table 1 provides a summary of state actions related to net metering, rate design, and solar ownership during Q1 2016. Of the 100 actions catalogued, the most common were related to net metering (35), followed by residential fixed charge increases (27), and state solar valuation or net metering studies (13). The actions occurred across 39 states in Q1 2016 (Figure 1). Box 1 highlights some of the key actions of Q1 2016, described in greater detail in the following sections.

Table 1. Summary of Policy Actions (Q1 2016) Policy Type

# of Actions

% by Type

# of States

Net metering Residential fixed charge increase Solar valuation or net metering study Residential solar charge Community solar Third-party ownership of solar Utility-led rooftop PV programs

35 27 13 8 7 7 3

35% 27% 13% 8% 7% 7% 3%

22 18 12 5 7 7 3

Total

100

100%

39 States

Note: The “# of States/ Districts” total is not the sum of the rows, as some states have multiple actions.

Figure 1. Action on Net Metering, Rate Design, & Solar Ownership Policies (Q1 2016)


Box 1. Top Five State Solar Policy Developments of Q1 2016 Maine wraps up stakeholder process and moves forward on net metering alternative Maine completed its solar stakeholder process investigating an alternative to net metering in January 2016, with the group filing its final report with the Public Utilities Commission in early February. Later in February, a bill was introduced to adopt the market-based solar policy framework described in the stakeholder report. Florida utility-backed solar initiative makes it onto the November ballot One of two solar ballot initiatives in Florida is headed to the November 2016 ballot. The utilitybacked group, Consumers for Smart Solar, received the required signatures and judicial approval necessary to put its proposal for a state constitutional amendment on the fall ballot. The state’s other solar ballot initiative, led by Floridians for Solar Choice, failed to receive sufficient signatures to make it onto the ballot, and is turning its attention to the 2018 ballot. California (mostly) preserves net metering In a high-profile decision, the California Public Utilities Commission (CPUC) voted in January 2016 to preserve retail rate net metering – for the most part. Net metering customers will now be required to pay certain non-bypassable charges, amounting to approximately $0.02 to $0.03 per kilowatt-hour (kWh), for all energy consumed from the grid. In 2019, the CPUC plans to review the successor tariff and consider adjustments, particularly regarding an export compensation rate that accounts for locational and time-differentiated values. Vermont releases updated proposed net metering rules In Q1 2016, Vermont released proposed net metering rules, which included significant changes from the draft rules published in December 2015. The new rules would monetize generation credits before applying these to a customer’s bill, and credits would not be able to offset any charges other than a customer’s kWh consumption charges. The new rules would also implement positive and negative credit adjustors based on system size, siting, and renewable energy credit (REC) ownership. Two solar valuation studies filed in Arizona dockets Two separate studies looking at the value of residential solar projects were filed in Arizona dockets during Q1 2016. One study, conducted by Navigant Consulting and filed by Arizona Public Service, analyzed project returns for third-party owned systems, and concluded that current returns are such that providers have room to adjust to net metering and rate design changes. The second study, conducted by Crossborder Energy and filed by The Alliance for Solar Choice, analyzed the costs and benefits of distributed solar, finding that the benefits of solar to the grid are greater than the costs.


NET METERING POLICY CHANGES Key Takeaways:   

In Q1 2016, there were 35 actions in 22 states related to net metering policy changes. In nine states, changes to the compensation rate for real-time excess generation were under consideration during Q1 2016. Seven states took or considered actions relating to aggregate caps on net metering capacity.

In Q1 2016, there were thirty-five actions occurring (or under consideration) in twenty-two states related to net metering policies, excluding ongoing studies or investigations into the value of solar or net metering (see the following section for information on these actions). California regulators approved a successor tariff that will apply to new customers once the state’s investorowned utilities reach the net metering cap. The new policy largely preserves California’s existing net metering rules, but does require new customers to pay an interconnection fee and certain non-bypassable charges for energy consumed from the grid (amounting to about $0.02 to $0.03 per kWh), and to go on time-of-use rates when those rates become available.

Figure 2. Action on Net Metering Policies (Q1 2016)

A Maine bill that would introduce a net billing system with gradually declining compensation rates for electricity exported to the grid was passed out of committee, but is opposed by the state’s governor and many legislators. This bill arose from a stakeholder process, convened by The 50 States of Solar: Q1 2016 Quarterly Report | 11

the Public Utilities Commission pursuant to L.D. 1263, which concluded at the end of January 2016.

Figure 3. Proposed and Enacted Changes to Net Metering Policies by Type (Q1 2016)

Also of note is a Mississippi bill approved by the state’s governor in April 2016 that will alter the state’s recently created net metering policy. This bill prevents regulators from establishing expenditures, compensation, or credits for net metering programs, meaning that the electric coops are no longer required to offer net metering at the compensation rate included in the Public Service Commission’s net metering order of avoided cost plus 2.5 cents per kWh. In Nevada, regulators extended the time period over which net metering rates will transition under the state’s new compensation system. However, regulators denied requests that would have grandfathered current net metering customers into the old rates. New Hampshire bills in the state’s House and Senate would increase the state’s aggregate net metering cap (currently 50 MW). The bills also instruct state regulators to examine possible alternatives and modifications to net metering that would address potential concerns present in the current system.


Box 2. A Note on Net Metering Terminology Real-time excess generation refers to changes to compensation for all electricity exported to the grid instantaneously. Net excess generation includes changes to how utilities compensate customers for excess production at the end of a billing period after a one-to-one netting of production and consumption has occurred. An aggregate cap refers to the maximum limit for net-metered capacity allowed to participate in a state’s or a utility’s net metering program, whereas the system size limits are capacity limits for individual systems to net meter. Aggregate net metering refers to a program design allowing one or more customers to aggregate multiple electric meters for the purpose of allocating net metering credits. Virtual net metering is a type of aggregate net metering where credits from one solar PV system are used to offset multiple customers’ electricity bills. Meter aggregation is another type of aggregate net metering in which a single customer may offset electrical use from multiple meters on his or her property. REC ownership refers to rules that specify whether renewable energy certificates/credits generated by a net-metered system shall accrue to the solar PV system owner or the utility. Net metering rules encompass other policy changes to net metering not covered by any of these other categories.

Figure 4. Current Net Metering and Distributed Generation Compensation Policies

Source: NC Clean Energy Technology Center (NCCETC)4 Notes: Georgia, Hawaii, Mississippi, and Nevada offer alternative compensation mechanisms for distributed generation such as net billing, which typically provides a rate of compensation for grid exports below the retail rate. The Idaho Public Utilities Commission has required investor-owned utilities in the state to offer net metering through separate docket proceedings; however, no statewide net metering policy exists. SWEPCO and Entergy have reached net metering caps in Louisiana and no longer offer net metering. The 50 States of Solar: Q1 2016 Quarterly Report | 13

Box 3: Net Metering and Net Billing Terminology Terminology for distributed generation compensation systems can be confusing, and with a large number of recent and proposed policy changes, the potential for confusion is especially high right now. One point of confusion is the distinction between net metering and net billing. These terms are often used interchangeably by governments and utilities,* but the two systems have important differences. After reviewing the definitions of these terms used in the academic literature,† we have devised definitions for net metering and net billing. These definitions should help to standardize the use of these terms and add clarity to the distributed generation policy discussion. Net Metering is a billing mechanism that compensates a customer for excess generation from an on-site energy system through credits that offset electricity usage at other times during the billing period. Electricity generated on-site first supplies the customer’s real-time use of electricity. Any electricity generated on-site in excess of the amount used in real time is exported to the grid. Under net metering, this excess generation is used to offset the customer's usage at other times during the billing period; credits for exported energy are deducted from the amount of electricity purchased from the utility during the billing period, in effect moving the customer’s electricity meter backward. This means that customers are compensated at the retail rate for electricity exported to the grid, at least as long as total on-site generation during the billing period is less than the customer’s total electricity usage during the billing period. When generation exceeds total usage during the billing period, different crediting schemes may be used. Net Billing is a billing mechanism that compensates a customer for excess generation from an on-site energy system by payment of a separate rate for electricity generated in excess of realtime use. Electricity generated on-site first supplies the customer’s real-time electricity use. Any electricity generated on-site in excess of the amount used in real time is exported to the grid. Under net billing, the utility pays the customer for this excess generation at a separate rate rather than crediting the generation against usage at other times in the billing period. Under net billing, a customer’s meter is essentially “stopped” when on-site generation is meeting real-time demand, but unlike with net metering, it does not go “backward”. The rate of compensation for exported electricity under net billing varies by state and utility. It is usually lower than the retail rate, but is often higher than the monthly average rates paid in the wholesale electricity market. Effectively, net billing customers still receive the retail rate for on-site generation that supplies their electricity usage in real time because it displaces grid-supplied electricity they would otherwise have to purchase at the full retail rate.

