Op-Ed: No panels? No problem. The secret to solar in the city
[…] Instead of buying and installing solar panels on your home or property, you subscribe to a piece of a large local solar project nearby, often along with a few dozen to a few hundred other people who live in the area.
A portion of the electricity generated by these projects gets credited directly to your utility bill, you get a discount on electricity, and you don’t have to pay anything to join.
Read the full article from Crain’s here.
Locational value of DER is essential to grid planning. So why hasn’t anyone found it?
Initially, there was an incentive for customers to build DER at locations where congestion was anticipated, LeBel added. But setting that locational value “has proved to be more administratively complicated than expected and commission staff has proposed eliminating it.”
The utilities did “guesstimates and concluded congested locations should get 50% more than other locations,” he said. “They are not coming to terms with the details.”
Lebel agreed. Getting to that vision “would be a massive change for the utilities,” he said. “But it has happened. It took decades to get from PURPA to restructuring. Maybe, in the 2030s, we will look back at the 2014 start of the New York REV and see a similar transformation. And maybe things will still be changing.”
Read the full article from Utility Dive here.
New York Must Expand Solar: How Does Its New Net Metering Process Fit in?
Since 1997, New York has allowed customers with certain types of distributed generation systems, including rooftop solar (sometimes referred to as “mass market” solar) and community solar, to participate in net metering. This simple billing method allows a customer’s consumption and generation to be “netted” at the end of every month. If a customer has consumed more energy from the grid than she has generated from her solar panels, she will pay for the net consumption. However, if a customer has generated more power than she has consumed, then that net generation will be rolled over into the next month’s bill and credited toward future consumption at the retail rate—i.e. the same amount that the customer is charged for using a kWh of electricity.
This form of compensation (sometimes referred to as “retail rate net metering”) has supported solar expansion with a simple, predictable formula. However, because this form of net metering relies only on retail rates, which tend not to vary by time or location, solar systems are not always installed in areas where they are most needed or combined with other technology like energy storage to provide additional value to the grid. Some areas of the grid need more congestion relief, some hours of the day have higher electricity demand, and some distributed energy sources are cleaner than others.
New York has decided to move away from retail rate net metering and toward a smarter and fairer pricing scheme that reflects clean energy resources’ value to the grid. The state is now grappling with creating such a system while at the same time ensuring that this transition is gradual and understandable to consumers.
In 2015, the Public Service Commission (PSC) initiated the Reforming the Energy Vision (REV) process, which seeks to create a new utility business model that incorporates more distributed energy while ensuring that energy remains affordable, resilient, and reliable. Recognizing the need to develop a more accurate way of valuing these clean energy resources, in March 2017 the PSC issued an order transitioning from retail rate net metering to a net metering program referred to as Value of Distributed Energy Resources (VDER) that attempts to more accurately reflect the costs and benefits of these clean resources on the grid.
The first phase of the VDER process applies to larger solar installations including remote net metering (where the electricity produced from a solar installation at one location is credited toward electricity consumption at a different location) and community solar but not to residential rooftop solar. Phase One compensates these projects using a “Value Stack,” which identifies certain components that together represent the value of that clean energy to the grid. The values in the Phase One Value Stack include certain costs that the utility no longer has to incur, which are referred to as “avoided costs” and which are assigned a monetary value. These include:
- The cost of the energy that the utility would otherwise have to generate or purchase (referred to as “wholesale” energy);
- The amount of energy-producing resources that the utility would have to procure to meet demand (referred to as “capacity”); and
- The cost of delivering that energy to customers, as well as the higher costs of delivering the energy in certain congested areas of the grid.
In addition to these avoided costs, the Value Stack also includes a credit for the environmental attributes of certain types of clean energy, primarily the fact that they do not emit greenhouse gases.
A second phase of this transition (referred to as Phase Two Value Stack) is in process to further refine these values. After January 1, 2020, VDER will also apply to new residential rooftop projects under a new compensation method to replace traditional retail rate net metering.
New York’s Solar Gap
Because retail rate is a more straightforward, if blunt, method of net metering, developers may initially struggle to make an easy economic case for solar while transitioning to a value-based compensation structure. However, if done well, this new structure will allow solar to expand more efficiently in New York, with better outcomes for consumers and the climate. Continued expansion of solar is important, because in contrast to other Northeast states such as Massachusetts and Vermont, New York has relatively modest amounts of installed distributed solar given its population (Figure 1). It must accelerate to meet state and regional climate goals.
New York has set a goal of procuring 50% of its energy needs from renewable energy resources by 2030. As shown in Acadia Center’s EnergyVision 2030, with further strategic action New York can reduce greenhouse gas emissions 45% by 2030, a target that will put the state on a path to meet minimum EnergyVision 2030 recommends that, in addition to sharply increasing grid scale wind and solar generation, New York needs to add 13.7 GW of distributed solar, more than 10 times the amount that has been installed to date.
