Xcel, advocates at odds over Minnesota solar gardens rules

(Midwest Energy News, November 11, 2013)—As customers begin putting money down to join one of Minnesota’s first community solar gardens, new comments to state regulators reveal significant disagreements about how the program should work.

A new state law requires Xcel Energy to develop a program that will allow customers to buy shares of power produced at nearby solar installations, known as community solar gardens.

The idea is to make solar power accessible to the majority of Minnesotans who either don’t own their home or have a rooftop that isn’t sunny enough, strong enough, or angled correctly for installing solar panels.

Xcel unveiled its plan for the program on Sept. 30, and last week solar developers responded with several objections over proposed fees, rates and restrictions the utility would place on the projects.

MN Community Solar started accepting deposits a few weeks ago for a 40-kilowatt solar garden to be built on the roof of a south Minneapolis warehouse. But it expects it will have to refund that money if major changes aren’t made to Xcel’s proposal.

“I don’t believe that we’ll have a successful [community solar gardens] program if we don’t get better terms. I firmly believe that it won’t be successful,” said Ken Bradley, CEO of MN Community Solar. Continue reading “Xcel, advocates at odds over Minnesota solar gardens rules”

In Minnesota, Xcel proposes to split revenue from energy sales

(Midwest Energy News, November 7, 2013)—Minnesota’s largest electric utility is asking state regulators to change the way it sets electricity rates so that it isn’t penalized when customers conserve energy.

As part of a rate increase request filed Monday, Xcel Energy is proposing to partially separate its revenue from electricity sales starting in 2015, a policy known as “decoupling.”

If electricity sales were lower than forecasted for a given year, the utility would be allowed to make up the difference by charging a higher rate the following year.

The reverse would also be true: if electricity sales exceeded forecasts, the utility would have to refund the surplus to customers through a lower rate the next year.

Energy conservation advocates say the decoupling arrangement removes a historical disincentive for utilities to invest in energy efficiency programs.

“It’s a very big deal. This fundamentally changes the nature of the business if it happens,” said Ralph Cavanagh, co-director of the Natural Resources Defense Council’s energy program. Continue reading “In Minnesota, Xcel proposes to split revenue from energy sales”

Minnesota forum explores models for the utility of the future

(Midwest Energy News, November 5, 2013)—Utilities face a flurry of threats to their business model, from rising expectations and falling sales to new competition and aging infrastructure.

Bill Grant, Minnesota’s Deputy Commissioner for Energy, summarized the pressures in his opening remarks Friday at a policy forum in St. Paul called “The Future of Minnesota’s Electric Utilities,” organized by the Environmental Initiative, a Twin Cities nonprofit organization.

For decades, utilities have operated by borrowing money to built new power plants, transmission lines and other infrastructure to meet society’s constantly growing demand for electricity, the sales of which paid down the debt and eventually turned to profit.

A wrench has been thrown in that once reliable pattern, though.

Ever since the start of the Great Recession, utilities have been selling less electricity. Even as the economy recovers, electricity demand isn’t rebounding, a sign that utilities’ and customers’ energy efficiency investments could be paying off.

Meanwhile, utilities’ costs aren’t going down. They still have debt to pay, repairs to make, and things to build. In fact, costs are often going up due to a combination of aging infrastructure, new environmental regulations and changing expectations.

Under the current model, utilities have few options besides increasing rates. Those higher rates then give customers greater incentive to lower their use through efficiency projects or solar panels, which further cuts into utilities’ sales.

“There’s a real threat of creating a death spiral if the current model persists,” Grant said. Continue reading “Minnesota forum explores models for the utility of the future”

Mixed rate impact from MN renewable standard

(Midwest Energy News, November 2, 2011)—In May, we surveyed a handful of electric utilities to ask how complying with Minnesota’s renewable portfolio standard was affecting their costs and rates.

For the most part, what we heard was that these utilities would be adding wind power capacity regardless of Minnesota’s renewable mandate because it’s economical and a good hedge against natural gas price volatility. There were outliers, though, namely Minnkota Power Cooperative, whose aggressive purchase of long-term wind contracts had resulted in a surcharge to customers.

At the time, the Minnesota Chamber of Commerce was lobbying for legislation that would require regular reporting from utilities on how much it was costing their customers to comply with Minnesota’s renewable standard, which calls for 25 percent of electricity to come from renewable sources by 2025. The bill was signed into law later in May with little opposition, because both critics and supporters of the state’s renewable standard believed the data would be in their favor.

We’ve just had a chance to review the first round of reporting generated by that legislation. The reports were due Friday and can be viewed in the Minnesota Public Utilities Commission’s edocket filing system (Search for docket #11-852). Continue reading “Mixed rate impact from MN renewable standard”