For example, Maine calls its system “Net Energy Billing” though it fits the standard definition of net metering, and Mississippi calls its new system “Net Metering” even though it more closely resembles net billing. † Hughes, L. & Bell, J., 2006; Yamamoto, Y., 2012; Dufo-Lopez, R. & Bernal-Agustin, J., 2015. *


Table 2. Updates on Net Metering Policies (Q1 2016) State

Type of Change

Description

Source

AR

Net Metering Rules

Act 827, passed in the 2015 legislative session, includes a number of changes to the state’s net metering policy. These changes include a provision requiring the Public Service Commission to open a docket to study the possibility of imposing additional fees on net metering customers. As of March 2016, the docket has not yet been created.

Not yet available

AZ

Real-Time Excess Generation

Tucson Electric Power (TEP) filed a general rate case in November 2015 that includes changes to its net metering tariff. The net metering proposal was originally filed separately in Docket E-01933A-15-0100, but moved to a full rate case by order of the Arizona Corporation Commission (ACC). TEP’s proposed net metering rider does not allow for one-to-one offsetting of generation with consumption. Instead, any exported energy is credited at a utility-scale renewable energy purchase rate. The excess generation credit will be applied to the customer’s bill for the same billing period, and may be carried over to the next billing period if the credit is greater than the billable amount. The ACC has set a procedural schedule in which direct testimony must be filed by June 3, 2016, with a hearing in August. The deadline for a final order is set for the end of December 2016.

Docket No. E01933A-150322


UNS Electric filed a general rate case in May 2015 that includes changes to its net metering tariff. The net metering proposal was originally filed separately in Docket E-04204A-15-0099, but moved to a full rate case by order of the Arizona Corporation Commission. UNS’s proposed net metering rider does not allow for the full one-to-one offsetting of generation with consumption. Instead, any exported energy is credited at a utility-scale renewable energy purchase rate. The excess generation credit will be applied to the customer’s bill for the same billing period, and may be carried over to the next billing period if the credit is greater than the billable amount. Hearings were held in March 2016.

Docket No. E04204A-150142

Aggregate Cap, Net Metering Rules, RealTime Excess Generation

In January 2016, the California Public Utilities Commission (CPUC) issued Decision 16-01-044 on net metering successor tariffs for California IOUs, pursuant to A.B. 327. A net metering successor tariff will take effect for the three IOUs on July 1, 2017, or when 5% of the sum of non-coincident customer peak demand is reached for the IOU, which translates to an installed netmetered capacity of 2,409 MW (Pacific Gas & Electric), 2,240 MW (Southern California Edison), and 617 MW (San Diego Gas & Electric). The successor tariff will not apply to customers entering into a net metering

Docket No. R1407002

CA

Decision 1601-044


agreement before the existing cap or end date is reached. The CPUC will review the successor tariff in 2019 and consider revisions to it. The structure for successor tariffs outlined in the final decision largely preserves many of the key elements of California’s existing net metering rules, but does make a few changes. Net metering successor customers:  





Pay a one-time interconnection fee, which is likely to be $75-$150; Pay non-bypassable charges (~$0.02$0.03/kWh) for each kWh of electricity the customer consumes from the grid in each metered interval; Have the option to remain on the successor tariff as it existed at the time they interconnected for a period of 20 years, or switch to the next successor tariff; And are required to go on a TOU rate when those rates become available.

In early March 2016, the state’s IOUs and The Utility Reform Network filed applications for rehearing of the decision, arguing that the CPUC ignored key requirements established by A.B. 327. Later in March 2016, SEIA, Vote Solar, and others filed a joint response to the applications for rehearing. The CPUC has 120 days to respond to the utilities’ applications for rehearing. Aggregate Cap, RealTime Excess Generation

Imperial Irrigation District announced it had reached its 5% aggregate capacity limit for net metering. New interconnection requests will be processed under its post-NEM distributed generation program, details of which are not yet available.

www.iid.com

CT

Net Excess Generation

The Connecticut Public Utilities Regulatory Authority is reviewing the state’s net metering credit banking policy, including when and how generated kWhs are accrued, banked, used, priced, and reimbursed, particularly when customers move from supplier to supplier.

Docket No. 15-09-03

FL


The Jacksonville Electric Authority, a municipal utility in Florida, has proposed changing compensation for grid exports under their net metering tariff from the retail rate to 7.5 cents per kWh.

Feb. 2016 JEA Board of Directors Meeting (p.168)

HI

Net Metering Rules

In October 2015, the Hawaii Public Utilities Commission (PUC) issued an order ending net metering. Existing customers were grandfathered into net metering arrangements, but new residential customer-generators must choose either a self-supply or a grid-supply option. Solar intervenors unsuccessfully filed a suit for an injunction of the order on procedural grounds.

Docket No. 2014-0192 Order No. 33258


In February 2016, the PUC issued Order No. 33559, addressing concerns of grandfathered net metering customers in the interconnection queue regarding minor capacity modifications of small PV systems. The order directs HECO to “apply a reasonable tolerance level to pending” net metering applicants and “to clarify in writing that they will allow minor system capacity changes for pending NEM applications.”

Order No. 33559

IA

Net Metering Rules

In June 2015, Eagle Point Solar filed a complaint with the Iowa Utilities Board, seeking a ruling that (1) net metering a system financed by a third party does not constitute a “resale” of energy and (2) Large General Service customers (i.e., customers that have a demand charge) of Interstate Power and Light (IPL) are eligible to net meter. Eagle Point Solar alleged that IPL “will take the position that any energy flowing from the solar array under a net metering arrangement is a ‘resale’ of energy in violation of their tariffs” if a third-party power purchase agreement (PPA) is used. In July, IPL began to offer net metering for solar PV systems using a third-party PPA for customers on its General Service tariff. Customers on IPL’s Large General Service tariff are ineligible for net metering, regardless of the system size or ownership arrangement. A hearing has been scheduled for May 2016 on the issue of whether Large General Service customers should be eligible for net metering.

Docket No. FCU-20150009

ID

Aggregate Cap

Rocky Mountain Power (RMP) has filed a petition with the Idaho Public Utilities Commission to raise the net metering cap for its service territory from 714 kW to 2,000 kW, effective beginning in May 2015. RMP had exceeded the existing cap by the end of 2015 with 1,049 kW of net-metered capacity. RMP is not addressing net metering rates in this application, but plans to do so in its next general rate case (2018).

PAC-E-16-07

IL

Meter Aggregation, Net Metering Rules

In April 2015, the Illinois Commerce Commission (ICC) initiated a rulemaking proceeding on the state’s net metering rules. The proposed rule adds new, clarifying definitions, enables web-based electronic application procedures, and requires a case-by-case consideration of meter aggregation by the utility and an explanation by the utility to the ICC if the request is denied. The proposed rules also align ICC net metering rules with previously enacted legislation. In November 2015, the ICC submitted its Second Notice on the rulemaking to the Joint Committee on Administrative Rules (JCAR) for review, after which the rule can be adopted if JCAR does not issue an objection. JCAR was still reviewing as of the beginning of April 2016.

Docket No. 15-0273

LA

Aggregate Cap, Real-

In December 2015, the Louisiana Public Service Commission initiated a rulemaking proceeding to (1)

Docket No. R33929


MA

MD

Time Excess Generation

modify the current net metering rules to address compensation for new solar customers once a utility reaches the net metering cap, and (2) examine appropriate changes to solar policies in the state. Under the Commission staff’s proposed rules (attached to the notice of proposed rulemaking), once a utility reaches 0.5% of its monthly retail peak load, any electricity exported to the grid by a net-metered customer would be credited at the avoided cost rate (i.e., net billing). The rule did not provide a grandfathering provision for existing net metering customers. The rules were open for public comment until January 2016.

Aggregate Cap, RealTime Excess Generation

Beginning January 1, 2016, Entergy Louisiana will no longer offer net metering to its customers because it has exceeded the 0.5% aggregate cap. New customergenerators will be able to sell electricity at the avoided cost rate, through a buy-all, sell-all agreement.

Docket No. R31417


Beginning February 1, 2016, Southwestern Electric Power Company will no longer offer net metering to its customers because it has exceeded the 0.5% aggregate cap. New customer-generators will be able to participate in a net billing arrangement in which customers selfconsume electricity produced by their system and receive a credit at the utility’s average avoided cost rate for any electricity exported to the grid.

Docket No. R31417


In July 2015, the Senate passed a bill that eliminates the state’s aggregate cap on net metering. This bill also permits the Department of Public Utilities to adjust the distribution portion of the net metering credit for systems consuming less than 67% of their generation on-site beginning in 2017. The House and Senate did not concur on amendments proposed during Q4, and the Senate substituted a new text for the bill (S. 2058) in November 2015. No further action occurred during Q1 2016. [In April 2016, a compromise net metering bill was enacted. This will be covered in the Q2 2016 report.]