Figure 1 – Per Capita Installed PV
New York’s need for more distributed solar can be addressed from multiple angles: first, by making the transition to value-based compensation as gradual and understandable as possible; and second, by supporting solar expansion through complementary programs. Acadia Center has been an active participant in the VDER proceeding since its inception. Recently, staff from the Department of Public Service approved several changes to the Phase One Value Stack to expand the types of eligible renewable energy resources and make it easier for customers to participate and receive compensation. These changes include:
- Removing certain size limits from eligible clean energy resources
- Expanding the VDER compensation structure to storage and new forms of renewable energy such as tidal energy
- Removing location-based restrictions within utility territories
Acadia Center supported these changes and submitted comments with these and other recommendations for improving various elements of the value stack to make it easier for customers to receive compensation and to ensure these resources are appropriately compensated for the value they add to the system.
Acadia Center also supports solar expansion in New York through statewide initiative and grassroots campaigns. One such state initiative is NY Sun, a program administered by NYSERDA that seeks to add 3 GW of installed solar capacity in the state by 2023. The program works by establishing cash incentives for developers that decline over time as solar installation increases in certain regions of the state. Recently, NYSERDA made improvements to the program by expanding the incentives, supporting larger projects, and encouraging solar installations in a greater variety of locations. In addition, Acadia Center is a founding member of Million Solar Strong, which seeks to double this statewide goal to 6 GW of solar capacity by installing solar on 1 million homes by 2023, including 100,000 low-income households. The campaign has been meeting with public officials and building support around the state.
New York must make the leap to close its solar gap, and both regulatory solutions and grassroots support will be necessary. Together, these efforts have the capacity to make lasting change for this key technology.
N.Y. grid operator floats carbon price
The document is meant to get power-sector stakeholders down to brass tacks on how, in practical terms, New York can put a price on carbon if the U.S. government won’t.
Parties are digesting the proposal as they prepare for a May 14 meeting. The minute details will be heavily debated, but so far, many just seem glad the process is underway.
“NYISO’s draft proposal for a carbon adder would send an important and overdue price signal to the market necessary for New York to achieve its ambitious carbon reduction policies in place to meet long-term greenhouse gas reduction targets,” said Deborah Donovan, Massachusetts director for the Acadia Center, an advocacy organization focused on clean-energy issues in the Northeast.
Read the full article from E&E Energywire here (article may be behind paywall).
Central Hudson Agrees to Reduce Its Residential Customer Charge, Benefiting Consumers and Clean Energy
NEW YORK — On April 18, Central Hudson Gas and Electric proposed a settlement in its ongoing rate proceeding, in which it agrees to reduce its current electric and gas residential customer charge from $24 to $19.50 over three years. Central Hudson’s customer charge reduction makes it the first New York utility to reduce its customer charge in more than a decade.
Jen Metzger, Director of Citizens for Local Power, said: “Central Hudson’s historically high fixed charges have been a burden on many seniors and low- and moderate-income households, which tend use less energy. We welcome this important step in the right direction to alleviate this burden and make rates fairer by tying them more closely to how much energy customers actually use.”
Cullen Howe, Acadia Center’s New York Director, said: “Central Hudson’s agreement to reduce these regressive fees will benefit the majority of its residential customers. As the state looks to ramp up its efforts on energy efficiency and clean energy, Acadia Center believes it is crucial that New York utilities and regulators provide the right incentives to invest in these resources. Though Central Hudson’s fixed charge is still high and must continue to be lowered, other utilities should follow its example and begin reducing their customer charges as well.”
Also referred to as basic service or fixed charges, customer charges are flat fees that every customer pays, regardless of the amount of electricity or gas used. Across the country, fixed charges for residential electric customers typically range from $5 to $10 a month, but in some states — notably New York — these charges are significantly higher. Central Hudson’s current customer charges are the highest in New York and among the highest in the nation.
High electric customer charges disproportionately burden low-income customers, who typically use less electricity than average and generally benefit from lower customer charges. They also conflict with New York’s goals for a clean, modern, consumer-friendly electric system by removing any incentive for customers to lower their electricity bills through conservation, investment in energy efficiency, or renewable energy technologies like solar power.
While these reductions are an important step, other New York utilities have continued to maintain, or seek increases to, these charges. On March 15, for example, the Public Service Commission approved a decision allowing National Grid to maintain its existing monthly customer charge at $17, and Orange & Rockland County Utilities recently filed a rate proceeding seeking to increase its current $20 customer charge to $22. The New York Customer Charge coalition has set up a web site at www.lowerfixedcharges.org to continue advocating for lowering these charges and providing rate relief to low-income and low-usage New York energy consumers.
