All posts by Meredith Roberts

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) Continue reading Colorado PUC takes the next bite at Net Metering

Worth watching at the CO PUC – upcoming hearing on DSM Docket 13A-0686EG

This case was originally filed June 17, 2013 and is a strategic demand side management issues matter. Demand Side Management (“DSM”) refers generally to policies that aim to reduce energy consumption overall (through energy efficiency and other programs) and moving certain loads from peak to off peak periods.

Value of Demand Side Management

Although taking the same consumption and moving it to a different time might not seem like it will make a huge difference in energy use and consumption, it’s a very important resource. Certain generating units called “peaking plants” (or “peakers” burning methane) operate only when there is a larger than usual demand for energy, such as a really hot day when everybody is running their air conditioners at the same time. In those instances, the peaking plant kicks on and saves the day. Peaking plants are more expensive to operate and are typically much less efficient than fossil baseload resources (if those resources are operating properly, but that’s another chapter). If there’s a large manufacturing plant that can temporarily suspend their operations or reduce their consumption in other ways to a large enough degree, Xcel won’t have to turn that peaker on at all. Peaking plants generally operate about 100 hours or less per year. By moving a large load from the middle of the day to the middle of the night when loads are lighter, we’re still using the same amount of energy, but it won’t come from that inefficient peaking plant. Energy efficiency and demand response are great programs that change the picture of energy consumption and can make a huge difference in reducing emissions stemming from fossil generation.

DSM Mandate

Xcel’s DSM program is in response to legislation passed in 2007. The Legislature declared in HB 07-1037 that “cost-effective natural gas and electricity demand-side management programs will save money for consumers and utilities and protect Colorado’s environment.” Through this legislation the PUC was “encouraged” to “reduce emissions or air pollutants and to increase energy efficiency.” The goal is for electric utilities to reduce peak generation by 5% from the 2006 levels by 2018. The bill allowed for utilities to recoup their investments in DSM programs at a higher rate of return than other generation investments. Continue reading Worth watching at the CO PUC – upcoming hearing on DSM Docket 13A-0686EG

Worth Watching at the Colorado PUC for April 4

***Update – The hearing was vacated and rescheduled for April 21***

On Friday, April 4 and continuing Monday, April 7, there will be a hearing on docket 13AL-0958E at the Colorado Public Utilities Commission. Why is this docket important? It has the ability to further decrease the rates that Xcel pays for power generated by outside power producers and thereby keep the generation of power in Xcel’s Colorado territory under its control.

As background, a Federal law, the Public Utilities Regulatory Policies Act (PURPA), passed in 1978, requires utility companies to buy power from outside producers if the cost is less than what it would cost them to make the power themselves, known as the “avoided cost.” This theoretically allows for small power companies, such as solar, wind, and hydro, to get into the power market. One of the main rubs in this system is determining what the “avoided cost” is, and therefore, what rate the independent power producers get paid for their power. That’s the subject of this docket. Xcel filed paperwork with the PUC that will change the rates they pay for this outside power for systems sized from 10-100 MW as well as the methodology by which they determine what that power is worth going forward.

In the experience of one of the parties, the methodology and rates that are finalized in this docket become the de facto rates and methodology for other power that Xcel buys overall. Avoided cost has been defined to include any number of factors, but Xcel typically keeps avoided cost artificially low, making it hard for independent power producers to get a sufficient return on their investment to make the development feasible. Federal law requires that the rate paid to these outside producers or qualifying facilities (QF), be among other things, not in excess of the incremental cost ( (the cost of producing an additional unit of generation) to the electric utility. There are interesting developments in other states, California being one of them, to include environmental costs in this avoided cost determination. Environmental costs are chief among the factors that need to be considered in these determinations, but Xcel will argue that they don’t directly pay the environmental costs that are being assigned in an avoided cost determination and so that cost cannot be fairly considered. Yet another reason we need to change the entire system, but I’ll try to stay to the docket at hand.

Continue reading Worth Watching at the Colorado PUC for April 4

Worth watching at the Colorado PUC for the week of March 12, 2014

In case you hadn’t heard, distributed solar power is being attacked across the country and Colorado is no exception. The Colorado Public Utilities Commission is beginning to look closely at how to value net metering in the State and the decision will impact whether you get to have solar on your roof if you’re staying tied to the grid and what that power is worth. Xcel started this fight last summer and it’s just starting to get going this spring.