S.B. 1979


In November 2015, the House approved changes to H.B. 3854. This bill would increase the aggregate net metering cap by 2% for public and private projects, and reduce the net metering credit rate for large-scale solar to the wholesale rate. This bill also authorizes utilities to institute a minimum bill after approval is granted in a Department of Public Utilities hearing. No further action occurred during Q1 2016. [In April 2016, a compromise net metering bill was enacted. This will be covered in the Q2 2016 report.]

H.B. 3854

Net Metering Rules

H.B. 440 would amend net metering regulations by requiring electric companies to issue final approval within 20 days of completion of the installation process and submission of paperwork. It requires electric companies

H.B. 440

S.B. 2058


to interconnect at least 90% of the installation processes completed during the year. ME

Net Metering Rules, RealTime Excess Generation

The Maine Public Utilities Commission opened a docket in July 2015, pursuant to L.D. 1263, to investigate the potential for an alternative to net metering in the state. The Commission convened a stakeholder group to discuss this alternative in 2015, and submitted its final report to the legislature in February 2016. While the group reached a consensus on many aspects of the net metering alternative, there were several important areas of stakeholder disagreement. The report recommends a net billing approach, where self-consumption is allowed and all exports to the grid are credited at a specified rate. This rate would step down over time as aggregate capacity goals are reached. The initial credit rate was a point of disagreement between stakeholders, with stakeholder positions ranging from 10 cents/kWh to 18.5 cents/kWh. Customers would also enter into 20-year contracts to receive this fixed rate for grid exports.

Docket No. 2015-00218 Solar Stakeholder Report L.D. 1649

In February 2016, a bill was introduced that would adopt the market-based solar policy design agreed upon in the stakeholder process. The credit rate for grid exports would be determined by the Public Utilities Commission (PUC), and prior net metering customers would be grandfathered for twelve years from the effective date of the new PUC rules. The bill was passed out of committee 7-5 in March 2016 with Democrat committee members supporting, and Republican members opposing the bill. MS

NH


H.B. 1139 provides that the Public Service Commission (PSC) can require co-ops to adopt net metering or energy efficiency programs, but the PSC may not establish level of expenditures, compensation, or credits for these programs. The bill changes the recently adopted net metering regulation in the state that requires all electric utilities in the state to offer net metering and compensate customers at the avoided cost rate plus a premium of 2.5 cents/kWh.

H.B. 1139


In January 2016, a number of solar advocates and the South Mississippi Electric Power Association (electric cooperative association) filed separate petitions for rehearing of the Public Service Commission’s recently adopted net metering regulation.

Docket No. 2011-AD-2

Net Metering Rules

In July 2015, the New Hampshire Public Utilities Commission (PUC) began an investigation into the interconnection queue process for net-metered customer-generators, following a recommendation from the staff of the Sustainable Energy Division of the PUC. The PUC approved a set of procedures in March 2016,

Docket No. DE 15-271 Order No. 25,874


and the state’s IOUs have 30 days from the date of the Order to implement these procedures.

NJ

NV

Aggregate Cap, Net Metering Rules

In March 2016, the New Hampshire House passed H.B. 1116, which would increase the state’s net metering aggregate cap from 50 MW to 100 MW. This bill also directs the Public Utilities Commission to initiate a proceeding to develop alternative net metering tariffs. The Commission is to consider the costs and benefits of customer-generator facilities, the avoidance of unjust and unreasonable cost shifting, rate effects on all customers, alternative rate structures, automatic rate adjustment mechanisms to recover lost revenue, system size limits, whether there should be an aggregate cap, and administrative processes required. Current net metering tariffs would be available until the end of December 2040.

H.B. 1116

Aggregate Cap, Net Metering Rules

In February 2016, the New Hampshire Senate passed S.B. 333, which would increase the state’s net metering aggregate cap from 50 MW to 75 MW. This bill also directs the Public Utilities Commission to initiate a proceeding to develop alternative net metering tariffs. The Commission is to consider the costs and benefits of customer-generator facilities, rate effects on all customers, alternative rate structures, automatic rate adjustment mechanisms to recover lost revenue, system size limits, whether there should be an aggregate cap, and administrative processes required. Current net metering tariffs would be available until the end of December 2040.

S.B. 333

Net Metering Rules

In March 2016, the New Jersey Board of Public Utilities (BPU) published its proposed amendments to the renewable portfolio standard and the Solar Act in the New Jersey Register. Among other solar carve-out and SREC changes, the proposed amendment expands SREC eligibility to apply to grid supply projects, which previously was restricted to net-metered projects. The BPU is seeking public comment until May 2016.

Docket No. Q015040477 (Docket not publicly accessible)

In February, the Nevada Public Utilities Commission issued a proposed order in response to petitions for reconsideration of its December order approving new successor tariffs to net metering. The new proposal extends to 12 years the period of transition from NEM1 rates to NEM2 rates, with rates adjusting every 3 years beginning January 1, 2016. The new NEM1 transition rates will be determined during the preceding general rate case for each period. NEM1 transition rates will stay with the system in the case of a home sale or move. The Commission denied requests to grandfather existing net

Dockets No. 15-07041 and 15-07042

Net Metering Rules, RealTime Excess Generation

Proposed Amendments in published in the NJ Register


metering customers into NEM1 rates. In addition, a prosolar coalition filed a referendum for voter approval to restore the previous net metering policies. In March 2016, a district court judge ruled the referendum actually qualifies as an initiative, which must go through the legislature before going to voters. NY

OH


In September 2015, several stakeholders petitioned the New York Public Service Commission (PSC) to change the way the true-up date for net excess generation credits is currently assigned to residential net-metered PV customers. Net-metered customers currently have a one-time option to select the date on which their excess credits are cashed out each year at the wholesale rate. In January 2016, the PSC rejected the petitioner’s argument; however, it ordered the utilities to provide additional outreach and education to assist customers in making an informed decision when selecting an anniversary date. It also required Orange and Rockland utility to revise its tariff or justify its current annual cash out payment method. In February 2016, the PSC approved Orange and Rockland’s request for extension to file a revised tariff until May 2, 2016.

Docket No. 15-E-0572

Aggregate Cap

In October 2015, the New York Public Service Commission (PSC) denied the Orange and Rockland Utility’s petition to cease offering net metering once the 6% net metering aggregate cap was met. The PSC ordered all New York utilities to continue accepting applications regardless of the cap until the issue of net metering is ultimately addressed as a part of the New York Reforming the Energy Vision (REV) process. In November 2015, the IOUs in New York petitioned the PSC for rehearing of the order. The utilities argued that the statute provides the PSC only limited authority to increase the net metering cap, not eliminate it altogether. The PSC subsequently filed a Notice of Proposed Rulemaking. Comments were due by January 25, 2016.

Docket No. 15-01526/15E-0407


A.B. 3096 provides that excess generation be credited indefinitely or used as a credit against any electric charges. It allows the customer to be reimbursed every 5 years for excess generation at the utility’s avoided cost rate.

A.B. 3096

Net Metering Rules

Net metering rules have been before the Ohio Supreme Court since July 2014. AEP Ohio alleges that the net metering rules issued by the Public Utilities Commission of Ohio (PUCO) illegally require payments to be made to customer-generators for electricity not generated by the company. PUCO submitted a joint status report, and the court extended the briefing schedule for a seventh time in February 2016.

Ohio Supreme Court Case 2014-1290 “Net metering in the spotlight” 5


Net Excess Generation, Net Metering Rules, System Size

The Public Utilities Commission of Ohio proposed new net metering rules in November 2015. Parties commented on the proposed rules in January 2016. The proposed rules stipulate that excess generation credits are carried forward for 36 months. Utilities are no longer required to pay out a monetary sum for net excess generation, but they “may offer a net metering contract at any price, rate, or manner of credit for excess generation.” System sizes are limited to 125% of annual demand. Additionally, the new rules include special provisions for hospitals that net meter.

Docket No. 12-2050-ELORD

PA

Net Excess Generation, System Size

In February 2016, the Pennsylvania Public Utility Commission published final rules amending its Alternative Energy Portfolio Standard (AEPS) and net metering rules. Changes to the AEPS include increasing the capacity limit to qualify as a distributed resource from 2 MW to 5 MW and adding the definition of a microgrid. The rule also amends the net metering rules by increasing the size limit for onsite generation from 110% to 200% of the customer’s annual electric consumption. The rule also compensates all excess generation at the retail rate at the end of the annual period, instead of the weighted average price. The rules will be effective after review by appropriate government offices and publication in the Pennsylvania Bulletin.

Docket No. L20142404361

RI

Net Metering Rules

S.B. 0081, enacted in June 2015, requires the Rhode Island Public Utilities Commission (PUC) to consider rate design and cost allocation among rate classes, taking into account the effects of net metering and increasing distributed energy resources. National Grid filed a revenue neutral cost-of-service study and proposed new rates for customers. In January 2016, the PUC approved National Grid’s request to withdraw their rate change filing, as it was determined that no rate revision was required at the time.

