Tensions rise in utility versus solar debate

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Tension between California's solar installers and the state's investor owned utilities boiled over today at the Cleantech Forum in San Francisco.

Bryan Miller, vice president of public policy and power markets at residential solar company Sunrun, said that utilities are the biggest obstacle to rapid growth rates of solar.

Although they say all the right things in public, in regulatory proceedings they are doing everything they can every day to stop solar, he said.

“I saw that at Exelon and Constellation and the three utilities we worked for,” he said. “This is what we always hear from the utilities… they're not anti-solar, they're just looking out for ratepayers. It's ridiculous and everybody knows that.

“The utility business model is to raise rates as fast and as high as possible. It's not about them cloaking themselves in ratepayer advocates shoes, it's not a costume that fits. This is about trying to stop solar.”

Lee Krevat, director of the smart grid division at San Diego Gas & Electric, said that his utility had seen explosive rise in rooftop solar with growth rates at around 40% a year. In July last year, SDG&E recorded 400 new installations – last month there were 700 installations, he said.

But he denied that utilities were “anti-solar” and trying to constrain growth rates. SDG&E has a top tier rate of around 30c per kwh. Solar customers avoid that top tier of cost and SDG&E avoids 7c-10 c per kwh cost of producing energy.

“There's a gap there,” said Krevat. “The way our model works is that we get to charge our other customers that difference of about 20c.

“We're not trying to stop solar, it's incredibly important that the industry move forward, we're just trying to figure out a way to subsidise it in a way that doesn't shift [costs to other customers] quite as much. We're just trying to find a way to let solar continue to grow, that's not done on the backs of diminishing numbers of customers.”

SDG&E is projected to earn $1.4 bililon profit from its investment in the $1.9 billion Sunrise Powerlink Transmission Line.

But Miller said that utilities were deploying tactics at the regulatory level to protect their profits from infrastructure investments.

“At high solar penetration levels, they're just imagining a world where there are smaller companies and they simply move less power over the wires.

“In the long run, the more DG that's on the grid, the less wires they get to build and put into the ratebase. It's less money and a smaller world for them.

“That's not where they want to be. If anyone wants to believe the utility story that they're just looking out for the poor ratepayer, I've got some swamp land in Arizona that you might be interested in.”

“More solar really doesn't affect profit for the utility,” countered Krevat. “It just affects how the rate is collected. The revenue cost in sum is just spread out across customers using a formula. That's what's causing some of these issues, as far as the future, there's going to be a tonne of solar and it's awesome.”

Last year, the California Public Utilities Commission rejected a ratecase proposal from SDG&E for a network use charge (NUC) for PV customers' use of the electric distribution grid.

California's utilities are also awaiting publication of a cost-benefit analysis from the CPUC on Net Energy Metering.

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