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Residential solar's proliferation has California utilities looking to end long-offered incentives

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Christopher Neely's picture
Independent Local News Organization

Journalist for nearly a decade with keen interest in local energy policies for cities and national efforts to facilitate a renewable revolution. 

  • Member since 2017
  • 725 items added with 353,749 views
  • May 27, 2021
  • 451 views

A battle is brewing in the California energy sector over what some deem a profit grab and existential threat to the growth of the solar industry and others defend as an overdue adjustment toward equity.  One lawyer, who has been practicing in the solar industry for 15 years, told me it's the biggest fight she's ever seen. 

Utility customers in California with rooftop solar systems enjoy comfortable incentives, which have stimulated the industry and helped make California the U.S. leader in solar production. Utilities are now aiming to decrease incentives and implement new solar fees, which they say will even out the financial burden taken on by non-solar and lower-income customers.  

Central Coast Community Energy, or 3CE, the clean energy-focused alternative to Pacific Gas & Electric for California's central coast, is proposing a new $4.50 per month fee for rooftop solar customers and a 60% cut in how much it pays solar surplus customers. J.R. Killigrew, 3CE’s communications director, says the utility's current incentive structure subsidizes 60-70% of the cost to serve rooftop solar customers, a burden that is taken on by non-solar and lower-income customers. The proposed changes would balance those scales.

Killigrew says the timing of its reprioritization of solar is bad, as it is unfolding against the backdrop of a more consequential fight happening at the state level between investor-owned utilities such as PG&E and the solar industry. Utilities are proposing changes to the state’s solar incentives, among them: a dramatic decrease in the value of surplus energy produced by rooftop solar.

While the sun is shining, rooftop solar customers often generate surplus energy. For years, the credit they receive for sending energy back to the grid has been equal to the retail price of solar, which means the utility buys the electricity for as much it would charge its own customer. This retail rate can cost utilities more than three times the wholesale market rate. Now that solar has grown rapidly across the state, utilities want the cost of rooftop-generated solar to be closer to wholesale rates. 

3CE’s proposed changes could earn final approval by its policy board of directors by June. PG&E’s changes will not be decided until year’s end, and the utility has guaranteed the current retail rate for at least 20 years. That lawyer I spoke with says this could mean a migration of customers away from the local community energy agency and back to PG&E.

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Bob Meinetz's picture
Bob Meinetz on May 27, 2021

"Central Coast Community Energy, or 3CE, the clean energy-focused alternative to Pacific Gas & Electric for California's central coast, is proposing a new $4.50 per month fee for rooftop solar customers and a 60% cut in how much it pays solar surplus customers."

I have to laugh when I see 3CE touted as an "alternative" to PG&E. Does anyone really think a 3CE customer's electricity is different from that of PG&E, which provides electricity to his next door neighbor?

3CE, like other "community choice aggregators" (CCAs) in California, is a scam. It's an unregulated non-profit that pays its administrators astronomical sums to buy electricity from PG&E, then resell it at a markup to unwitting customers, who believe they're being "green".

Though unregulated 3CE claims it's buying more solar electricity, it's a claim that's impossible to verify (California law permits CCAs to keep their power purchase agreements private). Any solar energy they do buy is in the form of "renewable energy credits", which they then sell to PG&E to offset its dirty gas generation. So your "100% solar" plan is, in environmental impact, only 50% solar. Depending on your usage, your electricity might even be generating more carbon emissions than PG&E's.

The ignorance of environmental policymakers in California is stunning. Calling them complicit would be a compliment - too stupid to engineer a convincing fraud, they just believe what they're told.

Shelly Whitworth's picture
Shelly Whitworth on May 28, 2021

I'd like to address the above comment since 3CE has evolved over the last three years, significantly. 3CE has contracted for over $1.1 billion in new long-term renewable energy and storage, committing to a pathway to 100% clean and renewable energy by 2030 and 60% clean and renewable through NEW resources by 2025. More info including PPAs here: 3cenergy.org/understanding-clean-energy

3CE launched in 2018 with a strategy of 70% large hydro and purchased large hydro credits to meet a 100% carbon-free power content label which was important to the communities it served at that time, but as 3CE became an established and financially stable agency, it sought to make more impactful GHG emission reduction it transitioned away from all carbon-free credits, focusing less on the importance of the power content label and more on true GHG reduction. 3CE's PPAs are board approved and available to the public short of agreement details that would harm the competitiveness of negotiations.

It is also true that once energy is added to the grid it is mixed with all other sources and 3CE can not tag electrons to be delivered to customer's locations, however 3CE's accelerated adoption of diverse renewable energy plus storage is cleaning up the grid along with the other 24 operational California Community Choice Energy agencies. 

Back to the article, 3CE has held workshops with all customer segments and has heard feedback. While the $4.50 was not an additional charge and it was simply pulled from the rate calculation, customers did not understand this and we are recommending to not move forward with the $4.50 fee. Instead, the cost would be within the rate. Communicating that the monthly fee was not an "extra" fee was proving too difficult. The next step is to see with 3CE's CAC recommends to the Policy Board following the staff presentation next week. 3CE continues to accept feedback as it navigates the waters among equity through its customer segment rate setting and the level at which 3CE will continue to incentivize rooftop solar while pursuing distributed storage and large-scale renewable + storage.

Bob Meinetz's picture
Bob Meinetz on Jun 2, 2021

Shelly, none of the claims you make are verifiable.