S.B. 0081

System Size

H.B. 7006 increases the net metering system capacity limit from 5 MW to 10 MW. The bill also prohibits electric distribution companies from charging unreasonable interconnection fees for renewable energy projects.

H.B. 7006

Aggregate Cap, Net Excess Generation, Net Metering Rules, RealTime Excess Generation

In February and March 2016, the Vermont Public Service Board (PSB) released revised versions of their draft net metering rules. The most recent version of the rules would monetize both production and consumption before netting the two. Production would not be credited against any charges other than a customer’s kWh consumption charge. Any excess production credit at the end of the billing period would be carried forward for 12 months.

Proposed Net Metering Rules

VT

Docket No. 4545

Production value is determined by multiplying the total kWh produced during the billing period by the blended residential retail rate plus or minus any credit adjustors.


The rules include a 1 cent/kWh adder for systems 15 kW and less, as well as systems up to 150 kW that are sited on structures with a primary purpose other than generating electricity, on brownfields, on landfills or former leach fields, over parking lots, in the disturbed portion of gravel pits, or in a “locally preferred” site as determined by the host municipality. Systems over 15 kW and up to 150 kW that are not located on any of the sites listed above would be subject to a 2 cent/kWh negative credit adjustor, and systems over 150 kW and up to 500 kW that do not meet the siting criteria listed above would be subject to a 3 cent/kWh negative credit adjustor. RECs would be transferred to the utility unless the customer elected to keep them. If a customer decided to transfer their RECs to the utility, they would receive a 3 cent/kWh adder, and if a customer elected to keep their RECs, their credit rate would be reduced by 3 cents/kWh. All positive credit adjustors would be available for ten years from a system’s commissioning, and all negative credit adjustors would remain in place for the life of the system. REC and siting adjustors would be updated biennially. The rules would also allow utilities to require energy efficiency audits for customers seeking to install a netmetered system if they are a commercial or industrial customer, or a residential customer with a historic energy consumption of 750 kWh or more per month. There is no aggregate cap included in the proposed rules, and existing net metering customers would be grandfathered in for a period of 20 years from the date of their system’s commissioning. The PSB filed the Proposed Rule with the Secretary of State in March 2016, and two public hearings will be held in May 2016. Aggregate Cap, In November 2015, Green Mountain Power (GMP) Net Metering received sufficient interconnection requests to exceed its Rules aggregate cap. GMP requested permission from the Public Service Board to offer net metering above this cap and is awaiting a decision. In the meantime, GMP notified the Board that they will reject applications above 15 kW until the Board makes a decision on the request to continue offering net metering above the cap. The Board issued an order stating that they will suspend review of applications above 15 kW in GMP service territory until a decision is reached. In March 2016, the Board issued a procedural order requesting further information from GMP, and GMP provided its response. The deadlines for comments and response comments are in April 2016.

Order Staying Review of Certain Net Metering Applications Docket No. 8652: Procedural Order


DISTRIBUTED SOLAR VALUATION STUDIES Key Takeaways:  

In Q1 2016, eleven states, as well as D.C., took action to study the costs and benefits of net metering or the value of distributed generation. A total of 28 states have conducted these studies or investigations relating to the value of distributed generation since the beginning of 2015.

In Q1 2016, eleven states and D.C. conducted some type of action to determine the value of distributed generation. Notably, Connecticut moved further down the path towards developing its solar methodology that will be used for future ratemaking. In Arizona, a new study filed by The Alliance for Solar Choice and conducted by Crossborder Energy found the benefits of distributed solar to equal 18.7 cents per kilowatt-hour, excluding societal benefits. Several jurisdictions, including Pennsylvania and D.C., have initiated similar inquiries broadly categorized as grid modernization initiatives that could eventually lead to decisions about DER valuation.

Figure 5. Action on Distributed Solar Valuation and Net Metering Studies (Q1 2016)


Table 3. Updates on Distributed Solar Valuation and Net Metering Studies (Q1 2016) State

Description

AZ

The Arizona Corporation Commission (ACC) opened a generic docket to evaluate net metering issues in 2013. In response to Arizona Public Service’s request to re-examine net metering cost shifts, the ACC ruled in October 2015 that issues of cost of service and the benefits of distributed solar should be evaluated in the generic docket. All Arizona electric utilities were joined as parties to the docket. In February, The Alliance for Solar Choice filed a study conducted by Crossborder Energy, which found that the average benefits of residential distributed solar in Arizona Public Service Company territory to be 28 cents/kWh including societal benefits (18.7 cents/kWh excluding societal benefits.) The study also found the median participant cost to be 17 cents/kWh and the cost to nonparticipants to be 17.9 cents/kWh. An evidentiary hearing is scheduled for April 2016.

Docket No. E00000J-14-0023

In February 2016, Arizona Public Service Company -- an intervenor in UNS Electric’s rate case -- submitted a study conducted by Navigant Consulting evaluating project returns for third-party owned solar. The study concluded that returns are such that providers have room to adjust to reductions in net metering compensation, rate increases to net metering customers, or both.

Docket No. E04204A-15-0142

CT

In February 2016, the Public Utilities Regulatory Authority initiated a new docket to conduct a full Cost of Service Study (COSS) and rate design review to establish a standardized methodology for electric distribution companies to use. The review will be conducted in two phases – Phase I addressing the COSS and Phase II addressing rate design. The docket does not include any solar-specific language, but the rate design study could include effects of DG resources.

Docket No. 16-02-30

DC

In June 2015, the DC Public Service Commission initiated Proceeding FC 1130 to identify technologies and policies to modernize and increase the sustainability, reliability, and efficiency of the electric grid. Diverse stakeholders, including electric utilities, have provided their perspectives including the issues faced by distributed energy resources on the grid. The third workshop of this series is scheduled for April 27, 2016.

F.C. 1130

GA

As part of Georgia’s 2016 integrated resource planning process, the Georgia Public Service Commission engaged stakeholders in a process to explore the valuation of distributed renewable energy. The final report categorizes various distributed generation components as costs, benefits, or location-dependent.

Docket No. 39732

In January 2014, the Iowa Utilities Board (IUB) issued an order commencing an inquiry into issues surrounding DG, including possible changes to net metering and interconnection rules. In October 2015, the IUB declined to issue a policy goal on distributed renewable generation and decided against a cost-benefit analysis at this time due to the relatively small amount of DG in Iowa presently. Instead, the IUB required Iowa’s two IOUs, MidAmerican

Docket No. NOI2014-0001

IA

Source

Crossborder Energy Study

Navigant Study

Order No. 39723


and Interstate Power and Light (IP&L), to propose distributed generation pilot projects in a Preliminary Implementation Plan within 90 days to gather data on issues that potentially include net metering system size limits and net excess generation credits. The Board will consider changes to DG rate design in future meetings, including the implementation of a demand charge by MidAmerican on DG customers. In March 2016, MidAmerican and IP&L filed their proposed pilot projects. KS

In March 2016, the Kansas State Corporation Commission filed a motion to request a general investigation of issues related to rate design for DG customers. This investigation was prompted by the determination in Westar’s last rate case that such an investigation should be conducted.

Docket No. 16GIME-403-GIE

MT

Senate Joint Resolution 12, passed in the 2015 legislative session, requires the Montana Legislature’s Energy and Telecommunications Interim Committee (ETIC) to study the costs and benefits of net metering. At its January 2016 meeting, the ETIC heard comments on net metering economic impacts, revenue regulation and decoupling, and cooperative net metering rates. The ETIC has also received additional reports and comments on economic development, costs and benefits, and rate designs across different states. The ETIC met in March 2016 to discuss the scope of the net metering study and whether to pursue changes to existing net metering policy and definition.

Energy and Telecommunications Interim Committee

NY

In January 2016, the Public Service Commission approved Benefit Cost Analysis (BCA) framework to evaluate utility expenditures in investments in a Distributed System Platform, DERs, procurement of DERs, and energy efficiency programs. The BCA framework supports implementation of DERs and alternative resources. The Order requires utilities to develop BCA handbooks to guide DER providers along with their Distributed System Implementation Plan filings due at the end of June 2016.

Docket No. 14-M0101

OR

The Public Utility Commission of Oregon (PUC) opened a docket in January 2015 to determine the resource value of solar. The PUC will use the results of this investigation in reports to the legislature under H.B. 2893 (2013) and H.B. 2941 (2015) if results are ready by those statutory deadlines. The investigation will include three aspects: (1) the resource value of solar (RVOS), (2) net metering cost shifts, and (3) reliability impacts. After a workshop in January 2016, the PUC voted to close the investigation on solar’s reliability impacts and instead will open a docket to pursue a smart inverter standard later in the year. The PUC also decided to not pursue Investigation 2 (cost shifting in net metering) until the RVOS under Investigation 1 is calculated.

