We are pleased to let you know that key issues that will affect the Colorado solar market for years to come will be resolved through a landmark settlement filed August 15 by Xcel Energy along with COSEIA and two dozen other organizations. Our intense summer-long negotiations will resolve scores of issues raised by three different major proceedings filed by the utility.
While COSEIA was not fully satisfied with the outcome of all the issues debated for months, we decided to join in the settlement on all three dockets because we believe that on balance, the settlement represents a number of very positive developments for Colorado’s solar industry, and a better outcome than we would likely get through months of costly litigation.
The settlement was filed with the Colorado Public Utilities Commission, which is expected to seek written testimony and hold hearings before deciding on the settlement. But we wanted to let you know the highlights for our industry. Here are key issues in each of the cases and what is included in the settlement agreement:
Phase II Rate Case, Proceeding No. 16AL-0048E
Grid Use Charge
Xcel had proposed a new fixed charge for all residential and small commercial customers based on their electricity usage. The utility agreed to drop this proposal and move instead to energy-only Time of Use rates, in exchange for intervenors looking favorably on decoupling. COSEIA has filed to intervene in the decoupling docket, in which Xcel seeks to eliminate its financial incentive for selling more electricity.
Net Metering
Xcel agreed to a key principle for COSEIA: Customers who are net-metered will have equivalent treatment regardless of whether they are participating in Solar Rewards, and Xcel will not propose any new tariff that would alter this treatment prior to the next rate case. Xcel also promises to stop sending notification letters to NEM-only customers concerning the possibility of future tariff changes, and to automate the application process for NEM-only customers.
Time of Use Rates
A trial of residential time of use rates will begin early next year, allowing residential customers to “opt in” initially, with the current plan calling for the rate to transition to the default rate in 2020, while allowing for reviews and evaluations. The rate would be contingent on approval of Xcel’s recently-filed proposal to roll out new advanced meters, and on a review of how well the trial period worked.
Time Periods
On Peak: 2 PM through 6 PM (weekday, non-holiday)
Off Peak: 9 PM through 9 AM
Shoulder: All Other Hours
The Proposed Rates are as follows
Note: Adjustments including the ECA adjustment which varies by Quarter but has been in the $0.02 -$0.03/kWh range also add to the rates below.
Summer Winter
On Peak: $0.13814 $0.08880
Shoulder: $0.08420 $0.05413
Off Peak: $0.04440 $0.04440
Net Metering Time of Use
COSEIA and other solar parties scored a win with the agreement that extra energy generated by solar systems in a given month can be rolled over as a monetary credit that recognizes the value of the energy at the time it was generated. The credit will be used to offset the bill for consumption the next month and can continually roll over. Those who have elected to cash out extra production will still have that option.
Commercial Rates
COSEIA worked hard to protect the interests of the commercial solar market. Xcel had proposed closing many commercial rates, but the settlement will provide a revised SPVTOU (Secondary Photovoltaic Time-of-Use) which is geared toward commercial solar customers who are awarded service in the Medium Solar Rewards program.
COSEIA was able to negotiate double the Medium Capacity for the next 3 years (24 MW/year compared to the current 12 MW/year) at REC prices higher than Xcel proposed. Additionally, new construction will be eligible based on load forecasts.
Other rates will close to new customers on January 1st, including the SGL for solar customers.
Batteries and Storage
Xcel had proposed a separate “auxiliary service” for batteries, but dropped that plan. The settlement includes language clarifying that energy storage paired with solar is eligible for net metering, provided conditions are met. Energy storage systems will be allowed on the same side of the production meter as a PV system, provided that the storage system is charged exclusively by the solar system. Only the production recorded by the production meter will be eligible for REC incentives.
Production Meters
Production meters will still be required for all net-metered customers, but those who are not participating in Solar*Rewards will no longer have to pay for them. Instead, the costs will be assessed to the utility and funded through the renewable energy account.
Residential Demand Rate Pilot
A pilot of a “Residential Demand – Time Differentiated Rate” will also be conducted, and additional REC payments to encourage some solar customers to try the rate will be included.
2017-2019 Renewable Energy Plan (Proceeding No. 16A-0139E)
Solar Rewards Capacity
The settlement provides the following capacity targets, in megawatts, for the Solar Rewards program. Small Option B is reserved for participants in the demand rate pilot described above, to be rolled into the general program if not used by those participants.
|
Program
|
2017 Capacity
|
2018 Capacity
|
2019 Capacity
|
Total RES Capacity | |
|
Sm Opt A
|
24
|
24
|
24
|
72 | |
|
Sm Opt B
|
9
|
18
|
24
|
51 | |
|
Medium
|
24
|
24
|
24
|
72 |
Commercial
|
|
Large
|
6
|
10
|
14
|
30 |
Commercial
|
REC Levels
Here are the REC levels (per KWh) for the small program:
|
Year
|
Option A
|
Option B
|
|
2017
|
$0.005
|
$0.0500
|
|
2018
|
$0.005
|
$0.0475
|
|
2019
|
$0.005
|
$0.0350
|
These are the Medium Program REC levels (per kWh):
|
Year
|
Medium
|
|
2017
|
$0.0475
|
|
2018
|
$0.0425
|
|
2019
|
$0.0375
|
For the Large Program, RECs will be determined through a competitive solicitation process, with the company awarding RFP bids each year. The Large program, to give C&I customers an option for systems larger than 500 kW, has not been offered since 2012.
Community Solar Garden acquisition levels were set in the settlement at these levels, in MWs:
|
Year
|
2017
|
2018
|
2019
|
Total
|
|
Minimum
|
15
|
15
|
15
|
45
|
|
Maximum
|
30
|
35
|
40
|
105
|
|
100% Low-Income CSGs
|
4
|
4
|
4
|
12
|
|
Combined Maximum
|
34
|
39
|
44
|
117
|
Negative RECS
Parties to the settlement agree to leave unresolved the question of whether negative REC price bids are appropriate from a legal or policy standpoint.
Low-Income Solar
The settlement includes the first major commitment to provide more solar to low-income customers. Xcel agrees to partner with the Colorado Energy Office to create a low-income solar program that will install up to 300 rooftop systems in the next three years. Additionally, Xcel will solicit through the RFP process up to 4 MWs of solar gardens that commit to provide 100% of their energy to qualified low-income customers.
Solar Connect (Proceeding No.16A-0055E)
General Parameters
The settlement changes the name to Renewable Connect, and authorizes the new solar resource at up to 50 MW. Customers can subscribe for up to 100 percent of their energy month-to-month, or for terms of 5 years or 10 years.
Costs
The bill charges and bill credits for the project are projected to make it a premium product for at least the first several years, though the cost will depend on what is bid to build the solar farm and what Xcel signs in a Power Purchase Agreement.
Program Marketing
To address the anti-competitive concerns raised, Xcel agreed to provide a common web site landing page for all voluntary renewable energy programs where customers can access information on all programs. Personnel working on other solar programs will generally not work on Renewable Connect, and various other provisions are intended to allay other anti-competitive issues that arise
Stakeholder Groups
COSEIA believes that one of the most important aspects of the settlement is the creation of several stakeholder groups – open to all settling parties – that will provide much more regular interaction for resolving issues with Xcel. These groups will begin by meeting quarterly and will identify and address issues leading to additional actions in support of this settlement including actions which may require approval of the PUC. The groups identified in the settlement and given specific tasks include:
Distribution Grid and Interconnection Stakeholder Group
Future Voluntary Renewable Programs Stakeholder Group
Existing Voluntary Renewable Programs Stakeholder Group
Pilot and Trial Program Stakeholder Group