You say allowing customers to verify where you buy your energy, and how much you pay for it,  "would harm the competitiveness of negotiations." How? A similar argument was made by Shell Oil in the 1890s to conceal price-fixing and exploitation of consumers by the largest oil company in the world. (?)

Joe Deely's picture
Joe Deely on Jun 3, 2021

California and Western Grid Getting Cleaner

California is part of the the larger "Western Grid".  While not a true ISO yet - all Western states share electricity across borders whether it be zero carbon or fossil fuel based. 

The Western Grid is rapidly getting cleaner - coal generation has been declining rapidly and will essentially be gone from the West by 2030.

In recent months CAISO has begun to export large quantities of mid-day electricity - helping to make the entire Western grid cleaner.

For the next several years 8-10 GW of Wind/Solar capacity will be added to the Western grid every year.  This will effectively kill coal generation while keeping NG levels close to where they are today.  

By 2030 the Western grid will have a 70% Zero Carbon share.

New Nuclear out West?

The Western Grid may even have some new nuclear this decade.

TerraPower, founded by Gates about 15 years ago, and power company PacifiCorp, owned by Warren Buffet's Berkshire Hathaway, said the exact site of the Natrium reactor demonstration plant is expected to be announced by the end of the year.

The project features a 345 megawatt sodium-cooled fast reactor with molten salt-based energy storage that could boost the system's power output to 500 MW during peak power demand. TerraPower said last year that the plants would cost about $1 billion.

Chris Levesque, TerraPower's president and CEO, said the demonstration plant would take about seven years to build.

Also good to see that they will be picking an old coal plant as the site of this new reactor. This will make use of existing transmission and keep costs down.

...have selected Wyoming to launch the first Natrium reactor project on the site of a retiring coal plant, the state's governor said on Wednesday.

New Wind also Announced

It makes a lot of sense to use old coal/NG plant locations and their existing transmission for new zero-carbon generation and storage. On the same day that TerraPower made this announcement - Puget Sound Energy in Washington announced a deal to purchase wind from the Clearwater project - near the partially closed Colstrip coal plant in Montana.

The Seattle-area utility confirmed Wednesday morning that it has a 20-year contract with the owner of the Clearwater Wind project, a massive three-county wind farm being developed near Colstrip. Puget will purchase 350 megawatts of Clearwater capacity.

In May, wind farm owner NextEra Energy Resources told Lee Montana Newspapers the Clearwater construction would begin this summer.

Clearwater is a 750-megawatt wind farm with turbines slated for Rosebud, Custer and Garfield counties. 

The power is expected to come on line by the end of 2022.

Another Colstrip owner - PacifiCorp recently finished a separate nearby wind project,

The total cost of the Clearwater project hasn’t been disclosed, though PacifiCorp’s $406-million Pryor Mountain Wind project offers the best comparison. Pryor Mountain Wind, constructed in 2020, is a 250-megawatt wind farm near Bridger. It was constructed by another Colstrip owner, PacifiCorp.

 

 

 

Bob Meinetz's picture
Bob Meinetz on Jun 3, 2021

In Wyoming, wind is guaranteeing coal an unlimited future.

PacifiCorp is building a few wind turbines for show, then will tell Californians the 2.1 gigawatts of coal-fired power from Jim Bridger is renewable. They'll believe anything!

"POINT OF ROCKS — Around 700 workers pass daily through this blink-and-you-miss-it town in southwestern Wyoming heading to shifts in the Jim Bridger Plant, the Bridger Coal Company strip mine and the state’s only underground coal mine. They come to dig and burn coal that has helped power the nation for decades.

For their new role, engineers have spent the last three years adapting the coal furnaces, designed to run at the highest levels they can, to modulate production up and down as renewable power pulses onto the grid with the fluctuation of the wind and sun.

'Adapt or die,” Dollar said, though the change clearly irks. “We used to pitch, now we catch.'"

https://www.wyofile.com/jim-bridger-lighting-the-country-laboring-in-the...

Joe Deely's picture
Joe Deely on Jun 5, 2021

Bob,

Thanks for the article/link. I had not seen that.

Plus it talks about exactly where Bridger and the rest of the coal plants in Wyoming are going. Good stuff.

But with each passing day, the plant’s eventual demise looms larger. Like coal power plants and the mines that serve them all over the country, the Jim Bridger plant faces twin threats — the inexorable senescence of its technology and the concurrent rise of renewable energy and cheap natural gas that makes reinvestment in coal plants economically unwise. 

Just south and heading east of the plant and its four smoke stacks, cranes raise a series of towers from the sagebrush prairie. The skeletal frames await transmission lines that will carry electricity from wind turbine farms the plant’s owner, utility company PacifiCorp, is building in Wyoming. In front of the plant a 345,000 volt transmission line ties into an electric grid that lights homes and businesses in Utah and Idaho, Oregon, Washington and far-northern California. A cleared patch of earth waits for the new wind power lines to arrive and tie into the electrical system, further diminishing the need for the coal plant and its 500-foot chimneys

Spot on.

Bob Meinetz's picture
Bob Meinetz on Jun 7, 2021

Until the wind always blows, Warren Buffett can count on the buffoonery of renewables advocates to guarantee PacifiCorp's profitability and fossil fuel an unlimited future.

...the inexorable senescence of its technology and the concurrent rise of renewable energy and cheap natural gas that makes reinvestment in coal plants economically unwise. 

"Renewable energy and cheap natural gas" - like peas in a pod. You view dependence on fossil fuel as a solution to climate change, do you?

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