This document summarizes key points from a presentation on fair compensation for distributed solar generation. It shows that distributed solar provides benefits by offsetting natural gas power and reducing costs. It also outlines several state regulatory proceedings that are examining the costs and benefits of net metering programs and developing valuation methodologies to properly compensate for the value provided by distributed solar. The presentation concludes by providing contact information for the speaker if more information is desired.

1. Fair Compensation for
Distributed Solar Generation
Jason Keyes
Keyes, Fox & Wiedman LLP
October 21, 2014
www.irecusa.org
@IRECUSA
#3iForum

2. Photovoltaics Installations and Pricing
Source: GTM Research/SEIA, U.S. Solar Market Insight®, 2013 Year-In-Review

3. DC
Net Metering Program Caps
(percent of utility peak demand)
<
1
%
<
3
%
<
5
%
≥5%
Unlimited

4. 2014 Net Metering Grades
(www.freeingthegrid.org)
DC
A B C D F N/A

5. Valuation Highlights
• Energy value
• Capacity value
• Line losses
• Utility environmental

6. Valuation Highlights, cont’d
• Ancillary benefits
• Market price impacts
• Societal benefits
• Costs

7. AEE/Synapse Benefit-Cost Report
• Discussion
of
Societal
Benefits/Costs
• Various
Cost
Tests
• Screening
and
Decision
Analysis
Templates,
ValuaDon
OpDons
checklist

8. IREC’s Regulator’s Guidebook
Distributed Solar:
• Primarily offsets combined-cycle
natural gas facilities
• Should be credited with a
capacity value upon
interconnection
• Should include societal
benefits

9. Addressing the “Duck Curve”: TOU rates, demand
response, and storage
Credit: CAIISO’s Building a Sustainable
Energy Future: 2014-16 Strategic Plan

10. Avoided capacity costs

11. Hourly Loads for CA IOUs on 9/16/14
(and what they would have been without NEM solar)
25000
20000
15000
10000
5000
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
SCE
PG&E
SDG&E
Solar

12. Cumulative Loads for CA IOUs on 9/16/14
50000
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
SCE
PG&E
Solar
Capacity
SDG&E

13. PV narrows the peak, which could ease the ability of
demand response, storage, etc. to provide capacity
60,000
50,000
40,000
MW)
(Generation 30,000
20,000
10,000
0
PV Penetration and Hour 0% 2% 6% 10%
PV
CT
PS
Hydro
CC
Imports
Coal
Nuclear
Wind
Geo
Base 2% 6% 10%
(no PV)
Source:
NREL

14. NV:
PUC
docket
13-­‐07010,
E3
developed
study
proving
NEM’s
benefit
to
grid
VT:
2012
legislaDon
directed
the
V
PSB
to
complete
an
evaluaDon
of
NEM
MN:
2013
legislaDon
required
development
of
a
VOST,
methodology
complete
CA:
2012
legislaDon
required
a
CPUC
study
of
costs
and
benefits
of
NEM;
LADWP
considering
VOS
approach
AZ:
ACC
workshops
to
develop
methodology.
MulDple
studies
to
date
CO:
PUC
considering
Xcel
cost/benefit
study
of
NEM
TX:
AusDn
Energy
developed
a
VOST
in
2012;
San
Antonio’s
CPS
will
be
replacing
NEM
with
a
SunCredit
tariff
NC:
In
docket
No.
E-­‐100
Sub
136,
NCUC
is
examining
avoided
cost
methodology.
PNNL
study
just
released.
SC:
E3
chosen
to
develop
valuaDon
methodology
for
PSC
WA:
Docket
UE-­‐131883
to
discuss
costs
and
benefits
of
DG
LA:
Consultant
chosen
to
conduct
benefit/cost
study
OR:
PUC
recently
held
a
workshop
to
discuss
solar
rates
in
docket
UM
1452
HI:
NARUC
funded
a
NEM
benefit/
cost
study
from
E3
AL:
Consultant
hired
by
PSC
in
2014
to
study
costs-­‐benefits
of
NEM
MS:
ValuaDon
study
completed
ME:
2014
legislaDon
directed
PUC
to
complete
VOS
study
UT:
Defeat
of
proposed
solar
charge,
valuaDon
study
forthcoming

15. For more information
Jason Keyes
jkeyes@kfwlaw.com
irecusa.org