Battle lines drawn over Colorado net metering dispute

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US utility, Xcel Energy (XE), has said it is hoping to prove a “hidden” solar subsidy in a series of hearings discussing net metering (NM) in the state of Colorado.

Meanwhile solar advocacy group, The Alliance for Solar Choice (TASC) has accused XE of using “flawed methodology” in its argument and of protecting a “monopoly”.

Back in July, XE filed its renewable energy plan for 2014 with the Colorado Public Utilities’ Commission (PUC).

In response to XE’s plan the PUC called for an examination into net metering rates, resulting in four hearings, one last July, one 1 October, and two to follow.

For the following two sessions, senior media representative for XE, Mark Stutz said to PV Tech via e-mail the utility is “seeking verification that there is a hidden NM subsidy”.

Stutz described the apparent hidden subsidy for solar NM customers as “the benefits of the grid and other costs”.

Stutz said this benefit is delivered to NM users “essentially, through another mechanism on customer bills. Our non-rooftop solar customers don’t even really know they’re paying this subsidy each month.”

Stutz said once the PUC hearings reveal the “hidden subsidy”, the cost “needs to be transparent so that all non-solar customers know they are paying it”, and would also need to be recorded through the state’s Renewable Energy Standard Adjustment (RESA).

Stutz said XE proposed examining NM “for a number of reasons”, one of which is to “keep up” with exponential new installations of solar power, stating installation rates increased by 64% in 2013.

Susan Glick, senior manager for public policy at residential solar provider, Sunrun, and spokesperson for TASC, said XE's “attack” on rooftop solar “starts as trying to roll back net metering” and if the PUC did decide to change NM, the decision “would be a devastating blow to the solar industry”.

“It is a corner stone policy. It is critical to continue solar growth. If you want to continue solar growth you can’t get rid of net metering,” Glick said.

Stutz stressed XE had not proposed a NM reduction but the issue is “strictly” policy only, and about “fairness”.

Glick argued that there are hidden benefits of rooftop solar for utilities, rather than hidden costs, citing the Cross Border Energy report. The report concludes NM delivers financial benefits to all rate payers, not just solar customers.

Strutz said the same societal benefits such as jobs, health and environment, come from large, central solar installations – the same as from rooftop solar, but central installations get “more generation for our customers’ dollars”.

Responding to the allegation of flawed methodology, Stutz responded that “one can certainly disagree on the numbers in terms of dollar and cents, but at the end of the day there’s a hidden subsidy”.

Stutz said solar NM customers also benefit XE by offsetting the cost of fuel, and some generation costs, offsetting approximately US$0.046 per kWh put on XE’s grid.

However, this does not offset all generation, distribution or transmission costs, added Stutz.

Stutz claimed solar NM customers therefore “double-use” the grid, “75% of the time”, by putting out excess power generated, or to bring in power when systems are not generating.

This “double-use” costs all XE non-rooftop solar customers US$0.059 per kWh produced, estimated Stutz.

Stutz said if the rooftop solar industry in Colorado “truly was compensated for its contribution to cost of service, and otherwise paid for its fair share of the grid, then [the rooftop solar industry] would have an extremely difficult time making their business models work”.

Stutz added the RESA bills add to all customers 2% extra each month, to support renewable energy.

Stutz said XE “believes the actual system benefit for rooftop solar is significantly less than the full retail rate, in a true, utility cost-of-service model.”

But Glick said XE raising NM as an issue to the PUC is a “red herring” to protect profits.

Glick said XE “see rooftop solar as a threat to their growth”, and are therefore “attacking” solar to protect its “monopoly”.

Stutz countered that 76% of new solar installations are handled by one solar company, and one solar company accounts for 98% of all new solar kWh. “We might need to consider who is protecting profits, and who is the monopoly here?”

TASC claimed that XE put in solar programmes and set the rates, recovering all costs of deploying solar systems. “That makes rooftop solar part of the monopoly. The competitive market can’t do that” explains Glick.

 “[XE] have never seen competition before” and are “anti-competitive”.  

“Utilities say they are totally fine with rooftop solar, as long as they are the ones who can own it,” said Glick.

XE does not own solar, put does have power purchase agreements for large central solar projects with independent power producers in Colorado. Stutz said this was cheaper for all rate payers, and there “remains a place for some rooftop solar as long as our customers want it”.

One thing that is “undeniable”, said Glick, is the overwhelming public support for rooftop solar. “If an election were held today, 74% of voters would vote ‘yes’ on a pro solar net metering ballot measure,” said Glick. “That speaks magnitudes.”

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