Author Archives Laura Arnold

SEPA: The Net Energy Metering (NEM) Stalemate: What steps are needed to fix the stalemate? Your thoughts?

Posted by Laura Arnold / September 01, 2013 / Posted in solar, Uncategorized / No Comments

THE NEM STALEMATE

Thursday August 29, 2013

In Samuel Beckett’s seminal play Waiting for Godot, two vagabonds named Estragon and Vladimir spend the better part of two days waiting – somewhat impatiently – for the arrival of a mysterious man named Godot.

They generate verbal diversions to pass the time, vacillating between periods of heated discussion and long stretches of quiet deliberation. At many points, Estragon forgets where they are and what they are waiting for, only to be reminded by Vladimir that they simply wait for Godot.

The play ends, unfortunately enough for the two, with another day passing that seems a surreal replication of the previous day, which was much like the day before that, all without ever achieving fulfillment in the form of the never-present Godot.

It strikes me that the debate surrounding Net Energy Metering (NEM) has reached much the same impasse that faced Vladimir and Estragon. In multiple jurisdictions across the country, NEM has become a topic hotly debated by utilities and solar stakeholders, and in many cases it seems like resolution is not only difficult but potentially nonexistent.

Part of the issue today is that all parties are hoping to see a solution arise that meets everyone’s needs from day one, and that the current NEM framework, to the extent required, can be switched over to a new paradigm overnight. If we are waiting for that solution, we will likely get no further than Vladimir and Estragon.

Rather than searching for a one-size-fits-all magic bullet, all parties should take a longer view and look for a solar transaction that combines near-term needs with long-term sustainability.

What does that look like structurally? Essentially, it requires a defined transition plan to ensure that the interests of utilities and the solar industry are progressively aligned and, ultimately, individually and mutually sustainable.

What does that mean in plain terms? The first step is to recognize that any changes to the current NEM transaction will have a direct, immediate, and likely negative impact on the economic value proposition for solar adoption, so a defined transition must be designed to moderate that impact. Whether through the imposition of a new cost (in the form of demand charges or standby fees), or a move away from retail rate compensation (via wholesale market-based bill credits or the Value of Solar model), modifications to the status quo often have been proposed as changes that must occur immediately. We need to introduce any change with more deliberation.

Abrupt changes in how distributed solar transactions are compensated have drawn the ire of customers, interest groups, and the solar electric power industry because there is little time afforded to consider how business models can be transformed to survive in the new regime.

To counterbalance that concern, utilities may want to look at a staged approach to implementing their proposals, which allows for the market to adjust how deals are structured and also recognizes the expected decline in solar installed costs that should persist for the next several years.

A phased-in transition period can consist of the introduction (or reintroduction for some utilities) of a transparent incentive (either in $/watt or $/kWh) with an explicit step-down schedule, or, alternatively, a ramp-up over several years of any proposed demand or standby charge. In either case, the goal would be to:

Envision a future point in time where utilities, industry participants, and solar electric customers are in concord with the value solar provides and how it is compensated; and,
Outline a clear and transparent path forward that supports the needs of the solar industry and consumers in the near-term while providing a long-term solution utilities can accept.

Elevating the conversation away from an immediate impact that causes market disturbances and toward one that sustains today’s market momentum while aligning with a long-term market transformation will enable all parties involved to break the stalemate and allow a sustainable solution to occur. If we don’t change the debate and attempt to find realistic common ground, we may all become stuck like Vladimir and Estragon, waiting in vain for our proverbial Godot to arrive.

You might also want to read this SEPA blog post on net metering:

http://www.solarelectricpower.org/posts/2013/07/solar-is-from-mars,-utilities-are-from-venus-finding-a-common-language-for-net-energy-metering.aspx

GTM: SEIA Issues Net Energy Metering Guiding Principles

Posted by Laura Arnold / August 31, 2013 / Posted in Uncategorized / No Comments

GTM Exclusive: The Solar Industry Establishes Net Metering Principles

“The utilities’ long-term thinking seems a little shortsighted.”