Docket No. UM 1716

PA

In December 2015, the Pennsylvania Public Utility Commission initiated a proceeding seeking information about the efficacy and appropriateness of alternative ratemaking methods, such as revenue decoupling. The proceeding is more focused on the effects of ratemaking on energy efficiency and conservation methods, but

Docket No. M-20152518883

Staff Proposal on DSIP


some of the public comments received include impacts on distributed generation resources. RI

In January 2016, the Public Utilities Commission (PUC) approved National Grid’s request to withdraw its proposed alternative rate design. However, the PUC determined that it was important to continue to review the issues raised in the proceeding. In March 2016, the PUC opened a docket to identify and measure the costs and benefits of net metering and DERs.

Docket No. 4600

UT

In August 2014, the Utah Public Service Commission (PSC) opened a docket to review the costs and benefits of Rocky Mountain Power’s net metering program. The PSC issued an order in early November accepting a framework for assessing net metering costs and benefits. The framework will utilize a comparison between a cost of service study assuming no net metering customers and the results of a cost of service study that does include net metering customers. The utility must file the two studies no later than the date it files its next general rate case. The PSC rejected a petition for clarification and review or rehearing from a group of solar advocates and companies in December. Rocky Mountain Power has not yet filed its next general rate case.

Docket No. 14-035114


COMMUNITY SOLAR POLICY Key Takeaways:  

In Q1 2016, seven states considered changes to state community solar policy or community solar programs arising from state policy Fourteen states and D.C. have policies establishing community solar programs.

Community solar programs are gaining traction as a way to meet the needs of customers who wish to utilize solar energy but do not have the physical, financial, or situational ability to install rooftop panels on their own home. In the first quarter of 2016, seven states considered, amended or clarified rules governing community solar programs. Meanwhile, several utilities have submitted proposals for new community solar offerings without statewide rules or requirements.

Figure 6. Action on Community Solar Policy (Q1 2016)

The law that expanded Oregon’s renewable portfolio standard also establishes a community solar program for the state. The legislation sets basic criteria and directs the Public Utilities Commission to establish the rules for the program, which must require utilities to enter into 20 year power purchase agreements with certified projects and incentivize customers to participate while minimizing cost shifts and financial burdens. Maine’s comprehensive solar bill under consideration includes a procurement target of 45 MW of large-scale community solar under a


competitive solicitation process. Other states continue to carry out and fine tune community solar programs: Minnesota and Colorado have been addressing specific programmatic issues in rate design and REC pricing, while Hawaii, New York, and Maryland are finalizing tariffs and beginning the initial stages of programs.

Box 4. What is Community Solar? Community solar refers to a voluntary program for customers where a solar PV system “provides power and/or financial benefits to, or is owned by, multiple community members.” 6 While some community solar projects share similarities with utility-scale solar projects (e.g., large in size, located off-site from consumption, ground-mounted systems, utility-side of the meter), this report treats it as a type of distributed solar, as it is community-focused and allows residential customer participation. The White House hosted a National Community Solar Summit in November 2015 with “68 cities, states and businesses working together to increase access to solar for all Americans.” The event brought together leaders in community solar to share best practices, develop new financing arrangement and business models, create new approaches to customer acquisition and outreach, and engage multifamily dwelling units.


Table 4. Updates on Community Solar Policies (Q1 2016) State

Description

Source

CO

Xcel Energy is authorized under a Public Utilities Commission (PUC) order to develop up to 90 MW of community solar through competitive solicitations. In the 2015 request for proposals, multiple community solar developers bid negative prices for RECs associated with the projects. In February 2016, Xcel reached a compromise agreement with developers that includes a standard offer for RECs at $0.03/kWh. The settlement was rejected by the PUC.

Proceeding 13A0836E

HI

S.B. 2010, enacted in May 2015, allows any person or entity to “own or operate an eligible community-based renewable energy project.” The bill requires utilities to file community renewable energy tariffs with the Hawaii Public Utilities Commission by October 1, 2015. In Q1 2016, the Commissioner of Securities at the Hawaii Department of Commerce and Consumer Affairs wrote a letter cautioning that “security-related issues may arise” from the tariff depending upon its final structure.

S.B. 2010 Order No. 33086 Docket No. 20150382 Dept. of Commerce & Consumer Affairs Letter

MD

In November 2015, the Maryland Public Service Commission (PSC) published draft regulations on how the Community Solar Pilot Program would be implemented in the state. The Community Solar Pilot Program was enacted by the state legislature in May 2015. In February 2016, the PSC published final regulations to establish the pilot program, with emphasis on providing benefits for low and moderate income customers. The regulations will be published in the Maryland Register and will be open for public comment for 30 days after their initial publication.

Rule Making (RM56)

ME

Maine’s solar stakeholder process to investigate an alternative to net metering also looked at the treatment of large-scale community solar projects within this alternative framework. L.D. 1649, introduced in February 2016, would adopt the market-based solar policy framework recommended in the stakeholder group’s final report. This bill would set the state’s procurement target for large-scale community solar at 45 MW by 2022, and would implement a competitive solicitation process for procurement. Utilities are allowed to collaborate with project sponsors in a “nondiscriminatory manner to increase customer participation.” Allowed modes of collaboration include providing customer education, leasing utility-owned land, jointly advertising projects, assisting with customer outreach and acquisition, and administering programs. The bill was passed out of committee in March 2016.

Docket No. 201500218

In December 2015, Northern States Power Company d/b/a Xcel Energy filed revised solar-garden tariffs reflecting the program changes specified by the Minnesota Public Utilities Commission (MPUC) orders from August and December. Written comments are due April 1, 2016, on whether the MPUC should modify the subscriber-bill-credit rate design (e.g., if the MPUC should replace the Applicable Retail Rate with the Value of Solar Rate) and what actions, if any, the MPUC

Docket No. 13-867

MN

Solar Stakeholder Report L.D. 1649


should take to encourage residential, low-income, and minority participation in the community solar program. As of Q1 2016, stakeholders are continuing to file comments. NY

In July 2015, the New York Public Service Commission (PSC) issued an order establishing community net metering in the state. Implementation of the program is divided into two phases. The first phase of the program began in October 2015 and will last until April 30, 2016. During this period, the projects will be limited to siting distributed generation in areas where it provides the greatest locational benefits to the larger grid and in areas that promote low-income customer participation. The second phase will begin in May 2016, when the community net metering projects will be fully implemented throughout utility service territories. The proceeding continues with utilities proposing tariffs and other recommendations for implementing the program. The PSC staff is set to file a report on the development of means to encourage low-income participation in community distribution programs by April 2016.

Case 15-E-0082

OR

Through Docket No. UM 1746, Oregon’s Public Utility Commission (PUC) submitted a report to the legislature in late October with recommendations for how to design a community solar program. D.B. 1752 was introduced in January 2016 and would establish a community solar program. The bill followed several recommendations from the PUC’s report, and defers to the PUC to adopt rules for the program. The bill did not make it out of the Bills Committee during the 2016 legislative session, which adjourned March 3rd.

Docket No. UM 1746 S.B. 1572


FIXED CHARGES Key Takeaways:   

In Q1 2016, 26 utilities (27 actions) in 18 states had pending or decided proposals to increase residential fixed charges. The median proposed fixed charge was $13.44, with the median existing fixed charge for these utilities being $7.74. The median increase requested was $4.84, and the median percentage increase was 55%.

Twenty-six utilities in 18 states had proposals to increase fixed charges on residential customers pending or decided in Q1 2016. Among the seven decisions made this quarter, three utilities were not granted any increase, two were granted their full requested increase, and two were granted an increase below their requested amount.

Figure 7. Proposed Increases to Residential Fixed Charges (Q1 2016)

The utilities requesting the most significant increases were: (1) National Grid – MA ($11.00; 275%); (2) Dayton Power Light ($9.48; 223%), (3) Xcel Energy – CO ($13.59; 201%), (3) Public Service Company of New Mexico ($8.14; 163%); and (5) National Grid – RI ($8.00; 160%). Four of these requests were pending at the end of Q1 2016. National Grid withdrew its request during Q1.


Table 5. Updates on Increases to Residential Fixed Charges (Q1 2016) State

Utility

Monthly Residential Fixed Charge Existing

Proposed

Approved

Description

Source

AR

Entergy Arkansas

$6.95

$9.00

$8.40

In March 2016, the Arkansas Public Service Commission approved a joint settlement agreement in Entergy Arkansas’ request for a general rate increase.

Docket No. 15-015-U

AZ

UniSource Energy Services (UNS Electric)

$10.00

$20.00

Pending

In May 2015, UniSource Energy Services (UNS) proposed an increase in its residential monthly fixed charge. The rate case also proposes a demand-based rate mandatory for solar customers and changes to its net metering tariff. A hearing and public comment sessions were held in March 2016.

Docket No. E-04204A15-0142

Tucson Electric Power

$10.00

$20.00

Pending

In November 2015 Tucson Electric Power proposed an increase in its residential monthly fixed charge. The rate case also proposes a demand-based rate mandatory for solar customers and changes to its net metering tariff. A hearing is scheduled for August 2016.

