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W I L L T H E F E D S P R E S E R V E
E L E C T R I C I T Y M A R K E T C O M P E T I T I O N ?
T H E P O W E R O F A P E ...
H U G E C L E A N E N E R G Y
P O T E N T I A L
23%
49%
All buildings
Source: http://www.nrel.gov/docs/fy16osti/65298.pdf
R O O F T O P S O L A R P O T E N T I A L 2 0 1 ...
POTENTIAL PERCENT OF
ELECTRICITY FROM
ONSHORE WIND POWER
0 TO 10%
10 TO 25%
25 TO 50%
50 TO 100%
100% OR MORE
W I N D P O ...
B I G B E N E F I T S
R E N E WA B L E
B E N E F I T S
0
3
6
9
12
15
Jan-2002 Jan-2004 Jan-2006 Jan-2008 Jan-2010 Jan-2012 Jan-2014
Natural Gas ...
D I S T R I B U T E D
B E N E F I T S
Solar on Littlestown Hospital
D I S P E R S I N G 1 - M W S O L A R P L A N T S
R E ...
L O C A L E C O N O M I C B E N E F I T S
1 megawatt
$2.5 million
20 jobs
Source: ILSR, 2014
$5.4 million in energy savings
C O M M U N I T Y
O W N E R S H I P
B E N E F I T S
How Green Energy Farmers busted the barriers:
Formed several,
unrelated LLCs with
only Iowa owners.
State regulation Pass-...
O P P O R T U N I T Y AT
C O M M U N I T Y S C A L E
C O M M U N I T Y W I N D - S O L A R H Y B R I D
• Wind power for reliable,
low-cost power
• Solar power for peak
energy
...
C O M M U N I T Y W I N D - S O L A R H Y B R I D
• 20 local construction jobs,
and 1.5 ongoing
maintenance positions
• $8...
H O W D O E S I T F I T ?
C O S T O F E L E C T R I C I T Y
G E N E R AT I O N T R A N S M I S S I O N D I S T R I B U T I O N
3¢ 3¢ 4¢
If customer ...
VA L U E O F D E L I V E RY
G E N E R AT I O N T R A N S M I S S I O N D I S T R I B U T I O N
3¢ 3¢ 4¢
3¢ 6¢ 10¢
If custo...
VA L U E O F D E L I V E RY
G E N E R AT I O N T R A N S M I S S I O N D I S T R I B U T I O N
3¢ 6¢ 10¢
Wind-solar hybrid
P O L I C Y L I M I TAT I O N S
A U C T I O N S FAV O R L A R G E P R O J E C T S …
… 1 ) B E C A U S E A U C T I O N S TA K E
O V E R H E A D
… 2 ) B E C A U S E T H E Y D O N ’ T C O U N T
D E L I V E RY C O S T S
G E N E R AT I O N T R A N S M I S S I O N D I S ...
T H E F E D S F I G U R E D I T
O U T I N T H E 1 9 7 0 S
G E N E R AT I O N T R A N S M I S S I O N D I S T R I B U T I O N
3¢ 3¢ 4¢+ +
1 9 7 8 P U B L I C U T I L I T Y R E G U L...
B U T
T H E R E
WA S A
M I S S I N G
P I E C E
G E N E R AT I O N T R A N S M I S S I O N D I S T R I B U T I O N
3¢ 3¢ 4¢+ +
The utility claims this “Avoided cost”
A R ...
G E N E R AT I O N T R A N S M I S S I O N D I S T R I B U T I O N
3¢ 3¢ 4¢+ +
But a wind-solar hybrid has a
higher “Avoid...
S TAT E S A L R E A D Y D O I T
• For distributed solar,
Minnesota’s value of solar
counts the avoided
distribution and
tr...
G O O D A N D B A D —
S TAT E S C A N I M P L E M E N T
M I N N E S O TA
• Complaint filed against
Otter Tail Power for fair
avoided cost
• Investigation requested
into avoided co...
M I C H I G A N
• Proceedings underway
since May 2016 aim to
establish an updated,
more complete
methodology for
calculati...
M O N TA N A
• In 2016, utility won
suspension of 6.6¢, 25-year
PURPA contracts
• FERC found action
inconsistent with law,...
N O R T H
C A R O L I N A
• High avoided cost (5¢)
led to over 2,000 MW of
solar development under
PURPA
• Duke Energy pro...
I D A H O
• Reduced PURPA contracts
from 20 years to 2 years
I M P L I C AT I O N S O F
D O I N G I T R I G H T
• Cheaper electricity
• Local jobs
• Local revenue
• Local tax base
T H A N K Y O U !
@johnffarrell
www.ilsr.org
C H A N G I N G
T H E R U L E S
P R O V I D I N G
T O O L S
1 0 0 % R E N E W...
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Will the Feds Preserve Electricity Market Competition?

