January 30, 2012

2011 Year-in-Review for Connecting to the Grid

Just when you thought you’d seen your last “Best and Worst of 2011” list… This month, I took time out to reflect on 2011’s Policyland roller coaster, to celebrate the novel advancements and lament the setbacks. Let’s start with the good news (and luckily, there were plenty of candidates). I found the following regulatory snapshots…

Just when you thought you’d seen your last “Best and Worst of 2011” list…

This month, I took time out to reflect on 2011’s Policyland roller coaster, to celebrate the novel advancements and lament the setbacks. Let’s start with the good news (and luckily, there were plenty of candidates). I found the following regulatory snapshots to be particularly ground-breaking:


1.) Hawaii Interconnection

On November 29, 2011, the Hawaii Public Utilities Commission issued an order that significantly improved Hawaii’s interconnection procedures, known as Rule 14H. In addition to other improvements, a unique supplemental review process was incorporated into Rule 14H to allow a generator to avoid more intensive study if the “aggregate capacity per Line Section is below 50% of the Line Section minimum kW load during the period when the proposed generation is available.”  Then, in December, the Hawaii PUC issued another favorable decision that broke further ground in several burgeoning interconnection issues.


Why this matters:  Hawaii has proven its place among the leaders of clean energy policy in the country. This shift away from a hard 15% (of line section peak load) interconnection screen, in favor of a more flexible 50% of minimum load screen has already begun to pique the interest of other states that are experiencing high solar adoption rates.  In other words, this development can allow more solar to safely connect to the grid, in more places.


2.) Delaware

In July of 2011, the Delaware Public Service Commission adopted interconnection standards that apply to all types of distributed generation systems less than 10 MW in capacity that are sited in Delmarva’s service territory.   During the rulemaking procedures, the IREC model was often discussed and many of its “best practice” attributes were implemented. These changes brought Delaware from an F in Freeing the Grid to an A.  Earlier in 2011, the PSC also adopted rules for meter aggregation and community renewables.


Why this matters: High system size limits for interconnection allow non-residential customers (and community groups) to install systems capable of meeting their annual energy needs if they choose to do so.  This results in systems with a lower installed cost per kW and allows these systems to contribute to meeting the state’s RPS goals.


3.) Community Renewables

Despite the myriad potential setbacks, Community Renewables is surging ahead across the country.  For a brief run-down: Colorado has been carefully working its way toward regulations to allow Solar Gardens (not to mention plenty local governments taking up Solar Garden initiatives on their own volition); the Maryland has been working through the regulation process for meter aggregation; California has been working to expand Virtual Net Metering; and Delaware adopted rules for meter aggregation and community renewables.


Why this matters: Because of shading and structural considerations, most residential systems are not ideally suited to host a solar facility. Community rules allow them to invest in an off-site system, expanding the pool of eligible solar owners.



4.) Massachusetts DPU continues to raise the bar for net metering and interconnection

Over the past year, the Massachusetts Department of Energy Resources has gone to great lengths to improve the process and fairness of distributed generation policies in the state. Early in 2011, the DOER conducted a survey of interconnection customers, which helped inform an extensive distributed generation study of recommendations for improvement. Massachusetts continues to work on these issues through several dockets that address net metering project queue management, net metering of municipal facilities, and interconnection process improvement.


Why this matters: By reaching out to gather opinions and experience of distributed generation customers, we can tell that Massachusetts is actively interested in making real process-related improvements that can help spur growth in the market, while remaining within the mandates of state law.


5.) Interconnection in West Virginia

On June 30, the West Virginia Public Service Commission issued a ruling that significantly improved the state’s net metering rules and interconnection procedures (which were based on IREC’s own model Interconnection Procedures). Notably through this work, the State also joined the elite (but growing) club of states that allow virtual meter aggregation.


Why this matters: This work moved West Virginia’s net metering rules from a D to an A, and from an N/A to a solid B in the 2011 Freeing the Grid publication.  This complete policy overhaul represents real progress, which can have a significant impact in jump-starting a state’s renewable energy economy.


6.) California, a thought leader among states

Obviously, California would be on this list, as it continued to serve as a policy leader in 2011 with several important regulatory actions. Since the beginning of last year, the California Public Utilities Commission has been working to expand Virtual Net Energy Metering (VNM) options in the state. First piloted under the California Solar Initiative for affordable housing complexes, the CPUC has been authorized to expand VNM to the general multi-tenant market.  Within the past year, California has also begun to reform the state’s Interconnection Rule 21, with the creation of a drafting group and multi-stakeholder negotiation process.  Rule 21 has long been a solid set of interconnection procedures but as a result of the growing complexity in the solar market, it’s due for an update.


Why this matters: Even though California has been a national leader for installed solar capacity, the state continues to push forward, proving that policies need to continually evolve with the changing markets, in order to stay relevant. 


7.) Mississippi continues along the path toward net metering and interconnection rules

On January 6, 2011, the Mississippi Public Service Commission issued an order establishing a docket (# 2011- AD-2) to investigate the development and implementation of net metering and interconnection standards. The commission also recently hired consultants to provide recommendations for adopting state-appropriate regulations.


Why this matters: Mississippi, Tennessee, Alabama and South Dakota are currently the only four U.S. states that have no net metering option. This shows real progress that may also make Mississippi’s neighbors, Alabama and Tennessee, sit up and take notice.


8.) New York investigates kWh crediting

Beginning in late January 2011, the NY PSC initiated a proceeding requiring all utilities in the state to explain how they credit net-metered customers for excess generation that is exported to the grid.  The PSC looked into this issue in order to verify that solar customers are not disadvantaged by the date of their annual reconciliation with the utility, and that utilities are properly calculating customers’ bill credits.


Why this matters: Like the Massachusetts, this work shows a public utility commission that is engaged and interested in understanding and improving the implementation of its distributed generation regulations.


And, I would be remiss if I didn’t mention a couple less-than-positive developments to emerge last year:


9.) Virginia SCC approves controversial net metering standby fee

Any residential customer of Dominion Virginia Power who owns and operates net-metered generation systems of 10 – 20 kW can now expect to pay a new monthly standby charge as authorized by state law during the 2011 session of the General Assembly. In December, the Virginia State Corporation Commission approved a standby charge methodology that allows Dominion to recover its transmission and distribution costs.


10.) California’s SDG&E appeals for network use charge

In October 2011, San Diego’s SDG&E utility proposed a new “network use charge” that the utility says is designed to divide operational costs among solar-owning and non-solar-owning customers more equitably. Existing net-metering law prohibits utilities from imposing fees that are exclusive to net-metered customers. Instead, SDG&E would apply the network use charge to all customers, which could have the effect of penalizing net metering customers who use the “network” more frequently.

Why these matter: Obviously these reflect setbacks to the renewable energy community that has long fought for fair and equitable renewable energy policies that appropriately value distributed generation’s benefits to the grid.


So, despite the setbacks, 2011 proved to be another year of growth and policy develop- ment. Here’s to another year of progress that helps advance our clean energy economy! Stay tuned.



Laurel Varnado