Docket No. E-01933A15-0322

Xcel Energy

$6.75

$20.34

Pending

In January 2016, Xcel Energy proposed a new structure for its electric rates. The proposal for residential service decreases the “Service and Facilities Charge” from $6.75 to $5.78 and adds a Grid Use charge that varies based on usage: 0200kWh = $2.62; 201500kWh = $7.76; 5011000kWh = $14.56; 10011400kWh = $25.69; 1401kWh+ = $44.79. A

Proceeding 16AL0048E

CO


prehearing conference has been set for April 2016. FL

Florida Power and Light

$7.87

$10.00

Pending

Florida Power and Light proposed a residential fixed charge increase in Q1 2016.

Docket No. 160021

IN

Northern Indiana Public Service Company

$11.00

$20.00

Pending

In October 2015, Northern Indiana Public Service Company proposed an increase in its residential monthly fixed charge. In February 2016, the parties filed a settlement agreement with a fixed charge of $14.

Docket No. 44688NONE

Indianapolis Power and Light

$6.75 (up to 325 kWh per month) $11 (>325 kWh per month)



In December 2014, Indianapolis Power and Light proposed an increase in its residential monthly fixed charge. In March 2016, the Indiana Utility Regulatory Commission issued a final order approving the fixed charge increase.

Docket No. 44576 NONE

National Grid (Massachuse tts Electric Company and Nantucket Electric Company)

$4.00

Phase I: $5.50; Phase II: $15.00

Pending

In November 2015, National Grid (MA territories) proposed a two-phased an increase in its residential monthly fixed charge. The Phase I increase will be effective pursuant to the Department of Public Utilities’ final order, and the Phase II increase and implementation of a tiered customer charge will be effective no earlier than six months after Phase I changes are effective. The Phase II tiers are: $6.00 for customers using 1-205 kWh, $9.00 for customers using 251-600 kWh, $15.00 for customers using 6011,200 kWh, and $20.00 for customers using over 1,200 kWh.

Docket No. 15-155

MA


Baltimore Gas & Electric

$7.50

$12

Pending

In November 2015, Baltimore Gas & Electric filed for a fixed charge increase.

Docket No. 9406

SMECO

$8.60

$13.44

$9.50

In February 2016, the Maryland Public Service Commission approved a settlement agreement, increasing SMECO’s residential fixed charge from $8.60 to $9.50. New rates are effective March 2016.

Docket No. 9396

Consumers Energy

$7.00

$7.75

Pending

In March 2016, Consumers Energy requested rate increases that include an increase in the residential system access charge from $7.00 to $7.75.

Case U17990

DTE Electric

$6.00

$9.00

Pending

In February 2016, DTE filed a general rate case, which includes an increase in the basic residential service charge from $6.00 to $9.00. DTE plans to selfimplement the rate increase by August 2016 pending a Public Service Commission decision, which is required by February 2017.

Case U18014

Upper Peninsula Power Co (UPPCO)

$12.00

$15.00

Pending

In September 2015, UPPCO proposed an increase in the residential monthly service charge from $12.00 to $15.00. A final decision is expected by June 2016.

Case U17872

MN

Northern States Power Company

$8.00

$10.00

Pending

In November 2015, Northern States Power Company d/b/a Xcel Energy proposed an increase in its residential monthly fixed charge.

Docket No. 15-826

MO

Kansas City Power & Light Greater Missouri Operations

$9.54/$1 0.43

$14.50

Pending

In February 2016, KCP&L GMO requested an increase in its residential fixed charge. The rate case includes merging two previously separate rate

Docket No. ER-20160156

MD

MI


(KCP&L GMO)

jurisdictions; the two areas currently have different fixed charges.

MT

MontanaDakota Utilities

$5.40 *

$7.50 *

$5.40

In June 2015, MontanaDakota Utilities (MDU) proposed a residential monthly fixed charge increase. In February 2016, MDU and the parties entered into a stipulation agreement that includes no fixed charge increases for residential and small commercial customers. (The agreement does include an adjustment in energy charges.) The Commission approved the agreement in March 2016.

Docket No. D2015.6.51

NM

El Paso Electric

$7.00

$10.00

Pending

In May 2015, El Paso Electric proposed a residential monthly fixed charge increase. The Hearing Examiner recommended an increase to $9.00 in the Recommended Decision filed in February 2016.

Docket No. 15-00127UT

Public Service Company of New Mexico

$5.00

$13.14

Pending

In August 2015, the Public Service Company of New Mexico (PNM) refiled a rate case, proposing increasing its residential monthly fixed charge. In May 2015, the New Mexico Public Regulation Commission rejected this proposal on grounds of incompleteness of PNM’s previous rate filing that featured a monthly solar charge and an increased fixed charge.

Docket No. 15-00261UT

New York State Electric & Gas

$15.11

$18.89

Pending

In May 2015, New York State Electric & Gas proposed an increase in its residential monthly fixed charge. The evidentiary hearing has been postponed to March 2016.

Docket No. 1501092/15E-0283

NY


Rochester Gas & Electric OH

$21.38

Dayton Power $4.25 and Light

$26.73

Pending

In May 2015, Rochester Gas & Electric proposed a residential monthly fixed charge increase.

Docket No. 1501094/15E-0285

$13.73

Pending

In Q4 2015, Dayton Power and Light filed to increase fixed charges and reduce variable charges for a reported average monthly bill increase of $4.07 to begin in January 2017. Parties commented in Q1 2016.

Case No. 15-1830EL-AIR

Docket No. 500274

“DP&L Seeks Electric Rate Increase”

OK

Oklahoma Gas and Electric

$13.00

$26.54

Pending

In December 2015, Oklahoma Gas and Electric applied to increase its residential fixed charge and add a demand charge for residential and small commercial customers.

RI

National Grid

$5.00

$13.00

$5.00

In August 2015, National Docket No. Grid filed its rate design 4568 which includes a framework to shift cost recovery from variable energy charges to fixed charges. The proposal includes a four-tier customer charge based on the customer’s electric consumption. The tiers are: $5.25 for customers using up to 250 kWh, $8.50 for customers using up to 750 kWh, $13.00 for customers using up to 1,200 kWh, and $18.00 for customers using over 1,200 kWh. In January 2016, the Public Utilities Commission approved National Grid’s request to withdraw their rate change filing as it was determined that no rate revision was required at this time.

TX

Southwestern Public Service Company

$7.60

$9.50

$9.50

In December 2014, Southwestern Public Service Company proposed a residential monthly fixed charge increase.

Docket No. 43695


$5.00

$10.00

Pending

In May 2015, El Paso Electric proposed a residential monthly fixed charge increase. In March 2016, a settlement agreement set the new fixed charge at $6.90 for non-DG customers. The settlement agreement is not yet approved, but most parties have agreed to it.

Avista Utilities $8.50

$14.00

$8.50

In February 2015, Avista Docket No. Utilities proposed a UE-150204 residential monthly fixed charge increase. The fixed charge increase was dropped under a settlement agreement reached in May 2015. The Commission issued a final order in January 2016, rejecting the original filed rate request and adopting, with some revisions, the settlement stipulation. The Commission found not only no need for increased electric revenues, but a decrease in revenue requirements, and therefore ordered a uniform percentage decrease across all schedules and energy blocks.

Avista Utilities $8.50

$9.50

Pending

In February 2016, Avista Docket No. proposed an increase in the UE-160228 residential monthly basic charge from $8.50 to $9.50 to be effective in 2017. A prehearing conference is set for October 2016.

El Paso Electric

WA

Docket No. 44941

* Denotes that the utility uses a daily fixed charge for residential customers instead of a monthly fixed charge. All daily charges are converted into monthly charges for this table using the following formula: [(365 days/year)*($[fixed charge]/day)]/(12 months/year) = $[fixed charge]/month. If the charge varies by kWh consumption, it is assumed that the customer uses 900 kWh.


SOLAR CHARGES Key Takeaways:  



In Q1 2016, eight utilities in five states had pending or decided proposals to adopt charges on residential solar customers Of these proposals, six were requests to add demand charges, with two proposals also including a higher fixed charge for solar customers. One proposal requested the addition of a standby charge, and one proposal increased the fixed administrative charge for certain solar customers. There were half as many pending or decided proposals to add or increase solar charges in Q1 2016 as there were in Q4 2015.

In Q1 2016, there were eight utility proposals to add or increase extra charges on residential solar customers pending or decided in five states. This number is down significantly from the 16 proposals across 11 states that were pending or decided during Q4 2015. Decisions were made on three proposals this quarter as part of the California Public Utilities Commission’s January 2016 net metering order. The Commission approved a net metering successor tariff, but did not authorize solar charges proposed by Pacific Gas & Electric, San Diego Gas & Electric, and Southern California Edison.

Figure 8. Proposed Charges on Residential Solar Customers (Q1 2016)

In North Carolina, Duke Energy Carolinas more than doubled its flat administrative charge for generators selling power under its buy-all, sell-all tariff for qualifying facilities. While this tariff


typically applies to large solar generators, customers participating in the NC GreenPower performance-based incentive program must sell their electricity under this tariff.