HERMAN K. TRABISH: AUGUST 29, 2013

With disputes breaking out between utilities and builders of rooftop solar all over the country about net energy metering (NEM), the solar industry has issued guiding principles to make clear what it believes the basic components of NEM must be. GTM has obtained exclusive access to the just-released principles.

After what insiders described as a thorough airing of the NEM controversy, a significant majority of the Solar Energy Industries Association (SEIA) 35-member board approved the seven Net Energy Metering Guiding Principles.

The declaration is unequivocal. “SEIA asserts that these principles are consistent with the imperative of public utility commissions and energy service providers to maintain reliable, cost-effective service to all customers while protecting the right of customers to generate their own energy in a manner that provides many public benefits including environmental protection and economic development.”

“Net metering is a billing mechanism that facilitates distributed generation and gives customers who are putting value on the grid payment for that value,” explained SEIA VP Carrie Cullen Hitt. “There are benefits that cannot go unnoticed. And if a utility is going to set a cost, it must do a transparent analysis that includes those benefits.”

The analysis, Hitt said, is the critical question. Suggested approaches for how a cost-benefit analysis should be carried out are woven through many of the principles. Principle Three makes two key points. One is that “net energy metering customers should not be treated unfairly vis-à-vis other ratepayers and all benefits should be accounted for.” The other is that “a utility should have the opportunity to recover its costs of providing service and earn a return on investment as determined by regulators."

This captures much of the tension between solar and utilities, Hitt said. "Utilities might say they are OK with net metering, but that solar customers are getting overcompensated."

The concern with overcompensation and cost-shifting has led utilities like Arizona’s APS and California’s SCE to propose supplemental bill charges. “Our fundamental principle is there should be no discrimination,” Hitt said. “Solar customers shouldn’t be treated differently. You can’t have some made-up charge that doesn’t reflect the costs and benefits accurately.”

In the light of the utilities’ real concerns, Hitt said, Principle One's assertion of an inherent “right to self-generate, connect to the grid, and reduce grid electricity use” is a bold move.

This goes directly to what Hitt believes is the utilities’ deepest concern: that self-generation will cost them customers and revenues and force them to change their business model.

“Distributed solar has such little market penetration, even in the sunniest states,” she observed. “So why all the dramatics?”

Because, she went on, utilities always think about the long term, and they are reacting to what might happen in five or ten years. Even as “wires providers,” utilities would be concerned about losing newly independent customers. “They seem to be saying, ‘We have to stop this now before it gets more traction.’ But the utilities' long-term thinking seems a little shortsighted, considering what their customers want.”

Another side of the principles, Hitt said, is that utilities are trying to understand how to deal with solar. “These can help them think through how to succeed as transmission and distribution companies and, in some instances, owners of generation. They can share the system with others.”

These principles present to utilities the fundamental structure of net metering, Hitt explained. “It should be for retail credit and it should have these basic components. It also says to them, ‘If you are thinking about some kind of charge, it should not be discriminatory. If you are going to put a charge on ratepayer bills, who is doing the math?’”

More than two-thirds of the SEIA board, including representatives from small installers, big developers, manufacturers, finance, and other facets of the industry, voted to approve.

Off-the-record reports to GTM said the small number of dissenters on the board were concerned with what factors would go into the cost and benefit calculations.

A number of studies have attempted to define those factors, Hitt acknowledged. “The studies have typically been the start of the real conversation.”

LBNL New Wind Study Finds No Evidence of Residential Property Value Impacts

Posted by Laura Arnold / August 31, 2013 / Posted in Uncategorized, wind / No Comments

Part three of three in a series of articles addressing residential property values near wind farms.

No Evidence of Residential Property Value Impacts Near U.S. Wind Turbines, a New Berkeley Lab Study Finds

Media contact: Allan Chen (510) 486-4210, a_chen@lbl.gov

Technical contact: Ben Hoen (845) 758-1896, bhoen@lbl.gov

Lawrence Berkeley National Laboratory (Berkeley Lab) analyzed more than 50,000 home sales near 67 wind facilities in 27 counties across nine U.S. states, yet was unable to uncover any impacts to nearby home property values.

