Unit Cost Guide released, improving cost certainty and interconnection for distributed generation

cpucThe Clean Coalition has succeeded in its initiative for all of California’s investor-owned utilities (IOU) to publish a Unit Cost Guide that will help guide distributed generation project applicants through the interconnection process with improved pricing transparency, predictability, and consistency.

For years, the Clean Coalition has generated improvements to the California Public Utilities Commission’s (CPUC) Rule 21, which regulates interconnection, operation, and metering requirements for distributed generation in California and serves as the foundation for standards in many other states. Most recently — and with the support of CPUC staff and Commissioner Sandoval — the CPUC adopted important new reforms the Clean Coalition has long sought to reduce risk and uncertainty in the interconnection process.

The forthcoming Unit Cost Guides, due for release in October, contain both component costs and examples of a variety of project sizes, energy sources (generation and storage), and locations deemed relevant to interconnection applicants. Updated on an annual basis, it will require each IOU — including Pacific Gas and Electric, San Diego Gas and Electric, and Southern California Edison — to publish appropriate and useful information distributed generation facilities can use to interconnect to the IOU’s respective distribution system. Specific elements in the Unit Cost Guide include: overhead costs (including new poles and excavation), metering requirements, telemetry, engineering, construction and other labor costs, and all system equipment.

Overall, the Unit Cost Guide is designed to support consistency and inform applicants of typical component and configuration costs when planning projects and assessing their costs, helping to interconnect renewable energy onto the existing distribution grid.

The publishing of the Unit Cost Guide is yet another victory following years of efforts by the Clean Coalition to improve Rule 21. The Clean Coalition will continue to see that the benefits of distributed energy resources are unlocked and help expand California’s transition to clean energy.

Georgia Power CLEAN programs deploy over 500 MW of local solar

solar-installersCLEAN programs (Clean Local Energy Accessible Now) are currently purveyed throughout the United States as programs that make it easier to build clean local energy projects, get them connected to the grid, and establish long-term contracts to sell the power produced to utilities. Georgia Power’s recent success with their CLEAN programs and distributed solar is indicative of real solutions solving real energy problems at the local level.

Since the Clean Coalition’s inception, we have worked tirelessly to proliferate CLEAN programs around the country. Working with utilities and local governments, the Clean Coalition incentivizes the process by offering clear solutions benefitting the communities involved, their economies, and the environment.

Georgia Power — owned by Southern Company, the third largest utility in the United States — has figured out a way to offer benefits to its customers that many utility companies haven’t attempted yet: with wholesale distributed generation (WDG). WDG refers to distributed generation systems that connect to the local distribution grid and sell the electricity they produce to the local utility. The clean local energy produced by WDG is used to serve local energy demand.

The decreasing costs of solar installations, increasing costs of electricity, and efforts by the Georgia Public Service Commission have paved the way for Georgia Power’s CLEAN program growth in the state. Georgia Power’s advanced solar initiatives combined with progressive research and forward thinking state energy policies have launched the utility into the national spotlight as a clean energy leader while unleashing WDG. Its significant solar potential went largely untapped until the Clean Coalition introduced their CLEAN Program guidelines and design to the utility in 2012.

Georgia Power serves electricity to over 2 million customers in the State of Georgia, and continually seeks opportunities to deploy renewable energy. Georgia has highlighted clean energy because of its economic benefits, the state’s population growth, and the overall importance of renewable energy.

In an effort to deploy more solar power, the Georgia Public Service Commission approved the Georgia Power Advanced Solar Initiative in November 2012. The initiative was primarily formed to inspire economic growth within Georgia, while offering standardized pricing that encourages more renewable development and avoids any upward rate pressure and reliability impacts to their customers.

Through this initiative, Georgia Power would acquire 210 MW of new solar photovoltaic (PV) capacity through standardized long-term contracts over a three-year period. Of the 210 MW, 90 MW will be procured through a CLEAN Program, while the other 120 MW will be procured through RFPs.

The initial design included two programs that were aimed at increasing solar development in Georgia: 1) offer existing Georgia Power customers additional options to sell distributed solar generation back to Georgia Power through small- and medium-scale power purchase programs; and 2) offer solar developers the opportunity to bring large PV solar arrays to market through a competitive utility-scale RFP. 