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The 1978-era Public Utility Regulatory Policies Act (PURPA) is under fire, but does a law passed in an era of shag carpeting just as out of fashion or still essential to preserving market competition?

Published in: Business

Will the Feds Preserve Electricity Market Competition?

  1. 1. W I L L T H E F E D S P R E S E R V E E L E C T R I C I T Y M A R K E T C O M P E T I T I O N ? T H E P O W E R O F A P E A N U T FA R M E R ’ S “ P U R PA ” John Farrell Director of Energy DemocracySeptember 12, 2017
  2. 2. H U G E C L E A N E N E R G Y P O T E N T I A L
  3. 3. 23% 49% All buildings Source: http://www.nrel.gov/docs/fy16osti/65298.pdf R O O F T O P S O L A R P O T E N T I A L 2 0 1 6 POTENTIAL PERCENT OF POWER FROM LOCAL ROOFTOP SOLAR OVER 50% 40 TO 50% 25 TO 40% 11 TO 25% 2008 data 40-50% 25-40% Over 50% Over 50% 25-40% 40%
  4. 4. POTENTIAL PERCENT OF ELECTRICITY FROM ONSHORE WIND POWER 0 TO 10% 10 TO 25% 25 TO 50% 50 TO 100% 100% OR MORE W I N D P O W E R P O T E N T I A L 2 0 1 5 N R E L D ATA 35% c.f. or better 110m Source: http://1.usa.gov/1CUrAWk 35 states could get 100% or more
  5. 5. B I G B E N E F I T S
  6. 6. R E N E WA B L E B E N E F I T S 0 3 6 9 12 15 Jan-2002 Jan-2004 Jan-2006 Jan-2008 Jan-2010 Jan-2012 Jan-2014 Natural Gas Price Wind and Sun Price
  7. 7. D I S T R I B U T E D B E N E F I T S Solar on Littlestown Hospital D I S P E R S I N G 1 - M W S O L A R P L A N T S R E D U C E S I N T E G R AT I O N C O S T S 0 1 2 3 4 1 solar project 5 solar projects 25 solar projects 0.3¢ 1.1¢ 3.9¢ cents per kilowatt-hour Credit: USDA
  8. 8. L O C A L E C O N O M I C B E N E F I T S 1 megawatt $2.5 million 20 jobs Source: ILSR, 2014 $5.4 million in energy savings
  9. 9. C O M M U N I T Y O W N E R S H I P B E N E F I T S
  10. 10. How Green Energy Farmers busted the barriers: Formed several, unrelated LLCs with only Iowa owners. State regulation Pass-through to individuals For a limited time, the Production Tax Credit was available as a cash grant, more easily used by ordinary investors. Sold to the utility Electricity was sold via a power purchase agreement to the utility.
  11. 11. O P P O R T U N I T Y AT C O M M U N I T Y S C A L E
  12. 12. C O M M U N I T Y W I N D - S O L A R H Y B R I D • Wind power for reliable, low-cost power • Solar power for peak energy • Big enough to capture economies of scale (2) 2-megawatt wind turbines (1) 1-megawatt solar array 5 megawatts
  13. 13. C O M M U N I T Y W I N D - S O L A R H Y B R I D • 20 local construction jobs, and 1.5 ongoing maintenance positions • $87,000 in local tax revenue over 20 years • $500,000 in local participation revenue over 20 years (2) 2-megawatt wind turbines (1) 1-megawatt solar array 5 megawatts
  14. 14. H O W D O E S I T F I T ?
  15. 15. C O S T O F E L E C T R I C I T Y G E N E R AT I O N T R A N S M I S S I O N D I S T R I B U T I O N 3¢ 3¢ 4¢ If customer pays 10¢ per kilowatt-hour + +
  16. 16. VA L U E O F D E L I V E RY G E N E R AT I O N T R A N S M I S S I O N D I S T R I B U T I O N 3¢ 3¢ 4¢ 3¢ 6¢ 10¢ If customer pays 10¢ per kilowatt-hour
