An eye-popping announcement came last week from Colorado's largest utility, Xcel Energy. It plans to install 170 megawatts of utility scale solar plus 450 MW of new wind power, and contract for 317MW of gas capacity to balance the renewables, plus the aim to retire one small coal fired unit. This announcement came with the comment by Xcel's CEO David Eves to the Denver Business Journal that utility-grade solar is cost-competitive with natural gas. This is without even taking into account carbon costs or compliance with the renewable energy standard. Solar makes the cut "strictly on an economic basis," he said.
That solar cost is big news for utilities where sunlight is bright and these economic values can be felt. And it's very good that Xcel is stepping up more to clean up its generation. It's provoking then, that utilities like Xcel are also racing to scale back rooftop solar. Utilities allover have been taking steps to kill or scale back net metering policy that allows homeowners to enjoy much lower bills due to their energy produced and used behind the meter.
This coiling back to strike at the advance of rooftop solar comes as investor-owned utilities and one trade group in particular have discussed the "disruptive challenge" that rooftop can bring to their profits. The problem is that rooftop is not owned by the utilities and cuts into their most valuable product -- power sold for air conditioning on sunny days. This presents a mortal threat, as told acerbically by David Crane, an energy executive. None more important than the Edison Electric Institute has written that distributed solar generation is a "game changer" to profit-driven utilities. (For excellent reviews of the EEI report, go here and here.)
Aiming to protect profits for its shareholders, Xcel's compliance plan in July asked the Public Utilities Commission to categorize net metering credits as "subsidies" and downgrade the value of the power, even to the point of potentially charging solar producers for their energy savings. According to Vote Solar, Xcel's proposed multiplier for power produced at residences could roll back its value by roughly 60 percent, even when that power is used behind the meter without using utility infrastructure.
Xcel has also produced a study on the value of rooftop solar to engage the PUC into a "transparent discussion" on the costs they see. Recall that four years ago Xcel attempted to get solar residences hit with a surcharge for transmission and distribution; the uproar was so bad Xcel withdrew the idea but proposed an independent study to assess costs and benefits of rooftop solar in the area. Since then, in a 22-month span to work (by PUC mandate) with a Technical Review Committee of solar stakeholders and tech experts, 15 months passed with no meetings with the TRC, and then Xcel filed the study by surprise. "There was and continues to be a lack of transparency and access to data for TRC members," commented Annie Lappe of Vote Solar.
Vote Solar and Cross Border Energy reviewed Xcel's study and found a dozen solar benefits for the grid and ratepayers that are undervalued or wholly omitted, amounting up to $11 million in annual benefits to the system. For example, creating energy without water or toxic emissions were omitted, as was the value of delivering energy to neighbors and trimming demand on the grid during risky peak times.
The long list of groups supporting Vote Solar have found that Xcel's report (which can be downloaded here) is loaded with unexamined platitudes, painfully small samples, and old data that don't hold up in an energy world moving fast. My own read of the study found pompous, unexamined assertions plus this laugh-out-loud line from the conclusion: "increasing the amount of distributed solar over and above the levels studied here are likely to result in lower net benefits given the law of diminishing returns."
Diminishing returns is now a law, like gravity? Okay, whatever.
Aside from reading like a college paper at some points, Xcel's report truly misleads on diminishing returns by sidestepping the giant returns at the center of the picture -- their profit margins in Colorado. Xcel's profits on electricity sales in Colorado rose by twice in the past 10 years bringing an after-tax profit margin of nearly 14 percent, according to SEC filings as studied by city council candidate Sam Weaver among others with Empower Our Future in Boulder (see #5).
Imagine earning fourteen percent with no competition -- nice return if you can get it! In fact Xcel's profit margin on electricity in Colorado's is up to five times higher than what some other IOU's make. Xcel's privilege is Colorado's embarrassment. Our state is being used as a cash cow, and the utility intends to increase this exploitation by angling to "own it all" where solar is concerned. This situation must frame the defense of rooftop solar that distributes ownership and savings to ratepayers, nourishes the grid, and reduces emissions and water use. Xcel's attack on net metering makes us confront the question: Who should own solar generation when the monopoly model is losing favor, and when this monopoly in particular is protecting embarrassing profits?
As for next steps for Vote Solar and its wide host of allies for clean energy and lower bills, the request to the PUC is for a complete review of the Xcel study to be done in "a workshop process run by the PUC" said Annie Lappe in a presentation with Clean Energy Action. "Our areas of disagreement with Xcel's study are small but they are intense" she said, noting that Xcel got many things right in their study. It would be good, then, after the faux collaboration Xcel has foisted in the process of creating this study, to see the solar stakeholders present and vocally involved.
"We're here to protect the customer's right to do whatever they want behind the meter," said Lappe. Yes, there is a libertarian element here. The monopoly cannot own it ALL.
How to vote
Vote-by-mail ballot request deadline: Varies by state
For the Nov 3 election: States are making it easier for citizens to vote absentee by mail this year due to the coronavirus. Each state has its own rules for mail-in absentee voting. Visit your state election office website to find out if you can vote by mail.Get more information
In-person early voting dates: Varies by state
Sometimes circumstances make it hard or impossible for you to vote on Election Day. But your state may let you vote during a designated early voting period. You don't need an excuse to vote early. Visit your state election office website to find out whether they offer early voting.My Election Office
General Election: Nov 3, 2020
Polling hours on Election Day: Varies by state/localityMy Polling Place