California
State Ponders Restructuring Proposals
California presently has five utility restructuring proposals under
consideration. The PUC offered two competing proposals: the majority proposal
advocates a central pool dispatching system and the minority proposal seeks
direct access for all customers. In addition, Southern California Edison
and several large industry groups submitted a memorandum of understanding
calling for a voluntary wholesale power pool and phased direct access.
A customer-oriented group proposal seeks more direct benefits in terms
of bill and rate reductions, and a public interest group proposal focuses
on preserving public benefits in restructuring.
Important differences arise in the treatment of utility stranded investments. The PUC majority and utility proposals seek 100% stranded investment recovery, while the other proposals take the position that less than 100% recovery may be warranted.
California state law requires a certain percentage of new electric capacity
to be set aside for renewables. All five of the proposals contain provisions
for the explicit treatment of renewables, either through development of
a portfolio standard or through a nonbypassable system benefits charge.
PUC Contact:
David Morse, (916) 657-4085
Net Energy Metering Law Enacted
California enacted a law requiring the state's utilities to implement
net energy metering for residential owners of solar electric systems of
10 kW or less. The state established a limit on cumulative installations
equal to 0.1% of a utility's 1996 peak output, or 53.3 MW in aggregate
across the state.
The California Solar Energy Industries Association (CalSEIA) notes that
the savings to a utility from not having to install and read two meters
exceeds the costs and lost revenue incurred with net metering. The group
also notes that utilities benefit from the "peak shaving" characteristics
and other distributed benefits of residential PV systems. CalSEIA views
net metering as a "first step in offering a market-based approach
which promotes the use of clean-energy generation to improve the environment."
CalSEIA Contact:
Cathy Murnighan, (916) 649-9858
Florida
Solar Program to be Phased Out
The PSC approved a phase-out of Florida Power & Light's solar
water heater incentive plan for residential customers. The PSC accepted
the utility's argument that the program, which offered incentive payments
for residential solar systems, was not cost-effective for the utility to
continue. The utility has agreed to continue providing customers with information
on solar water heating during residential energy audits and in response
to direct customer inquiries.
PSC Contact:
Richard Shine, (904) 413-6688
Iowa
Legislature Examining Renewables
A legislative committee has been created and charged with reviewing
issues related to increasing the use of alternative energy in Iowa. The
Iowa Alternative Energy Production Study Committee, composed of 10 legislators,
is examining subsidy and incentive issues in conjunction with the state's
existing utility mandate to procure a total of 105 MW of renewables. A
set of formal recommendations is expected early next year.
Legislative Contact:
Julie Smith, (515) 281-6329
Massachusetts
DPU Issues Restructuring Principles
Noting that "in restructuring, the concepts of competition
and customer choice are fundamental," the DPU established a set of
principles to guide the development of utility restructuring proposals
within the state. The overall goal of the restructuring proceeding is "the
development of an efficient industry structure and regulatory framework
that minimize long-term costs to consumers while maintaining the safety
and reliability of electric services with minimum impact on the environment."
Although renewables are not explicitly treated in the order, the DPU clearly believes that greater competition and retail customer choice will help foster renewables. Increased choice will allow customers "to seek the suppliers that offer the services they want at the lowest price . . . [and] . . . create incentives for suppliers . . . to determine which services and products customers desire." And in addressing environmental issues, the DPU writes that increased competition "should create greater incentives than currently exist for suppliers to anticipate and minimize the costs of complying with current and future environmental regulations at both existing and new plants."
The DPU views the unbundling of electricity service charges as integral
to realizing the benefits of competition because "customers must be
able to compare the prices and terms of the various products and services
that are available." In the order, the DPU established a staggered
schedule that requires all of the state's utilities to submit restructuring
proposals over the next year.
DPU Contact:
Theo MacGregor, (617) 727-9748
Michigan
PSC Approves Limited Green Pricing
The Michigan PSC approved a special green service for customers
of Detroit Edison to help fund a planned 28.4 kW PV demonstration facility.
The utility notes that "the success of the project depends on its
popularity with customers and their willingness to pay a small premium
to fund development of a renewable power source."
Under the SolarCurrents rate, residential customers are being
asked to pay an additional $6.59 per month for 2 years to receive an average
of 140 kWh per year of PV power. This works out to a price premium of 56.5›/kWh
to help pay for the $250,000 project. The utility also will receive $113,600
in project cofunding from the U.S. Department of Energy.
PSC Contact:
John Trieloff, (517) 334-7233
Montana
PSC Issues Preliminary RE Proposals
The PSC issued, and requested comments on, a set of preliminary
proposals meant to "provide a balanced approach to renewables, given
the realities of today and the uncertainties of the future." By issuing
these proposals, which are an outgrowth of the commission's investigation
of renewable energy issues (SREN, Summer 1994), the PSC "does
not advocate preferential treatment of renewable resources over traditional
resources, but instead intends to establish guidelines that focus attention
on renewable energy alternatives."
The proposals address niche applications of renewable energy technologies, upgrades to the IRP and resource acquisition processes, evaluation and appropriate implementation of "green pricing" programs, consideration of nonprice attributes, development of utility RD&D programs, and establishment of a state renewables working group.
In a separate inquiry into the restructuring of Montana's electric utility
industry, the PSC requested comments on how, and to what extent, the state's
electric industry should support the development of renewable resources.
Commentors also are asked to address the merits of a nonbypassable universal
system benefits charge to support public policy goals such as renewable
energy development.