  17. 17. VA L U E O F D E L I V E RY G E N E R AT I O N T R A N S M I S S I O N D I S T R I B U T I O N 3¢ 6¢ 10¢ Wind-solar hybrid
  18. 18. P O L I C Y L I M I TAT I O N S
  19. 19. A U C T I O N S FAV O R L A R G E P R O J E C T S …
  20. 20. … 1 ) B E C A U S E A U C T I O N S TA K E O V E R H E A D
  21. 21. … 2 ) B E C A U S E T H E Y D O N ’ T C O U N T D E L I V E RY C O S T S G E N E R AT I O N T R A N S M I S S I O N D I S T R I B U T I O N 3¢ 6¢ 10¢
  22. 22. T H E F E D S F I G U R E D I T O U T I N T H E 1 9 7 0 S
  23. 23. G E N E R AT I O N T R A N S M I S S I O N D I S T R I B U T I O N 3¢ 3¢ 4¢+ + 1 9 7 8 P U B L I C U T I L I T Y R E G U L AT O RY P O L I C I E S A C T A R I G H T T O S E L L … Utilities must buy electricity from “qualifying facilities,” including wind and solar, at their “avoided cost” F E D E R A L L AW
  24. 24. B U T T H E R E WA S A M I S S I N G P I E C E
  25. 25. G E N E R AT I O N T R A N S M I S S I O N D I S T R I B U T I O N 3¢ 3¢ 4¢+ + The utility claims this “Avoided cost” A R I G H T T O S E L L … B U T A N U N FA I R P R I C E ? 1 9 7 8 P U B L I C U T I L I T Y R E G U L AT O RY P O L I C I E S A C T S TAT E I S S U E
  26. 26. G E N E R AT I O N T R A N S M I S S I O N D I S T R I B U T I O N 3¢ 3¢ 4¢+ + But a wind-solar hybrid has a higher “Avoided cost” A R I G H T T O S E L L … B U T A N U N FA I R P R I C E ? 1 9 7 8 P U B L I C U T I L I T Y R E G U L AT O RY P O L I C I E S A C T S TAT E I S S U E
  27. 27. S TAT E S A L R E A D Y D O I T • For distributed solar, Minnesota’s value of solar counts the avoided distribution and transmission costs
  28. 28. G O O D A N D B A D — S TAT E S C A N I M P L E M E N T
  29. 29. M I N N E S O TA • Complaint filed against Otter Tail Power for fair avoided cost • Investigation requested into avoided cost methodology for all utilities
  30. 30. M I C H I G A N • Proceedings underway since May 2016 aim to establish an updated, more complete methodology for calculating avoided cost • Goal: to adequately incorporate avoided transmission costs
  31. 31. M O N TA N A • In 2016, utility won suspension of 6.6¢, 25-year PURPA contracts • FERC found action inconsistent with law, but left it to developers to take legal action
  32. 32. N O R T H C A R O L I N A • High avoided cost (5¢) led to over 2,000 MW of solar development under PURPA • Duke Energy proposing to shorten contracts from 20 years to 5 years • State reviews every two years
  33. 33. I D A H O • Reduced PURPA contracts from 20 years to 2 years
  34. 34. I M P L I C AT I O N S O F D O I N G I T R I G H T
  35. 35. • Cheaper electricity • Local jobs • Local revenue • Local tax base
  36. 36. T H A N K Y O U ! @johnffarrell www.ilsr.org C H A N G I N G T H E R U L E S P R O V I D I N G T O O L S 1 0 0 % R E N E WA B L E L O C A L E C O N O M Y H U M A N S C A L E L O C A L O W N E R S H I P D E M O C R AT I C A U T H O R I T Y I L L U S T R AT I N G T H E V I S I O N

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