The Los Angeles Department of Water and Power (LADWP) has finalised its 150MW solar feed-in tariff (FiT) which it claims is the largest solar incentive scheme for any US city.
In January, the board of water and power commissioners of LADWP approved a 100MW FiT programme for rooftop solar projects. A few months later on 16 April, the board approved an additional 50MW incentive programme known as FiT50 to complement 100MW scheme.
Under the 100MW programme, power producers will benefit from fixed prices. In February, LADWP opened up the first 20MW allocation of the 100MW FiT programme. Proposals were received for about 45MW of Los Angeles solar projects ranging in size from 30kW to 3MW.
LADWP is conducting interconnection studies for the first 20MW of proposals submitted. Once the studies are completed, the bidders can decide whether or not to complete the contract, which will be a standard 20-year contract at a set price of US$0.17 per kWh.
Subsequent 20MW allocations will be made available every six months through 2016 until the full 100MW is subscribed. The set price will decline after each 20MW has been allocated.
The FiT50 programme, however, will be competitively priced by issuing a request for proposal (RFP) which is “bundled” with a utility-scale solar project. The terms also require the projects to be constructed within LADWP’s service territory in the Los Angeles basin.
Aram Benyamin, LADWP’s senior assistant general manager of power, said the combined RFP provides a way to develop the most solar at the most competitive price.
Benyamin said: “One of the biggest benefits is that competitive bids and greater economies of scale will result in lower costs to customers and minimize rate impacts. Our goal is to accomplish the power supply transformation while keeping the cost impacts on customers as low as possible.”
LADWP expected the combined RFP approach to trigger the development of a higher volume of solar power within a few short years, thus increasing LADWP’s level of renewable energy at a faster pace to meet its goals to produce 25% of renewable energy by 2016 and 33% by 2020.
The utility firm will issue a RFP which will seek proposals for constructing 200MW of PV on the Beacon property owned by LADWP. The Becon property will be divided into four sites for PV plants each averaging around 50MW. Bidders may submit proposals for one or more of the four sites, each of which is linked to a required smaller local solar project between 10MW and 14MW in size.
The RFP also sets a price cap for each solar project — US$140 per MWh for the local FiT solar and US$85 per MWh for the Beacon project.
At the end of December 2012, LADWP acquired the 250MW Beacon Solar Project from Nextera Energy Resources. The acquisition came with approved permits, environmental studies and preliminary engineering designs. LADWP will construct a 50MW solar power plant at the site while the remaining 200MW will be offered to private developers through the RFP which is expected to be issued this month.