“This is the second of two major studies we have conducted on this topic [the first was published in 2009 – see below], and in both studies [using two different datasets] we find no statistical evidence that operating wind turbines have had any measureable impact on home sales prices,” says Ben Hoen, the lead author of the new report.

Hoen is a researcher in the Environmental Energy Technologies Division of Berkeley Lab.

The new study used a number of sophisticated techniques to control for other potential impacts on home prices, including collecting data that spanned well before the wind facilities’ development was announced to after they were constructed and operating. This allowed the researchers to control for any pre-existing differences in home sales prices across their sample and any changes that occurred due to the housing bubble.

This study, the most comprehensive to-date, builds on both the previous Berkeley Lab study as well a number of other academic and published U.S. studies, which also generally find no measureable impacts near operating turbines.

“Although there have been claims of significant property value impacts near operating wind turbines that regularly surface in the press or in local communities, strong evidence to support those claims has failed to materialize in all of the major U.S. studies conducted thus far”, says Hoen. “Moreover, our findings comport with the large set of studies that have investigated other potentially similar disamenities, such as high voltage transmission lines, land fills, and noisy roads, which suggest that widespread impacts from wind turbines would be either relatively small or non-existent.”

The report was authored by Ben Hoen (Berkeley Lab), Jason P. Brown (formerly USDA now Federal Reserve Bank of Kansas City), Thomas Jackson (Texas A & M and Real Property Analytics), Ryan Wiser (Berkeley Lab), Mark Thayer (San Diego State University) and Peter Cappers (Berkeley Lab). The research was supported by the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy.

Lawrence Berkeley National Laboratory addresses the world’s most urgent scientific challenges by advancing sustainable energy, protecting human health, creating new materials, and revealing the origin and fate of the universe. Founded in 1931, Berkeley Lab’s scientific expertise has been recognized with 13 Nobel prizes. The University of California manages Berkeley Lab for the U.S. Department of Energy’s Office of Science. For more, visit www.lbl.gov.

Additional Information:

Download the new 2013 LBNL report “A Spatial Hedonic Analysis of the Effects of Wind Energy Facilities on Surrounding Property Values in the United States”

Download the 2009 LBNL Report “The Impact of Wind Power Projects on Residential Property Values in the United States: A Multi-Site Hedonic Analysis”

More information about DOE’s Wind Program

For more information on the report, contact Ben Hoen (bhoen@lbl.gov, 845-758-1896), or Ryan Wiser (RHWiser@lbl.gov, 510-486-5474).

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Also see http://www.indianadg.net/wind-farm-proximity-and-property-values-in-central-illinois/

Here is a copy of another study on property values near wind farms that was done in Illinois.

2010 Wind Farm Proximity and Property Values[1]

Tipton County (IN) Prairie Breeze Wind Farm fight headed to court; BZA limits property value guarantee testimony

Posted by Laura Arnold / August 31, 2013 / Posted in Uncategorized, wind / No Comments

This is part two of a three part series on the Prairie Wind Farm. Part three features the new LBNL new wind study issued earlier this week.

August 30, 2013

Prairie Breeze Wind Farm fight headed to court

BZA limits property value guarantee testimony.

By Ken de la Bastide Kokomo Tribune Kokomo Tribune

TIPTON – The battle over the Prairie Breeze Wind Farm in northwestern Tipton County will be continued in court as developer juwi Wind attempts to modify the conditions imposed on the project.

Attorneys for juwi Wind and leaseholders in the area of the proposed Prairie Breeze Wind Farm contend their clients were denied due process by the Tipton County Board of Zoning Appeals.

“The chairman of the BZA has created a dysfunctional, unstable business environment in Tipton County for investors looking to create economic development opportunities and jobs,” Michael Rucker, CEO of juwi Wind, said Thursday.

“Ground rules change at a moment’s notice based on arbitrary political decisions, not regulations that have been adopted by those elected in the community. Fortunately, citizens still have the courts to rely upon. Unfortunately, that is where we are headed.”

The BZA met Wednesday at the Tipton High School to hear testimony regarding a proposed property value guarantee for the project, but no testimony was heard after BZA President Jerry Acres decided to limit the scope of the hearing.