In June of last year, Xcel filed their compliance plan regarding what kind of renewable energy they expected to buy for 2014. They dropped a paragraph midway through the filing that was the opening salvo in this battle:

“Our Recommended Plan also incorporates our efforts to start a dialogue about the need for and the equity of the incentives in the on-site solar program. In particular, we seek to transparently show the impact of the incentive net metering provides to customers that install PV systems, and to discuss the equity of that incentive. We seek to discuss the prospect that the net metering incentive either needs to be ramped down over time or that other rate design solutions must be explored to address the incentive net metering provides for future installations.” (PSCo’s VERIFIED APPLICATION FOR APPROVAL OF 2014 RENEWABLE ENERGY STANDARD COMPLIANCE PLAN, filed July 24, 2013, p. 2)

Xcel went on to say that if their valuation of net metering is accepted, they’ll continue to grow their distributed generation network at a pace that’s above the required acquisition. If their valuation is not accepted, they’ll ramp down their acquisition dramatically to the bare minimum.

For context in the pricing debate, the current price for power on the PJM wholesale market (back East) is around $47 per MWh, or $0.047 per kWh. In the Four Corners area, the five year average price for 2008-12 was $42.69 per MWh, or $0.043 per kWh. Energy on the spot market is energy of last resort for when long term planning fails or power needs peak above what was expected, so it’s likely the some of the most expensive power. Most power is obtained under long term contracts, which will be cheaper per unit, but this gives an idea of scale.

Xcel is proposing that net metered customers who own their own systems will get paid $0.02 per kWh in the beginning of the program and as more systems come online they’ll reduce that payment to $0.00125 per kWh. If you lease your system through a third party, that payment will remain consistent at $0.00125 per kWh.

Shouldn’t the power generated on your roof used primarily to power your house be more valuable than… well, almost nothing?

As of May 31, 2013 Xcel had about 160.0 MW of installed retail distributed generation online and operating. They get on average 414 applications per month for the small scale distributed generation (think the panels on your house) and about 84 percent of those are third party systems (Namaste, SolarCity or REC Solar, for instance). There is plenty of demand for these programs.

Yesterday at the weekly meeting, they scheduled the initial hearing on this issue. The PUC is graciously allowing all the parties, with Xcel starting, three hours, including a break, to determine the scope, purpose, expected results, and structure of the net metering battle. That hearing will take place on April 9 – keep an eye on this space for updates.

Oil & Gas Rulemaking Public Hearing & Comment Session

Come to the Colorado Air Quality Control Commission Public Hearing

February, 19th 12:00 pm – 3:00 pm and 5:00 pm – 7:00 pm
Aurora Municipal Center
15151 East Alameda Parkway, Aurora, 80012

The Colorado Legislature has declared it to be the policy of the state to “achieve the maximum practical degree of air purity in every portion of the state,” to attain and maintain Federal standards on air quality, and to prevent the significant deterioration of air quality in places where the air quality is better than federally mandated. The Air Quality Control Commission of the State of Colorado is charged with making these policies into enforceable regulations. This is a commission of 9 volunteers appointed by the Governor who care passionately about air quality. This is not the Colorado Oil and Gas Control Commission, who some see as having the interests of a small group of constituents at heart. The Commissioners of the AQCC are working hard to ensure that the air quality regulations they enact are the best possible regulations for public health.

Rewind to November, when Governor Hickenlooper stood with representatives of Environmental Defense, a former EPA Region 8 administrator, and the “big three” oil and gas developers in the state, Anadarko, Encana, and Noble Energy. These groups worked to come to a consensus on rules that will positively impact public health as well as will be attainable by the developers. Do these rules promise to allow zero oil and gas emissions to escape into the air? No. Will they go a long way toward cleaning up the VOC’s and methane that are part of today’s development? Yes. They can be stronger, but they must not be any weaker.

Over the past three months, small developers and industry groups have worked hard to attack these rules in hopes that they will be weakened. The rules are long and tedious, but can be understood to address two issues. First, they will require the oil and gas industry to use better technology – technology that the big three may already be using – to reduce VOC and methane emissions. Second, the rules require the industry to inspect their infrastructure and fix leaks when they are detected.

Continue reading Oil & Gas Rulemaking Public Hearing & Comment Session