Box 5. Demand Charges, Standby Charges, & Flat Fees A demand charge is a charge that varies based on a customer’s maximum rate of energy consumption, or demand, during a billing period. A customer’s demand is measured in kilowatts (kW), and is typically calculated based on the average rate of energy consumption over a 15, 30, or 60 minute interval. The charge is then based on the interval with the highest average demand. Demand charges are common for commercial and industrial commercials, and are also frequently seen in conjunction with residential time-of-use rate schedules. A standby charge is a charge applied to customers with on-site generation, and is typically based on the capacity of the on-site generator. Standby charges are intended to compensate the utility for providing power when the on-site generator is not producing energy. Another type of solar charge is a flat monthly fee, sometimes called a grid access charge, which functions as a higher total fixed charge. Decisions are pending in Arizona, Oklahoma, and Texas, where four utilities are seeking approval of demand charges for solar customers. Oklahoma Gas and Electric’s proposal would add a demand charge to its residential time-of-use rate schedule. While this charge would apply to all customers taking service on that schedule, all customers with distributed renewable generation as of November 2014 are required to be on the time-of-use tariff.


Table 6. Updates on Residential Solar Charges (Q1 2016) Monthly Solar/DG Charge(s) State

Utility

Description Current

AZ

CA

Proposed

Source

Approved

UniSource Energy Services (UNS Electric)

$0

$6.00 per kW from 0-7 kW; $9.95 per kW for over 7 kW, based on the maximum 60-minute demand during the billing cycle

Pending

As part of its general rate case filed in June 2015, UniSource Energy Services (UNS) proposed a mandatory new rate design for “partial requirements customers,” including new users of solar. The new rate has a three-part structure including a monthly service charge, a demand charge, and volumetric energy charges. This rate is optional for standard residential customers.

Docket No. E-04204A15-0142


$0

$7.40 per kW from 0-7 kW; $11.90 per kW for over 7 kW, based on the maximum 60-minute demand during the billing cycle

Pending

As part of its general rate case filed in November 2015, Tucson Electric Power proposed a mandatory new rate design for “partial requirements customers,” including new users of solar. The new rate has a three-part structure including a monthly service charge, a demand charge, and volumetric energy charges. This rate is optional for standard residential customers.

Docket No. E-01933A15-0322

Pacific Gas and Electric

$0

$3 per kW, based on the maximum 60-minute demand during the billing cycle

$0

In August 2015, Pacific Gas and Electric (PG&E) proposed successor net metering tariffs pursuant to A.B. 327. PG&E’s proposal includes a demand charge with commensurately lower time-of-use energy charges. The California Public Utilities Commission’s January 2016 decision approved a successor net metering

Docket No. R1407002


tariff, but did not authorize the utility’s proposed solar charge.

NC

Southern California Edison

$0

$3 per KW of installed PV

$0

In August 2015, Southern California Edison (SCE) proposed successor net metering tariffs pursuant to A.B. 327. SCE’s proposal includes a Grid Access Charge based on the installed AC nameplate capacity of the system. The California Public Utilities Commission’s January 2016 decision approved a successor net metering tariff, but did not authorize the utility’s proposed solar charge.

Docket No. R1407002

San Diego Gas and Electric

$0

$9.19 per kW, based on the maximum 60-minute demand during the billing cycle, and a $20.54 fixed customer charge

$0

In August 2015, San Diego Gas and Electric (SDG&E) proposed successor net metering tariffs pursuant to A.B. 327. SDG&E’s proposal includes a Grid Usage Charge based on a customer’s demand, a fixed monthly System Access Fee, and a timeof-use rate for energy charges. The California Public Utilities Commission’s January 2016 decision approved a successor net metering tariff, but did not authorize the utility’s proposed solar charge.

Docket No. R1407002

Duke Energy Carolinas

$8.17

$19.91

$19.91

Duke Energy Carolinas increased the administrative charge on their Purchased Power tariff from $8.17 to $19.91. The Purchased Power tariff allows customers to sell energy at the avoided cost rate through a buy-all, sell-all agreement. Residential customers participating in

Docket No. E-100 Sub 140 Order Establishing Standard Rates and Contract Terms for Qualifying Facilities


the NC GreenPower performance-based incentive program are required to sell their production under this tariff. OK

Oklahoma Gas and Electric

$0

$2.68 per kW, based on the maximum 15-minute kW demand during the billing cycle

Pending

In July 2015, Oklahoma Gas and Electric proposed a new demand charge for its residential TOU tariff, which applies to all residential customers that became renewable DG customers after October 31, 2014. The proposal also includes a larger monthly fixed charge of $18 (compared to a fixed charge of $13 for customers on the nonTOU residential tariff).

Docket No. 500274

TX

El Paso Electric

$0

$3.89 per kW, based on peak demand, and a fixed charge that is $5 higher than for non-solar customers

Pending

In May 2015, El Paso Electric proposed a new tariff for residential solar customers, “Rate No. 3 Partial Requirement”. It includes a higher monthly fixed charge than for non-solar customers ($10) but lower energy (per-kWh) charges and a demand charge. In March 2016, a settlement agreement included a fixed charge of $11.00 for DG customers, which is reduced according to consumption. The final settlement has not yet been approved, but most major parties have agreed to it.

Docket No. 44941


THIRD-PARTY SOLAR OWNERSHIP Key Takeaways:   

In Q1 2016, seven states had active legislative or regulatory actions regarding the legality of third-party PPAs Third-party solar PPAs are allowed in at least 25 different states, D.C., and Puerto Rico (See Figure 10) Eight states prohibit third-party solar PPAs, and the legal status is unclear in 16 states

In March 2016, Utah enacted H.B. 244, becoming the 24th state to allow third-party PPAs for residential customers in the U.S. Previously, third-party PPAs were only allowed in Utah for nonprofits, governmental entities, and school districts; this bill expands the availability of third-party PPAs to residential customers of electric utilities that have more than 200,000 retail customers (i.e., Rocky Mountain Power).

Figure 9. Action on Solar Third-Party Ownership (Q1 2016)

The contentious battle in Florida between utility-backed Consumers for Smart Solar and solar advocate-backed Floridians for Solar Choice continued in the first quarter of 2016. Consumers for Smart Solar was able to receive the required signatures and approval from the Florida Supreme Court to place its amendment on the 2016 November General Election Ballot. The Floridians for Solar Choice initiative failed to receive sufficient signatures for inclusion of its amendment on the ballot. In 2015, a local non-profit in North Carolina, NC WARN, signed a solar PPA with a local church


and requested that the North Carolina Utilities Commission (NCUC) issue a declaratory ruling on the legality of the arrangement. Duke Energy requested that NCUC reject the arrangement and impose a fine on NC WARN for violating the law. NCUC issued its ruling in April 2016, declaring the arrangement illegal and maximum fine justifiable. However, the Commission opted not to impose any fines on NC WARN if they meet certain conditions. NC WARN stated that they will appeal the decision.

Figure 10. Third-Party Solar PPA Legality

Source: NCCETC7 Note: In February 2016, the Kansas Department of Revenue ruled that only a utility can sell power to a residential customer.

Vivint Solar received decisions from public utility commissions in New Hampshire and Delaware, where Vivint petitioned for a declaratory ruling to clarify whether the company offering third-party sales would be considered as a public utility. The New Hampshire Public Utilities Commission ruled that Vivint would not be regulated by as a utility, while the Delaware Public Service Commission denied to offer a clarifying answer. Given the broad scope of the topic, the DE Public Service Commission recommended resolving the issue through a formal rulemaking process. Note that Delaware already has existing solar companies that offer solar via third-party PPAs.


Table 7. Solar Third-Party Ownership Updates (Q1 2016) State DE

FL

Description

Eligible Sector(s)

In January 2016, the Delaware Public Service Commission (PSC) issued Order No. 8840, which denied Vivint Solar’s request for a declaratory ruling to resolve the issue of whether third-party sales and leases in Delaware are exempt from “public utility” status. Not having a status of “public utility” would mean that thirdparty owned systems would not be regulated by the PSC. Given the broad scope and interest in the topic, the PSC recommended resolving the issue through a formal regulatory rulemaking process rather than a declaratory ruling.

Residential

A utility-backed group called Consumers for Smart Solar has received the necessary signatures and judicial approval to put its solar ballot initiative on the November 2016 Florida ballot. The ballot initiative would add a solar-specific amendment to Florida’s state Constitution.

Residential, Commercial, Industrial (All)

NH

Docket No. 151358 Order No. 8840

Consumers for Smart Solar was founded in response to another ballot initiative aiming to legalize third-party sales for all Florida customers. This third-party sales initiative was launched by Floridians for Solar Choice in January 2015. The Floridians for Solar Choice initiative failed to receive sufficient signatures for inclusion on the ballot, apparently due to a financial dispute with a consulting firm hired to secure signed petitions.

