Monday, July 6, 2015

What is Xcel's real motivation in filing to limit overall Community Solar program size?

Xcel filed with the PUC against co-located Community Solar Garden's above 1 MW. Is Xcel’s real motivation to slow the Community Solar Garden program down so that it does not infringe upon their market share?
Co-locating CSG’s gives the overall CSG projects the same shared infrastructure benefits, cost efficiencies and economies of scale aspects that Xcel frequently uses to justify their preference of utility scale solar over residential. The PUC order actually recognized the benefit of co-locating CSG projects. It specifically states: “multiple community solar garden sites may be situated in close proximity to one another in order to share in distribution infrastructure.” Why would Xcel be against co-location when it takes advantage of shared infrastructure and drive down prices for customers? When it comes to community solar energy which Xcel doesn’t own, control and sell to others then they are willing to forfeit those economies of scale they say they value.
Although articles in the mainstream media might not spell it out, there is a rather obvious reason why Xcel is uncomfortable enough with CSG’s. When anyone decides to subscribe to a Community Solar Garden, Xcel essentially loses that former customer for the 25 year time period as far as energy supply. A devotion to maintaining market share is the reason Xcel so wants to instead build their own large-scale solar fields that mimic a central station power plant. Xcel can get their customers to pay for it and they get to keep them as full customers. 
Xcel/ NSP also used to fight small-scale and locally owned wind for much the same reasons. Xcel prefers renewable energy to be structured in a way that allows them to buy on bids using customer ratepayer dollars so it can be added to their base of assets. Investor Owned Utilities (IOUs) thrive on this base of assets because they are guaranteed profits by the PUC about a 10% rate of return. Xcel began 'rate basing' the wind farms, very parallel to what they are trying to do with utility scale solar today. As a result, much of the original locally owned wind operations have been driven into bankruptcy.
It must have sent a shock to Xcel when large customers like Ecolab, Inc. and Macalester College announced plans to offset their entire energy consumption through subsription to community solar gardens. About the same time Xcel Energy suspiciously made some quite significant changes to the language their community solar garden website. Their website in February read:
“There is no limit to the number of solar gardens which can be placed on a property, but no single garden can exceed the 1 megawatt PV system cap. While there is no program restriction on multiple gardens in one area, there could be technical limitations that could require expensive distribution system upgrades.”
Then shortly after, they vastly simplified the corresponding language in the latter version of the same website in order to make room for their pursuit of a setting 1 MW aggregate size limit:
 “The maximum solar garden system size is 1MW AC. The system size is based on the sum of the inverter(s) maximum AC output.”
Why this change in language? 

Xcel intended to have a more gradual phase-in of community solar than the 420 megawatts in CSG applications they received the first week of their program. What Xcel said in the April 28 filing was “If all current gardens in the queue were developed, the company would add nearly all of its planned distributed solar resources, not over 15 years, but in a single year.” 
Xcel basically wants to slow it down. They are fine with people having community-owned solar power, but just not have so much of it that they will no longer need Xcel. IOU’s in general fear a future where they're no longer needed. Xcel would do well to embrace a future in which they claim less than a monopoly on generation. Even with distributed generation, utilities like Xcel still have a purpose in being the central entity primarily responsible for transmission & distribution, reliability, grid management, etc. 

Xcel Energy in Wisconsin shows what it is like when they voluntarily choose to offer Community Solar, which is the first-ever community solar to its customers in Wisconsin. But they plan to offer community solar on a much smaller scale than the 80 megawatts they agreed to be willing to do in Minnesota. Absent a state statute in Wisconsin, Xcel gets to do community solar its way which is a maximum of 3 megawatts of solar power through three or four arrays in their Wisconsin Service territory. Here is another big difference on community solar in the neighboring states. While Xcel projects that Wisconsin community solar customers would receive credits of 6.9 cents or 7.4 cents per kilowatt hour, Minnesota community solar participants are expected to receive 12-15 cents per kilowatt hour. The same Wisconsin Public Service Commission (PSC) that approved increased fixed charges to solar homeowners approved this community solar proposal.

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