Jessica Azulay, Program Director at Alliance for a Green Economy, said: “We hope the Central Hudson agreement is the first step in a process to reduce fixed charges for all utilities across New York State. New York has set ambitious energy affordability and climate goals. Reduction in fixed charges is a major tool that utility regulators can and should use to accomplish both of those goals. We urge the Public Service Commission to use this tool aggressively to ease energy burdens for residential customers and incentivize conservation, energy efficiency, and investments in distributed renewable energy.”
Richard Berkley, Executive Director of the Public Utility Law Project of New York, said: “We are grateful to Central Hudson for taking the lead in beginning what will hopefully be a statewide reduction of New York’s extremely high customer charges. In a state where approximately half of residential energy consumers have trouble paying their utility and other vital bills such as food, medicine, mortgages or rent, taking concrete steps toward greater affordability by reducing these regressive charges is something we can all support, and we are equally grateful to our coalition partners and to the Department of Public Service for its assistance in bringing about the first reductions of these charges.”
“Fixed customer charges in New York are too high and are bad policy. This settlement marks an important step toward reducing the harmful effects that these charges have on customers, and in aligning rates with the New York vision for electricity markets,” said Karl R. Rábago, executive director for the Pace Energy and Climate Center and a former utility regulatory commissioner. “We are pleased that our years of work in rate cases in New York against these unfair utility charges is bearing fruit.”
Jonathan Bix, Executive Director of Nobody Leaves Mid-Hudson, said, “This nearly 20% reduction in Central Hudson’s fixed charge will increase affordability and decrease shutoffs for low-income customers. Although this reduction is a critical victory, Central Hudson and other utilities must continue to lower their regressive fixed charges, including Orange & Rockland Utilities through their current rate proceeding.”
Cullen Howe, Senior Attorney & NY Director
firstname.lastname@example.org, 212-256-1535 x501
Krysia Wazny, Communications Director
email@example.com, 617-742-0054 x107
For Fairer Electric Bills, Lower Fixed Charges
Residential electricity rates are typically comprised of two basic parts — a volumetric charge based on energy used and a monthly fixed charge, which is typically referred to as a customer charge. Customer charges are flat fees that every customer pays, regardless of the amount of electricity or gas used. Because utilities have a fixed revenue requirement, higher customer charges lead to lower volumetric charges, and vice versa.
Over the past several years, utilities across the country have pushed for higher customer charges, in part because they provide a guaranteed revenue stream. Acadia Center has developed materials showing that fixed charges for residential electric customers in most states typically range from $5 to $10 a month, but are much higher in New York, averaging close to $18. Central Hudson Gas and Electric’s current customer charge of $24 is the highest in New York and among the highest in the nation.
Why lower customer charges?
- High customer charges disproportionately impact low-income customers, who typically use lower than average amounts of electricity and who are often forced to spend significant amounts of their income on utility bills. While high customer charges might represent only a small fraction of a bill for higher-income consumers, these charges can represent a large portion of a low-income consumer’s bill, making energy costs proportionately greater for those on whom the burden is already greatest.
- High customer charges conflict with New York’s goals for a clean, modern, consumer-friendly electric system by decreasing incentives for customers to lower their electricity bills by investing in energy efficiency or distributed energy resources like solar power.
High customer charges don’t align with state goals
Importantly, high customer charges reduce the incentive for investment in energy efficiency. This is problematic as New York seeks to ramp up its efforts to improve statewide energy efficiency by announcing a plan to set a 2025 energy efficiency target by Earth Day. As Acadia Center has pointed out in its recently released EnergyVision 2030 Progress Report for New York, New York’s electric energy efficiency annual savings level is only 0.5%, compared to savings levels of 3.24% in leading states such as Massachusetts. As New York seeks to establish ambitious energy efficiency targets, it needs to set the right incentives to invest in these resources by ensuring that utilities reduce these charges.
Working toward rate relief
Things may be starting to change. On April 18, thanks in part to Acadia Center’s advocacy, Central Hudson Gas and Electric agreed to reduce its current electric and gas residential customer charge to $19.50 over three years in its ongoing rate proceeding, becoming the first New York utility to reduce its customer charge in more than a decade.
Acadia Center has set up a website with several other organizations at www.lowerfixedcharges.org to continue advocating for lowering customer charges to levels that provide rate relief to New York energy consumers and set New York on a path to meet its clean energy and energy efficiency goals.
Commission cuts National Grid rate hike plan
A chorus of opposition from upstate consumers and advocacy groups made a difference as state regulators severely limited National Grid rate increases. The new plan also sets the stage for expanded discounts for low-income households. The state Public Service Commission, in a ruling issued Thursday, allowed the company to phase in higher rates beginning April 1.
Read the full article from the Niagara Gazette here.
