Local renewables being hit with a hidden transmission fee

The Clean Coalition is officially launching a campaign to remedy an unfair charge on local renewable energy in California.

Transmission Access Charges (TAC) are fees designed to pay for the state’s transmission grid. TAC are applied to every kilowatt-hour (kWh) of metered customer electric usage. When levelized over 20 years, TAC are about $0.03/kWh.

While TAC make sense for energy delivered through the transmission system, they are currently being misapplied to distributed generation (DG) facilities that serve local load and never actually utilize transmission.

For any utility within California that owns transmission under agreement with the California Independent System Operator (CAISO), which includes all major investor-owned utilities as well as most public utilities, CAISO levies TAC based on total metered customer usage within a utility’s service area each month. Utilities pass these costs on through the transmission and distribution (T&D) components of customer bills. The result is that customers are unfairly being charged $0.03/kWh on power they are receiving from DG systems, which never touches the transmission grid and so should not have a TAC applied. This improperly discourages development of distributed generation while encouraging unnecessary growth in costly transmission infrastructure.

Through this campaign, the Clean Coalition seeks to ensure proper valuation of local renewable generation. DG that serves local load must be recognized for avoiding TAC, which at $0.03/kWh comprise around 30% of the wholesale value of energy in California. Use of local energy should not continue to subsidize transmission infrastructure when these resources are actually reducing the need for future investments into the transmission system.

Individuals and organizations interested in learning more about our TAC Nexus Campaign should contact Sahm White at sahm@clean-coalition.org.

Viable solar sites assessed for the Long Island Community Microgrid Project

The Clean Coalition’s Long Island Community Microgrid Project, one of the first projects awarded funding by New York’s Governor Andrew Cuomo through the NY Prize Community Microgrid Competition, continues to progress on schedule.

As previously reported, the Long Island Community Microgrid Project, located in the Town of East Hampton, will achieve nearly 50% of its grid-area electric power requirements from local solar—avoiding hundreds of millions of dollars in transmission infrastructure investments that otherwise would be required to deliver power to the region. The result will be an optimized local energy system able to provide long-term, renewables-based, backup power for prioritized loads.

Clean Coalition staff recently completed a Solar Siting Survey to identify viable locations for PV on commercial and industrial properties within the Long Island Community Microgrid Project target grid area, namely the East Hampton GT substation that serves thousands of customers. Through this effort, we uncovered over 30 potential sites for solar PV installations, with a collective capacity of more than 32 megawatts (MW). This is more than enough solar PV potential to meet the 15 MW of capacity necessary for the Long Island Community Microgrid Project to meet its local renewable generation goals.

Likely structures for solar PV installations include open land and parking lots at the East Hampton Airport, rooftops at several middle and high schools, as well as multiple beach parking areas.

The Long Island Community Microgrid Project is consistent with the New York State Energy Plan and the Reforming the Energy Vision initiative, which lay out a comprehensive strategy to build a clean, resilient, and reliable energy system for the state. This leading project will establish a model for New York, and beyond, to utilize local renewables paired with other distributed energy resources to create cleaner, more reliable, and more affordable power.

The debate over NEM 2.0 continues in California

The California Public Utilities Commission (CPUC) proceeding on the development of a net energy metering (NEM) successor tariff for eligible customer-generators continues to spur debate among a number of stakeholders, including the Clean Coalition, which has been heavily involved in the process.

The existing NEM tariff allows customers who install small, on-site renewable generators to receive bill credits, at the retail rate, for power delivered to the grid. California law requires the CPUC to adopt a successor tariff or standard contract by the end of this year in order to allow new participants to join when the existing program expires. The NEM successor tariff will go into effect by July 1, 2017, or after a utility reaches the existing NEM program cap, which is 5% of aggregate customer peak demand.

On September 1, the Clean Coalition submitted comments reaffirming several key elements of the NEM successor tariff or standard contract. These include: retaining the ability for behind-the-meter self-generation; initiating a process to properly value distributed generation; ensuring NEM participants are not subject to fixed charges; and streamlining interconnection processes.

We suggested that the CPUC evolve NEM to encompass the key principles of self-generation and a feed-in tariff. Under this hybrid approach, future NEM participants will:

  • Meet on-site load with instantaneous on-site generation;
  • Export excess electricity to the local distribution grid and be credited at a feed-in tariff rate; and
  • Continue to buy all additional electricity, as necessary, from the local utility at the retail rate.

Opening up a proceeding to properly value distributed generation, as a value-of-solar tariff does for solar, would establish appropriate compensation for exported electricity. California is currently not engaged in such a determination, but the Clean Coalition believes it should be. Specifically, the CPUC should comprehensively value local generation—with consideration of locational benefits, such as avoided transmission and distribution (T&D) costs, as well as societal benefits.

With respect to interconnection of NEM systems, the three major California investor-owned utilities have proposed to impose a fixed charge on NEM participants. If the successor tariff follows our recommendations, these types of charges will never take effect. We believe a fixed charge for interconnection of NEM systems is misguided because NEM participants should not be penalized for self-generating and should only be responsible for the actual costs they impose on the grid. The Clean Coalition, in a separate proceeding, is calling for streamlined interconnecting processes that improve cost certainty and transparency in bringing local renewables online.

Numerous stakeholders and contentious issues in the NEM 2.0 proceeding make it difficult to predict how the next few months will play out. Nevertheless, the Clean Coalition will continue to push for an objective successor policy that establishes a sustainable, robust market for customer-owned, local renewable energy throughout California.