PSC Contact:
Mike Sheard, (406) 444-6189
Nevada
Legislature Okays Green Pricing
The Nevada legislature authorized the state's utilities to provide
a voluntary green service to its customers. The legislation notes that
the program "must provide the customers of the utility with the option
of paying a higher rate for electricity to support the increased use by
the utility of renewable energy resources in the production of electricity."
To date, neither of the state's two utilities has filed a green pricing
tariff with the PSC.
PSC Contact:
John Candelaria, (702) 486-2620
New York
PSC Approves Green Pricing Pilot
The PSC approved a proposal from Niagara Mohawk to offer an experimental,
3-year "green pricing" pilot program to its residential customers.
For a subscription fee of $6.00 per month, program participants contribute
to acquiring renewable energy resources "to displace fossil fuel generation
. . . to reduce air pollution and to conserve fossil fuels." The company
also will undertake a tree planting program within its service territory.
The renewable energy resources will be acquired through a competitive
bidding process. The differential between the project contract price and
the utility's avoided cost will be paid from accumulated program subscription
funds. This program is a response to a DPS request for a utility volunteer
to test the feasibility and market acceptance of a green pricing. In addition,
the utility's research indicated that such a program may be desirable to
its residential customers.
PSC Contact:
Fred Ulrich, (518) 486-5211
Rhode Island
PUC Rejects Renewables Charge
Noting that "if the main priority is to reduce costs via restructuring,
it is inconsistent to integrate new costs into the system simultaneously,"
the three-person PUC, with one dissent, rejected a state collaborative's
recommendation that the costs of transitional support for renewables be
included in a "non-bypassable, non-discriminatory, appropriately structured
charge."
The collaborative, chaired by Mary Kilmarx of the PUC and made up of utilities and industrial, business and consumer groups, developed a set of recommended principles to guide utility restructuring negotiations. The renewables principle addressed the potential need for transitional support for "clean and renewable energy sources (that) can play a valuable role in providing fuel diversity, managing risks and reducing environmental impacts." In rejecting the renewables surcharge, the PUC admonished that "restructuring efforts must fully accept the market approach, and reject special surcharges and subsidies which skew the competitive balance."
However, the order went on to say that "the Commission continues
to believe that resource and fuel diversity are important goals. We invite
the Collaborative to creatively address how to integrate renewables into
a competitive marketplace." The collaborative intends to explore non-surcharge-related
options and present them to the commission.
PUC Contact:
Mary Kilmarx, (401) 277-3500
Virginia
PV Incentive Bears Fruit
The availability of an incentive grant for the development of PV
manufacturing facilities led to groundbreaking for a $25 million state-of-the-art
PV manufacturing plant by Solarex Corp. The state's 2-year-old program
will provide 75 cents per watt, for up to 6 MW per year, of PV panels manufactured
in Virginia from 1995 to 1999 (SREN, Summer 1993). The Solarex
plant will produce in excess of 10 MW of solar cells annually and is expected
to employ 60 to 80 people. Solarex is a business unit of Amoco/Enron Solar.
Solarex Contact:
Sarah Howell, (301) 698-4272
Utility Markets Green Power
Portland General Electric (PGE) is packaging power from two planned
wind projects for sale to wholesale customers. The City of Portland has
contracted to purchase 11.25 million kWh (1.29 aMW) of the wind energy
for 5 years, equivalent to 5% of its power under a new contract with the
utility. The wind energy costs will be blended with lower "market-based"
rates; the resulting "blended rate" will still be lower than
the city's former contract rate. PGE also is discussing green power sales
with at least two other wholesale customers in Oregon.
PGE Contact:
Frank Afranji, (503) 464-7033
Utility Enhances PV Package
To stimulate greater participation in its off-grid PV pilot program
(SREN, Fall 1992), Idaho Power modified its tariffs in three
states to allow customers to purchase utility-installed PV systems for
the depreciated value at the end of the 5-year service contract or to renew
the system lease for another 5 years.
In Idaho, the tariff change has had a dramatic effect on the number
of installations. During the first 2 1/2 years of the pilot program, only
six systems were installed. However, the utility has installed more than
25 additional systems in the last six months.
Idaho Power Contact:
Larry Crowley, (208) 388-2683
Analysis Refutes Coal Industry Report
Analysts at the National Renewable Energy Laboratory (NREL) in
Golden, Colorado report that a study being distributed by a coal industry
group grossly exaggerates the costs to the nation of increased renewable
energy deployment. The NREL analysis, commissioned by the Office of Utility
Technologies of the U.S. Department of Energy, finds that the conclusions
of the study being distributed by the Center for Energy and Economic Development
are based on faulty data and assumptions regarding the comparative economics
of coal and renewable energy development.
Using data from the U.S. Department of Energy and the Electric Power
Research Institute, NREL finds that a modest growth path of renewable resource
development would essentially cost the nation little more than projected
electricity market costs for coal-fired generation, even before considering
the environmental benefits that would accompany this development.
NREL Contact:
Blair Swezey, (303) 275-4664
State Renewable Energy News is prepared under the auspices of the NARUC Subcommittee on Renewable Energy to promote the sharing of information on state-level renewable energy activities. It is issued three times annually to coincide with the NARUC Committee meetings.
The preparation and printing of this newsletter is sponsored by the Office of Power Technologies of the U.S. Department of Energy.
Comments can be directed to:
Blair Swezey
NREL
1617 Cole Blvd.
Golden, CO 80401
(303) 384-7455.
The Subcommittee Chairman is The Hon. Renz D. Jennings, Chairman, Arizona Corporation Commission — (602) 542-3935.