NC

Source

“Florida Supreme Court approves language for utility-backed solar amendment” Consumers for Smart Solar Website Floridians for Solar Choice Website

In June 2015, nonprofit organization NC WARN submitted a request for a declaratory ruling to the North Carolina Utilities Commission regarding the organization’s proposed power purchase agreement with a church located in the state. North Carolina statute generally defines an entity selling electricity as a “public utility.” Comments were accepted throughout October 2015, and reply comments were then accepted until November 20, 2015. As of Q1 2016, the Commission has yet to issue a ruling.

Non-Profit Entities

In August 2015, Vivint Solar filed a petition with the New Hampshire Public Utilities Commission (PUC) for a declaratory ruling to clarify whether or not the company will be regulated as a public utility, competitive electric power supplier, or limited producer of electrical energy by offering residential third-party PPAs and solar leases. Vivint argued in its filing that it should not be regulated as any of these. The Commission issued an order in January 2016, ruling that neither Vivint nor any of its affiliates should be regulated as a public utility, competitive electric power supplier, or limited producer of electrical energy.

Residential

Docket No. SP100 Sub 31 NC General Statutes § 623(23)

Docket No. DE 15-303 Order No. 25,859


OH

UT

In response to a complaint about whether property management companies that sub-meter electricity and water services to tenants should be regulated as public utilities, the Public Utilities Commission of Ohio opened up a docket to determine whether it has legal jurisdiction over sub-metering. A ruling has yet to be made.

Sub-metered Residential Buildings

In March 2016, H.B. 244 was enacted, expanding the availability of third-party power purchase agreements (PPAs) to net-metered residential customers of an electrical corporation with more than 200,000 retail customers (Rocky Mountain Power.) Previously, only governmental entities, school districts, and 501(c)(3) non-profits were permitted to utilize third-party PPAs. These entities may still utilize third-party PPAs and do not need to be a customer of Rocky Mountain Power. However, except for residential customers, systems operating under a third-party PPA must be installed by the end of 2021, according to the new legislation.

Residential, Public Entities

Docket No. 151594-AU-COI “Three PUCO dockets to watch in early 2016” H.B. 244


UTILITY-LED ROOFTOP SOLAR PROGRAMS Key Takeaways:  

Utilities in three states had action on utility-led rooftop solar programs during Q1 2016. Only five states have seen action on utility-led rooftop solar programs since the beginning of 2015.

Utility-led rooftop solar programs are an emerging trend. In these programs, the utility owns rooftop solar installed on customer roofs, or is otherwise directly involved in the siting and installation of distributed solar. These programs provide an opportunity for utilities to participate directly in the distributed solar market. In Q1 2016, hearings were scheduled in New Mexico and Arizona to weigh the benefits of utility-led rooftop solar programs. Additionally, CPS Energy in Texas is reviewing applications from its pilot rooftop solar program, and has started a waiting list for new applicants.

Figure 11: Utility-Led Rooftop Solar Program Updates (Q1 2016)


Table 8. Updates on Utility-Led Rooftop Solar Programs and Policies (Q1 2016) State

Utility

Description

Source

AZ


TEP applied to expand the size of the program to an additional 1,000 applicants in a filing in July 2015. The program is currently limited to 600 customers, and TEP stated that they had 5,164 customers signed up as interested as of January 20, 2016. TEP is also petitioning to use the program to meet compliance obligations under the Renewable Energy Standard and Tariff. A public hearing is scheduled for April 2016.

Docket No. E01933A-15-0239

NM

El Paso Electric

In November 2015, the New Mexico Public Regulation Commission commenced an inquiry into the desirability of utility-owned distributed-generation facilities that serve specific retail customers. The inquiry was motivated by the recent approval by the Commission of a proposal by El Paso Electric to build a distributed generation facility on, and supply electricity for, Holloman Air Force Base. Generally utilities have not been allowed to undertake these projects due to concerns that they would advantage particular customers, and possibly lead to costs being passed to customers who gain no benefit from the projects. A prehearing conference is scheduled for April 2016.

Docket No. 1500355-UT

TX

CPS Energy

CPS Energy has started its SolarHostSA 10-MW pilot program, where CPS Energy will own the solar panels installed on residential and commercial customer rooftops and credit the customer $0.03 per kWh generated by the system. Austin-based installer PowerFin Partners will conduct the installations. There is no upfront cost for participating customers. As of April 2016, the program is no longer accepting applications, but is expected to reopen within the next few months.

SolarHostSA.com


Q2 2016 OUTLOOK Twenty-six states are expected to wrap up their legislative sessions during Q2 2016, so a number of decisions could be made on pending solar legislation in the coming months.8 North Carolina is the only state with a 2016 legislative session that has not yet convened.9 Among expected decisions are those on net metering bills in Maine, New Hampshire, and Massachusetts. Maine’s bill to adopt an alternative to net metering passed both the House and Senate in April 2016. However, a veto is expected from the state’s Governor, whose energy office has come out against the proposed net metering alternative. In New Hampshire, two similar bills that would increase the state’s aggregate cap on net metering and direct the Public Utilities Commission to develop new alternative net metering tariffs made headway during Q1. In early Q2, the bill with the higher cap increase (H.B. 1116, raising the cap to 100 MW) passed the Senate, and is now on its way to the Governor. After months of a legislative stalemate, Massachusetts also saw rapid action in early Q2, with a compromise net metering bill (H.B. 4173) passing both chambers and being signed by the Governor within one week. Net metering action is also expected in Vermont, where public hearings will be held on a proposed net metering successor policy. A net metering docket is also expected to be opened in Arkansas to evaluate whether or not to adopt additional fees for net metering customers. Overall, the trend of utilities reaching net metering aggregate caps and states reevaluating net metering policies is expected to continue. Compensation for real-time excess generation has proven to be the greatest area of scrutiny within net metering policies, with multiple states recently adopting or considering a move to net billing. In early Q2, the North Carolina Utilities Commission issued a declaratory ruling on NC WARN’s third-party solar PPA test case, ruling that the transaction does violate North Carolina law. The Commission decided not to impose any fines on NC WARN as long as they comply with certain conditions laid out in the order. Future legislative efforts to legalize third-party PPAs are likely to be seen. The trend of utilities requesting residential fixed charge increases has held steady over the past several quarters. There were 19 pending requests to increase residential fixed charges at the end of Q1 2016, and decisions may be seen on some of these during Q2. In April 2016, Huntsville Utilities in Alabama proposed a residential fixed charge increase, with the City Council rejecting the request one week later.10 There were also four pending requests to adopt solar charges at the end of Q1.


ENDNOTES 1

Cory Honeyman, Shayle Kann, MJ Shiao, Jade Jones, Austin Perea, Colin Smith, Benjamin Gallagher, Scott Moskowitz, Justin Baca, Shawn Rumery, Aaron Holm, & Katie O’Brien, U.S. Solar Market Insight 2015 Year in Review, GTM Research & Solar Energy Industries Association (SEIA), 2015, http://www.seia.org/sites/default/files/gMOip8F78iSMI2015YIR.pdf. 2

Honeyman et al., U.S. Solar Market Insight 2015 Year in Review.

Herman K. Trabish, “What Utilities Need to Know about Solar Growth after the ITC Extension,” Utility Dive, January 7, 2016, http://www.utilitydive.com/news/what-utilities-need-to-know-about-solar-growthafter-the-itc-extension/411139/. 3

4

North Carolina Clean Energy Technology Center (NCCETC), Database of State Incentives for Renewables and Efficiency Net Metering Map, 2015, http://ncsolarcenprod.s3.amazonaws.com/wpcontent/uploads/2016/02/Net_Metering_022016.pdf. Dylan Borchers, “Net Metering in the Spotlight,” Bricker & Eckler, May 13, 2015, http://www.bricker.com/people/dylan-borchers/insights-resources/publications/net-metering-in-thespotlight. 5

6 Jason

Coughlin, Jennifer Grove, Linda Irvine, Janet F. Jacobs, Sarah Johnson Phillips, Leslie Moynihan, & Joseph Wiedman, A Guide to Community Solar: Utility, Private, and Non-Profit Project Development, National Renewable Energy Laboratory, 2010, 2, http://www.nrel.gov/docs/fy11osti/49930.pdf. 7

NCCETC, Third-party Solar Power Purchase Agreement Policies Map, 2015, http://ncsolarcenprod.s3.amazonaws.com/wp-content/uploads/2016/01/3rd-Party-PPA_012016.pdf. 8

National Conference of State Legislatures, 2016 Legislative Session Calendar, March 22, 2016, http://www.ncsl.org/documents/ncsl/sess2016_3_22_2016.pdf 9

National Conference of State Legislatures, 2016 Legislative Session Calendar.

10

Lucy Berry, Huntsville City Council votes against electric utility increases in 2016, AL.com, April 15, 2016, http://www.al.com/news/huntsville/index.ssf/2016/04/post_138.html.