Subsequently, in July 2013, the Georgia Public Service Commission approved an additional 525 MW of solar capacity as part of the 2013 Integrated Resource Plan order. These additional megawatts of solar capacity were similarly allocated between the distributed generation and utility-scale programs. When its efforts are completed by the end of this year, Georgia Power will have nearly 800 MW of new WDG (solar) in its energy portfolio.

CLEAN Programs are focused on the WDG market segment with 100% of the energy sold to the utility on a wholesale basis rather than reducing behind-the-meter load to offset retail energy purchases. Georgia Power’s solar initiatives allowed local businesses, residents, and organizations to install local, renewable energy projects in underutilized spaces such as rooftops and abandoned lots.

Georgia Power’s CLEAN Programs streamlined procurement through a standard offer pricing mechanism, just like a feed-in tariff. In addition, their CLEAN Programs also streamline interconnection, which is one of the biggest obstacles to getting commercial and industrial projects deployed. CLEAN Programs in Georgia drove deployment of renewable energy projects to targeted locations on the grid. Overall, CLEAN Programs were shown to represent the most effective approach for Georgia Power to procure cost-effective local renewables.

Over the next five years Georgia Power has approval to unleash and deploy an additional 1.6 gigawatts (GW) of WDG. This will be in addition to the 800 MW of WDG that was initiated from Georgia Power’s advanced solar initiatives and CLEAN Programs. This milestone equates to nearly 2.5 GW of WDG that will be deployed by Georgia Power Company in the near future.

From an economic perspective, abundant solar resources, falling prices for solar panels, declining installation costs, and a push to add more MW of solar to the grid are benefiting all customers in Georgia. From an environmental perspective, the decreased use of fossil fuels from old power plants — and falling reliance on transmission infrastructure — is cleaning up the state’s air for future generations.

The Clean Coalition continues to work with utilities to come up with innovative solutions in achieving similar successes to Georgia Power’s. Read the Clean Coalition’s full Georgia Power CLEAN brief here.

Clean Coalition joins working group focused on New York interconnection reform

nyc-nightFor over six years, the Clean Coalition has advocated for — and succeeded in achieving — interconnection reform to make it easier and cheaper for renewable energy facilities to gain access to the electric grid. The Clean Coalition’s efforts have focused on proceedings in California that have served as a foundation for updated Federal Energy Regulatory Commission standards and model interconnection practices elsewhere. In alignment with New York’s broader Reforming the Energy Vision (REV) initiative, and in response to advocacy from stakeholders, the NY Department of Public Service created interconnection reform technical and policy working groups with our participation. These working groups aim to replicate successful practices and lessons learned from California, Massachusetts, and elsewhere.

In California, the Clean Coalition has helped bring improvements to Electric Rule 21 — the law regulating interconnection, operation, and metering requirements for distributed generation in the state — including publishing interconnection maps, developing pre-application reports on grid constraints, and advancing methods to streamline the application and review process. The California Public Utilities Commission released a new ruling this summer that improved cost certainty for clean energy interconnection processes, provided contractual interconnection cost certainty, and required the utilities to publish a Unit Cost Guide and standards for the treatment of storage facilities.

In New York, the Clean Coalition policy team has worked to better define the methodologies and goals involved in REV. The team leveraged our experience leading the implementation of California’s Distribution Resources Plans, which inform REV goals and technical practices. The lessons learned in California stress the need to begin modeling the New York distribution grid to determine optimal locations for deploying DER that will provide the highest value to ratepayers.

The Long Island Community Microgrid Project also highlights the Clean Coalition’s work in New York. The project was an early grant recipient of the New York Prize Community Microgrid Competition, another component of REV. Once completed, the project will provide cost-effective and reliable local renewable power to the East End of Long Island — contributing to saving hundreds of millions of dollars in avoided transmission upgrades and demonstrating the feasibility of high levels of local renewable energy.

Members of the Clean Coalition policy team now have sitting positions on two New York Public Service Commission working groups to help reform the state’s interconnection policies and technical practices. Demand for interconnecting distributed energy resources like solar and energy storage to the grid is expected to increase 250 percent by the end of 2017.

Interconnecting renewable energy and energy storage technologies can be an expensive endeavor and, so far in California, the Clean Coalition has been very successful in joining together stakeholders, policymakers, and the largest investor-owned utilities to help reduce the risks and financial liabilitites for project developers and ratepayers. The cost certainty methodologies we advocate for will translate well in the New York market and help push REV initiatives forward to accelerate the state’s transition to a cleaner, more reliable, and more resilient electric grid.