In March, the BZA approved a conditional use permit for the wind farm with conditions requiring a 1,500-foot setback from property lines and creation of a property value guarantee to protect non-participating property owners in the project area.

The company submitted a plan covering residential property within three-quarters of a mile of a wind turbine and involving only the first sale after Prairie Breeze goes into operation. It limited juwi’s liability to $1 million.

Acres got into heated arguments with Mary Solada, attorney for juwi Wind, and Tim Ochs, who was representing the leaseholders.

Solada said juwi Wind was prepared to present a property value guarantee and was prepared to provide testimony that it would not benefit residents of Tipton County.

Acres asked if juwi was going to argue against a property value guarantee, to which Solada said it was an option.

“We’re not going to consider testimony to eliminate the property value guarantee,” Acres said.

Last month, Steve Edson, administrator of the Tipton County Plan Commission, denied a request from juwi Wind to consider elimination of the property value guarantee. Edson’s decision was based on its inclusion as a condition for the permit.

Solada said juwi Wind’s due process was being denied and asked if a majority of the BZA’s five members agreed with Acres’ position.

“A vote is not required,” he said.

Solada said if that testimony could not be presented, her client was being denied their due process rights.

Ochs objected to the decision and also cited denial of due process to his clients.

“The best decisions are reached when an emphasis is placed on making the right decision,” Ochs said. “This is a big decision worth millions of dollars. Instead of restricting testimony, the board should receive as much information as you can to make the right decision.”

Acres said juwi Wind and the leaseholders are upset with the BZA decisions and missed the chance to appeal the initial approval within 30 days of the March meeting.

“I’m trying to protect the integrity of the board. First you wanted to modify the decision, then amend it and now eliminate it,” he said, referring to the property value guarantee.

“Your intent is to sue,” Acres proclaimed. “Save everyone time and file it.”

Pat Hess, attorney for the Tipton County Citizens for Responsible Development, said it is the board’s decision on whether to take a vote. He said the petitioners had due process in March and failed to file an appeal that the conditions imposed by the BZA were unreasonable.

“They’re trying to make a case that you’re biased,” Hess told Acres. “They are trying to get you removed.”

Duke Energy to Retire Wabash River Coal Units in Settlement; Link to Settlement

Posted by Laura Arnold / August 30, 2013 / Posted in Edwardsport IGCC Plant, Feed-in Tariffs (FiT), Uncategorized / No Comments

FOR IMMEDIATE RELEASE
August 30, 2013
Contact: Jodi Perras, Sierra Club - (317) 296-8395, jodi.perras@sierraclub.org
Jennifer Washburn, Citizens Action Coalition - (317) 735-7764, jwashburn@citact.org
Shane Levy, Sierra Club - (201) 679-9507, shane.levy@sierraclub.org

Duke Energy to Retire Wabash River Coal Units in Settlement with Indiana Citizens Groups
Groups Continue to Fight Duke’s Edwardsport Cost Overruns in Indiana Court of Appeals

INDIANAPOLIS - A coalition of Indiana environmental and citizens groups including the Sierra Club, Citizens Action Coalition, Valley Watch, and Save the Valley announced a legal settlement today that requires Duke Energy Indiana to cease burning coal at most of its Wabash River coal-fired power plant in Vigo County and to invest in new renewable energy projects.

Under the terms of the settlement, Duke Energy will retire units 2, 3, 4, and 5 at the Wabash River plant and will also stop burning coal at Wabash River unit 6 by June 1, 2018. A total of 668 megawatts of coal-fired power will come offline as a part of this agreement.

Duke Energy also agreed to pursue either a new feed-in tariff program to purchase at least 30 megawatts of solar power from its Hoosier customers or to purchase or install at least 15 megawatts of wind or solar generating capacity from new facilities built in Indiana. A feed-in tariff enables customers to earn money from their own solar panels by selling excess power back to electric utilities.

