Colorado PUC takes the next bite at Net Metering

On April 9, the Commissioners of the Colorado PUC held a three hour informational meeting with presentations from Xcel, the collective solar parties, the Colorado Energy Office, the Office of Consumer Council, and Western Resources Advocates. The outlines of the process will start to firm up in May, but the parties laid out some general ideas for process and substance in PowerPoint presentations before a packed house.

As a quick recap, remember that this matter spun off from the 2014 RES compliance docket at the motion of the Colorado Energy Office. Their argument was, essentially, that if the value of solar was going to be debated it should get its own hearing instead of being stuck in the compliance plan almost as a sideshow. The CEO argued that severing the issues would “increase transparency and allow stakeholders from across the state to participate in the dialog related to incremental costs, net metering incentives, and solar energy rates.” (CEO motion 21 Jan 2014) The commissioners deliberated on the motion at their weekly meeting on January 29 and granted that motion shortly thereafter with much hand wringing about the structure of the new proceeding.

In response to that hand wringing, the commissioners held this informational meeting with the parties directed to discuss their “recommendations on the substantive issues the Commission should address in this proceeding, objectives the Commission should meet, and the best procedures satisfying those objectives.” (Decision No. C14-0294 in proceeding 14M-0235E)

Xcel

Xcel started the afternoon out by suggesting that the commissioners allow the issue to be resolved with a utility application that “outlines the specific concerns of the utility and proposed resolution.” (Xcel’s filed presentation is here: PSCo) They then proposed a series of three roundtable discussions facilitated by PUC staff touching on grid services and the technical aspects of renewable resources; the legal and regulatory issues; and rate design/net metering/market based renewable costs. That process would be followed up with a utility application informed, presumably, by those discussions. Interestingly, Xcel was the first in the room to bring up the issue of grid separation and an inquiry generally into when that might be cheaper than providing services to these customers.

The Solar Parties

The combined solar parties, Vote Solar, The Alliance for Solar Choice, Colorado Solar Electric Industries Association, Solar Energy Industries Association, and Southeast Colorado Solar Coalition were next to present (the full presentation is here: Colorado Solar Industry Presentation). Speaking for the parties were Kevin Fox – the attorney representing The Alliance for Solar Choice – and Rick Gilliam of Vote Solar. The parties proposed that the methodology be set through formal workshops with an independent facilitator and a standard methodology. The second step would then be to have a 3rd party conduct another study starting with Xcel’s Colorado service territory and ensuring complete data transparency. Finally, the results from the methodology determined through that process and the data gathered through the study would be applied in all other rate cases and resource plans going forward. The solar parties presented on the fact that net metered systems are essentially a “behind the meter” issue that, aside from ensuring safety, is not the business of regulators. If a customer buys a highly efficient refrigerator or decides to keep all light fixtures on all the time, those are choices personal to that customer. If that customer then installs solar panels that change their demand and consumption of the utility provided electricity that is also a choice personal to the customer.

The Colorado Energy Office

The Colorado Energy Office’s Director Jeff Ackerman took the hot seat next and implored the commission to avoid doing another study (presentation available here: Colorado Energy OfficeThe issues considered need to be limited to the costs and benefits of PV; the boundary between tariff design and public policy; and whether a cost shift occurs with net metering. The Colorado Energy Office agreed that there is a role for workshops and informational meetings but that the cost and benefit factors need to be determined through rulemaking or a rate case. What the issues are and which litigated path should be taken is what should be determined through the workshop process. One of the major pushbacks from the Commissioners up to this point was a request for hard numbers from the parties. Commissioner Patton again pushed Mr. Ackerman to agree that the parties needed to start with hard numbers and let the PUC go from there. Mr. Ackerman responded generally that in order to determine the numbers, we need to start by figuring out the right questions. We need to determine the full range of benefits, including societal benefits, and determine over what time line those benefits are appropriately considered in this debate.

The Office of Consumer Council

The Office of Consumer Council took the conservative approach and suggested that the PUC not engage in roundtable discussions or workshops and use the regulatory structure already available to them (presentation available here: The OCC-s Recommendations Regarding Net Metering and Solar). The possibility that net metered customers would become their own class of customers with a separate tariff, as suggested by the OCC, seemed to gain some traction with the Commissioners, in particular with the point that net metered customers are currently treated neither like a generator nor a customer, but as a hybrid of the two. As a suggestion, the OCC offered that they be treated as generators when producing and retail customers when consuming.

Western Resources Advocates

Finally, the representatives from Western Resources Advocates presented (presentation available here: WRA). Even though it was at the end of a long afternoon, this presentation seemed to get the most interest from the Commissioners and all three were more engaged than they had been during the last few presentations. They recommend opening a rule making docket on the issues that are most contentious after determining the issues on which there is agreement. The parties need to consider the costs & benefits of PV and include the health, environmental, avoided regulatory compliance costs, etc. The workshop process can inform the notice of proposed rule making that will set the boundaries of the docket.

Two non-party presentations were heard by the Commissioners as well. Leslie Glustrom appeared on behalf of ratepayers in Xcel’s Colorado territory and touched on the Electric Commodity Adjustment Act, the escalating price of coal, and the profits enjoyed by Xcel and coal companies. Karey Christ-Janer discussed the expense of providing these programs and requested that the Commissioners keep that in mind as the process unfolds.

As far as opening day goes, it was a good first step. There appears to be some consensus that a roundtable discussion will help inform the inevitable litigation. The Commissioners remained engaged and thoughtful throughout much of the process but didn’t seem overly enthusiastic about the entire proposal of any one party, other than that perhaps of Western Resources Advocates. The issues that remain to be decided are, well, all of them. Will it be a roundtable process? Will Xcel be able to file their application and set the boundaries of the debate? Will, as the OCC prefers, the entire process take place within existing regulatory structure? If there is a roundtable discussion, who gets to participate, and who moderates?

Public comment is accepted in this matter until April 29th and all materials filed are available at the PUC website.

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