State panel approves Xcel solar, rates deal
Environmental and solar energy advocates are hailing state regulators’ approval of a landmark, far-reaching Xcel Energy deal with implications not just for that industry but for how all of the utility’s residents in Colorado someday may be charged for their electricity.
The state Public Utilities Commission OK’d the deal Wednesday. Twenty-four of 26 intervening parties, from industrial power users to consumer-advocate and conservation groups to solar interests, joined in all or parts of the settlement agreement. It covers three different Xcel cases that had been before the PUC.
Xcel calls it the largest agreement of its kind ever in Colorado.
Among the provisions:
■ Net metering — which means customers get credit for the energy that their solar installations produce — will be available to all of Xcel’s 1.4 million customers in Colorado, rather than just ones participating in Xcel’s solar programs.
■ Xcel will work to boost the ability of low-income customers to benefit from solar power, both through private projects at their homes and as participants in community solar installations, also known as solar gardens. A portion of Xcel’s solar garden offerings will be reserved for low-income customers, and the private program will lead to solar being installed at 300 homes, with the help of the Colorado Energy Office. The agreement also more generally provides for increased solar capacity for community and large solar programs.
■ Xcel will offer voluntary new “time-of-use” and time-differentiated rate programs to up to 20,000 customers next year, a number that will grow to 48,000 by 2019. The programs offer lower energy rates when electricity demand and the cost of providing electricity area are lower, and reflect varying demand levels at various times of day.
The Colorado Solar Energy Industries Association, or COSEIA, said in a news release Wednesday that because solar generates electricity during most of the higher-demand hours, time-of-use rates “more fairly account for the value of solar to all ratepayers.” The net-metering credit for solar would be higher during higher-rate periods.
The new rate program will require meter upgrades. If it proves successful, all residential customers could be transitioned to the rate program in 2020.
The deal helps address some of the challenges Xcel and other utilities have faced when it comes to net metering. Utilities recover system costs through electricity sales, and argue that some of those costs get shifted to other customers when those with solar panels get credited for the full retail rate of electricity the projects generated.
Erin Overturf, a senior staff attorney with the Western Resource Advocates conservation group, said Xcel sought to address this through a proposed grid use charge along with a tiered electricity rate based on the amount of energy consumed. But she said that hit a lot of resistance from consumer and environmental advocates and the solar industry, in part because of concern that customers could find it hard to understand and could end up with big bills.
She called the time-of-use approach “a really nice compromise” that still lets Xcel recover costs.
Overturf is excited about the PUC’s approval of the settlement, and hopes it can serve as a model for working through difficult issues elsewhere when it comes to solar power and utilities.
“We see it as a really unique thing with this many parties, this many disparate interests coming together,” she said.
Among other provisions of the agreement, it provides:
■ Doubled capacity for commercial solar systems. “COSEIA believes Colorado’s commercial market has a large unmet solar demand and the settlement provides a start toward improving market conditions for this sector,” it said in its release.
■ Authorization for Xcel to build a 50-megawatt solar project called “Renewable*Connect.” Customers could subscribe to the project for a monthly charge and get credit for the energy obtained. “Renewable*Connect provides another option to consumers looking to take advantage of future investments in renewable energy,” Xcel said in an August news release announcing the settlement agreement.
■ Measures addressing battery storage. These measures would support renewable energy storage at homes or businesses, provided that safety and technical requirements are met.
■ Recycled energy opportunities in the industrial sector. This involves conversion of waste heat to electricity. “It’s a really underutilized and a really exciting technology,” Overturf said.
“(Wednesday’s) decision will allow Colorado’s vibrant solar industry to move ahead in deploying clean, affordable solar energy and planning for next-generation policies and technologies,” Rebecca Cantwell, COSEIA’s executive director, said in the group’s news release.
Joshua Epel, chairman of the PUC, praised the agreement Wednesday after the PUC approved it, calling the work of the parties that drafted it “a real Herculean effort.”
“The settlement is broad and comprehensive and will continue the trend that Colorado is a national leader in thoughtful development of renewable energy,” he said.
Alice Jackson, regional vice president for rates and regulatory affairs for Xcel Energy in Colorado, said in Xcel’s August news release that the settlement “will allow us to meet our customers’ expectations by giving them more control over their energy choices. It will bring more renewable and carbon-free energy to Colorado through the use of new technologies, and it will provide affordable and reliable energy to further power the state’s economy.”