“While today’s settlement is a step in the right direction, more must be done to ensure that Hoosier families are protected from rising energy bills and the enormous health threats posed by Indiana’s reliance on coal-fired power plants,” said Jodi Perras, Indiana campaign representative for the Sierra Club’s Beyond Coal campaign. “Hoosiers want clean, renewable energy and local jobs. Duke Energy and other electric utilities need to step into the 21st century and continue to move beyond coal.”

The settlement ends an appeal of Duke’s Title V air pollution permit issued by the Indiana Department of Environmental Management for the Edwardsport coal-gasification and combined-cycle power plant. However, it does not end the parties’ parallel case before the Indiana Court of Appeals to overturn Indiana Utility Regulatory Commission (IURC) decisions regarding the Edwardsport plant, which is more than $1.6 billion over budget and still not operating at full capacity after eight years of design, construction, and testing.

According to estimates from the Clean Air Task Force, the Wabash River plant currently contributes to 74 deaths, 110 heart attacks, and 1,200 asthma attacks each year.

"Any progress toward greater utilization of renewables and less dependence on fossil fuels like coal is a step in the right direction,” said Richard Hill, senior advisor for Save the Valley.

The Edwardsport coal gasification plant has been mired by scandals involving cozy relationships between Indiana regulators and Duke Energy executives, corporate malfeasance, and soaring cost overruns. The total cost of the Edwardsport coal-gasification project stands at $3.5 billion, an enormous overrun of the initial cost estimate of $1.9 billion. In July, mechanical problems at the plant caused it to cease operation just six days after being declared “in-service” by Duke Energy. Citizens Action Coalition, Save the Valley, the Sierra Club, and Valley Watch have appealed the Indiana Utility Regulatory Commission’s December 2012 approval of additional rate increases tied to the Edwardsport coal gasification plant, and will file briefs by September 9^th in the case pending before the Indiana Court of Appeals.

At stake in the appeal are: 1) whether the IURC violated the law by failing to consider the long-term costs to Duke Energy ratepayers of controlling the plant's carbon pollution, despite the fact that the issue was raised in testimony by citizens groups and ignored in the IURC’s decision, in violation of Indiana law; 2) whether the IURC should have appointed a Special Administrative Law Judge to conduct a formal investigation into reports of behind-closed-doors communications, undue influence, conflicts of interest, and other misconduct involving high-level officials of Duke Energy and the IURC; and 3) whether the IURC failed to act as an impartial judge by directing Duke Energy to hire an outside consultant to monitor problems at Edwardsport and report to the IURC on its progress, and then refusing to place the reports into the public record.

"Citizens Action Coalition is certainly pleased that Duke has committed to permanently moth-balling a dirty coal-fired power plant. However, we and our allies will remain diligent in continuing our fight against the scandal-ridden Edwardsport IGCC power plant. Ratepayers should not be forced to pay one more penny for that fiasco,” said Kerwin Olson, executive director of Citizens Action Coalition.

In a 2012 poll released by the Sierra Club, 81 percent of Duke Energy ratepayers favored expanding renewable energy sources, such as solar and wind energy, in Indiana. Additionally, by more than a two-to-one margin, ratepayers supported phasing out some of the state’s coal-fired power plants and replacing them with local renewable energy sources.

“States like Iowa and Michigan are already reaping the enormous benefits that come with the expansion of clean, renewable energy like wind and solar. Iowa today gets more than 25 percent of its power from local wind energy, and Warren Buffett’s MidAmerican Energy recently announced a wind-power investment that is the largest economic-development investment in Iowa history. Michigan and Ohio both rank in the top 10 nationally for jobs in the solar industry,” said Steve Francis, chair of the Sierra Club’s Hoosier Chapter. “This is the direction we need for Indiana, a state that holds enormous potential for renewable energy development. This settlement will help create local Hoosier jobs in growing renewable energy industries.”

Since January 2010, more than 50,000 megawatts of coal-fired power have been retired or committed for retirement nationwide.

Link to agreement: LINK

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BACKGROUND: Indiana gets more than 90 percent of its electricity from burning coal. Coal-fired power plants are the nation’s largest source of mercury, sulfur dioxide pollution, carbon pollution, and many other pollutants that can trigger heart attacks and contribute to respiratory problems.