Colorado PUC Panel Explores Energy Storage, Distributed Generation

The Colorado Public Utilities Commission tackled an ambitious – and highly technical – agenda on April 23 for the fourth panel in the ongoing proceedings related to retail renewable distributed generation and net metering (Docket 14M-0235E).  In addition to discussing distribution system design and ancillary benefits, solar PV system sizing and panel orientation, and minimum bill design, the PUC’s most recent panel discussion also dived into the current costs and economics of energy storage and the regulatory changes needed to encourage energy storage projects.

Solar carport

Ben Kaun of the Electric Power Research Institute (EPRI), Ryan Hanley of SolarCity, and Sky Stanfield of the Interstate Renewable Energy Council each spoke as part of the on-site storage panel.  Kaun emphasized that that traditional metric of the Levelized Cost of Energy (LCOE) is not suitable when evaluating energy storage applications.  Instead, a lifetime Net Present Value (NPV) approach should be employed to consider the full range of costs and benefits associated with energy storage. Hanely spoke on behalf of several distributed solar stakeholders (including Vote Solar).  Mr. Hanley emphasized, however, that policies are needed which recognize the full range of benefits distributed storage can provide and allow participants to realize the revenues associated with those benefits.  Furthermore, widespread deployment of smart inverters is needed to fully recognize the multiple benefits of distributed storage.  Sky Stanfield presented specific regulatory recommendations from IREC’s February, 2015 report, “Deploying Distributed Energy Storage: Near-Term Regulatory Considerations to Maximize Benefits.”

Ken Wilson of Western Resource Advocates, Lynn Worrell of Public Service Company of Colorado (PSCO), and Ryan Hanley of SolarCity addressed distribution system design and ancillary benefits.  Wilson offered that Advanced Distribution Management System (ADMS) is the software heart of an integrated grid. Worrell claimed that PSCO was “looking into” ADMS.

Tom Beach from Crossborder Energy, Dan Harms from La Plata Electric, and Kent Scholl from PSCO addressed PV system size, orientation, and location.  Answering Commission questions regarding value of west-facing PV, Scholl found that the incremental value of decreasing peak load doesn’t make up for value reduction of lost power.

Jim Lazar from the Regulatory Assistance Project, Alice Jackson from PSCO, and Marc Kolb from SolarCity addressed minimum bill design.  Lazar introduced the minimum bill concept comparing it to a “two drink minimum” at a bar. Representing The Alliance for Solar Choice, Kolb proposed a minimum bill of $13.63 (including existing facilities and service charge).  PSCO countered with a proposal of $35.03 (audible gasps could be heard in audience).  Lazar said PSCO’s number concerned him because they likely included distribution charges.

Chairman Epel seems intent on narrowing the gap between minimum bill proposals from the solar industry and the utility.  We urge the Colorado Commission to ensure that any minimum bill proposed by a utility must be cost justified using data that is transparent to stakeholders.  While the future of net metering remains uncertain in Colorado, it appears the Commissioners will not make any changes to PV maximum system size or panel orientation.

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