Albany Listening Session For Clean Transportation Is Positive First Step In Regional Commitment To Modernization
Jordan Stutt, policy analyst, Acadia Center, said: “The states are convening these conversations at an opportune time. Congested roads, outdated infrastructure and heavily polluting vehicles are a drag on the economy and our health. By working together, these states can implement regional solutions for clean and modernized transportation that will improve quality of life and reduce health risks from pollution.”
Read the full article from PR Newswire here.
Advocacy groups oppose National Grid rate hike
The groups that oppose the rate settlement include the Alliance for a Green Economy, PUSH Buffalo, Acadia Center and Syracuse United Neighbors. They jointly released a statement earlier this week opposing the plan, which would gradually increase the typical monthly residential gas and electric bill for upstate National Grid customers by $16 by 2020. The coalition said the rate plan did not go far enough to make gas and electric service affordable for low-income customers or do enough to push renewable sources of energy.
Read the full article from the Times Union here.
Consumer and environmental advocates release statements opposing National Grid settlement proposal
After months of negotiations, a Joint Proposal was filed Friday, January 19, in the National Grid rate case, representing the settlement position of some parties in the case. The new proposed increases are as follows:
Under the agreement, the fixed charge for electricity would remain at $17.00 per month. The fixed customer charge is the portion of the bill that does not change, no matter how much electricity the customer uses. For more information see: www.lowerfixedcharges.org.
The Joint Proposal will now be open for public comment and consideration by the Public Service Commission. In response to the filing, some parties to the case who do not support the settlement released the following statements:
Cullen Howe, Acadia Center’s New York Director, said: “Acadia Center is disappointed that the Joint Proposal filed today does not address National Grid’s high fixed charges of $17 per month for residential customers. In contrast to its high fixed charges in New York, National Grid has a residential fixed charge of only $5 in Rhode Island and $5.50 in Massachusetts. These high fixed charges reduce customers’ ability to lower their electricity bills by using less energy, and they are ultimately incompatible with the energy future envisioned by New York’s Reforming the Energy Vision, which anticipates wide deployment of distributed energy resources and increased energy efficiency. By not addressing these charges, these goals are much more difficult to achieve.”
Jessica Azulay, Program Director of Alliance for a Green Economy, said: “We are disappointed that we were unable to reach an agreement with the parties in this case that would prevent a rate hike and support the State’s environmental goals. While there are some improvements made in the filed agreement as compared to National Grid’s original proposal, it does not go far enough to protect low-income households and the environment. In particular, we oppose any rate increase at a time when there is already an untenable affordability and economic crisis in Upstate New York, and we further call on the Public Service Commission to reduce the fixed charges on our bills. These fixed charges, which customers must pay regardless of how much energy they use — disproportionately hurt low-income customers by impeding their ability to control their bills through conservation, efficiency, and renewable energy participation. Finally, we oppose the provisions in the proposal that support ratepayer investments and incentives for gas expansion. The climate crisis demands that we stop investing our public money into gas infrastructure and that we support renewable-based heating options instead.”
Clarke Gocker, Director of Policy and Strategy at PUSH Buffalo, said, “Low income National Grid customers in Buffalo and Western NY struggle to afford the high cost of utility bills and want nothing more than to take control over their energy consumption, whether it’s through conserving energy, participating in no cost or cost-effective energy efficiency programs, or accessing rooftop and community solar opportunities that afford them real decision making power and actual savings. The Joint Proposal filed today with the Public Service Commission in the National Grid rate case fails to deliver the kind of direct benefits that can permanently reduce household energy burdens and create the conditions for energy democracy in marginalized communities. While settlement negotiations in the case, together with fallout from the recent federal tax cut plan, have appeared to reduce the potential rate impact for customers, any increase in utility rates is extractive and unaffordable for low income customers in our community, and for that reason PUSH Buffalo opposes the terms reached in the Joint Proposal.”
Rich Puchalski, Executive Director of Syracuse United Neighbors, said: “The Joint Proposal fails to once again look at the historic policies that have forced high electric and gas rates on low income families in Syracuse for all too long. Those living in 1, 2 and 3 family poorly insulated wood frame homes are shelling out hundreds of dollars especially in the last couple of months of below freezing temperatures. Shutoffs will escalate. Credit will be ruined, and the poor can’t manage their way out of the bills they get from National Grid. And this is a 3-year plan! HELP.”
The public can submit comments to the Public Service Commission on the Joint Proposal at this web address: http://documents.dps.ny.gov/public/Comments/PublicComments.aspx?MatterCaseNo=17-E-0238
Comments can also be submitted through the following websites, which have samples and talking points available to aid in comment writing:
All documents related to the case can be found here:
Cullen Howe, Senior Attorney & New York Director
firstname.lastname@example.org, 212-256-1535 x501
Krysia Wazny, Communications Director
email@example.com, 617-742-0054 x107