Peninsula Advanced Energy Community to kick off with strong support‬‬‬‬‬‬‬‬

parallax-volts-solar-carport-750x400The Clean Coalition’s Peninsula Advanced Energy Community (PAEC) project — which received a grant from the California Energy Commission in March — will officially launch in July. The PAEC is staged to proliferate policies and cross-fertilize projects that facilitate advanced energy solutions like local renewables, energy efficiency, electric vehicle charging infrastructure, and Solar Emergency Microgrids. It covers a core region in southern San Mateo County and a broader region that extends across the entire County and appends the City of Palo Alto. PAEC collaborators include numerous municipalities, Pacific Gas & Electric, and a multitude of leading property owners like Facebook, Stanford University, and Kaiser Permanente. See the growing list of PAEC collaborators.

The overall PAEC coverage region is representative of typical urban-suburban California areas: largely built-out and struggling with the pressures of development. The Clean Coalition is confident that the PAEC can be replicated widely across California and beyond.

The State of California encourages the creation of Advanced Energy Communities as places where electricity demand is met through efficiency, renewables, and storage. In order for the PAEC to be successful, replicable, and aligned with the State’s vision, it must meet these strategic goals:

  • A high percentage of power in the coverage regions are generated from local, renewable sources.
  • The energy used by residential and business customers are used as efficiently as possible.
  • New commercial construction consists 100% zero net energy and more than 50% of existing commercial buildings retrofit to zero net energy buildings, all before the CEC’s 2030 Title 24 building energy efficiency requirement.
  • Interconnecting local renewables to the electrical grid is straightforward.
  • The grid is stable, robust, and reliable.
  • Energy storage is affordable and widespread.
  • Electric transportation replaces the internal combustion engine and electric vehicles in the coverage regions support the grid.
  • Solar Emergency Microgrids are installed at all critical facilities, including police and fire stations, emergency operations centers, and emergency shelters.

The Clean Coalition plans to share future updates from the PAEC’s development as they transpire over the next several months.

Reducing risk for solar developers under Rule 21

cpucFor years, the Clean Coalition has been a leading intervenor in the California Public Utilities Commission (CPUC) proceeding addressing Electric Rule 21, which regulates interconnection, operation, and metering requirements for distributed generation in California. Past improvements to Rule 21 that the Clean Coalition had advocated for and achieved include publication of interconnection maps, development of pre-application reports on grid constraints, approval of clarifying regulations, and advancing methods to streamline the application and review process. With the support of CPUC staff and stakeholders, on June 23, the Commission adopted important new reforms the Clean Coalition has long sought to reduce risk and uncertainty in the interconnection process. Commissioner Sandoval in particular deserves credit for her leadership in securing unanimous support for our preferred solutions.

The interconnection process has been marred by a lack of cost certainty for developers selling power to the utilities (that is, projects that connect on the utility side of the meter). These developers face costs that are neither pre-established nor standardized, and after a potentially costly study process interconnection applicants are liable for expenses untethered to the original estimates. These risks discourage development and increase project financing costs, leading to higher energy prices.

The Clean Coalition proposed and advocated for a number of measures to reduce this uncertainty, which the Commission adopted in this Decision. These include publication by each utility of a “Per Unit Cost Guide” to improve cost transparency, consistency, and predictability throughout the interconnection process; enhancements to the Pre-Application Report; adoption of clear standards for the review and interconnection of storage devices; and, most significantly, the ability to rely upon utility estimates.

The Cost Certainty Option, building on earlier efforts in Massachusetts, will offer a bankable guarantee that the final costs will be within 25% of the utility estimate by allowing a more detailed pre-contract estimation process that may require an additional 30–60 days. This is further supported by new utility reporting to track and improve estimation processes and accuracy.

The Cost Guide will contain both component costs and examples of a variety of project sizes, energy sources (generation and storage), and locations deemed relevant to interconnection applicants — annually updated with input from applicants.

Following this victory on Rule 21, the Clean Coalition will continue our work creating fair, transparent, and streamlined interconnection processes in both California and New York as these major markets seek to capture the benefits of distributed energy resources. The Clean Coalition commends the Commission and parties to the proceeding for moving forward with solutions that will help shape and expand the landscape of California’s clean energy future.