[PDF] - iC III U ENERGY SECTOR MOST SUSCEPTIBLE T O F U T U R E PDF Document

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ENERGY SECTOR MOST SUSCEPTIBLE T O F U T U R E DISRUPTION

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Products
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VIABILITY

Comrns, Media and Tech
Heat! ano Pubhc 3
Fnanca Se! vices

VOLATILITY 0.0

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Meclian: 0.57

1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20

Retail Life Sciences Med:an: 0.51 Automotive

—

Infrastructure & Transportation Services

.

Software & Platforms

E&HT

Natural Resources Postal Media and Entertainment

\ Q

Services Communications

N

/

.

Q

—Travel

Banking Utilities Health Capital Markets CG&S Industrial Equipment and Machinery

/

Chemicals

Although the utility industry

is slightly

below the median for current level of disruption, it is above the median for future level of disruption.

DURABILITY

a

0.30 0.40 0.50 0.60 0.70 0.80 Insurance

Susceptibility to Future Disruption

VULNERABILITY

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SLIDE 4

P S C

ImeIine

for

SC

Energy Freedom Act

ASAP

Open docket for each utility Section 52-41-20 120 days

—

58-41-30: September 13, 2019 Review: Voluntary Renewable Energy Program 58-27-460 A(2)

NLT November

16, 2019 Review

standards for interconnection

f renewable

energy facilities January 1, 2020 Generic docket: Net energy metering programs ?? 58-40-20 F (1) Solar Choice Metering

Tariff, p. 17

?? Customer usage 58-27-845, pp. 11-12

January 2020—

With in 180 days of

pening community

solar programs docket, utilities update community solar programs

May 16, 2019

Governor signs bill. 58-27-460 (D) August 16, 2019 Establish reasonable interconnection guidelines. 52-41-40

60 Days

July 15,

2019 Open a docket to review community solar programs

r

58-41-20 A

NLT November 16,

2019 Decision: Avoided costs, methodologies, power purchase agreements, et.al.

4

SLIDE 5

PSC

T m e I i n e

f

r

S C

E n e r g y

F r e e d

m

Act

?? 58-37-60 ??

Independent

??

58272610H

study of 58-27-460

May 16,

(1) Promulgate

integrating Revisions to 2019 regulations renewa ble interconnection Governor

p. 21

energy into standards p. 28 signs bill,

grid p. 26

r

?? 300 days 58-37-40 Approve, Electric utility modify, or

IRP filings p.

deny electric

22 utility IRP filings p. 22

5

SLIDE 6

Chapter 41: Renewable Energy Programs

“

T h e

commission

i s

d i r e c t e d to a d d r e s s

all

r e n e w a b l e e n e r g y issues

i n a

fair and balanced manner, c

n

s i d e r i n g

t h e

costs and benefits to

all

c u s t

m

e r s

f

all

programs and tariffs

t h a t

r e l a t e to renewable e n e r g y and e n e r g y s t

r

a g e both as p a r t

f

t h e

utility’s

p

w

e r s y s t e m and as direct investments

b y

c u s t

m

e r s f

r

t h e i r

w

n e n e r g y needs and renewable goals.”

“

T h e

commission also

i s

d i r e c t e d t

e

n s u r e

t h a t t h e

revenue

recovery, c

s

t allocation, and r a t e design of utilities

t h a t

i t

r e g u l a t e s a r e j u s t and r e a s

n

a b l e and properly reflect changes

i n

t h e

i n d u s t r y as

a

w h

l

e ,

t h e

b e n e f i t s

f

c u s t

m

e r renewable energy, energy

e f f i c i e n c y ,

and demand r e s p

n

s e . . . ”

b

SLIDE 7

S t a n d a r d

Offer,

A v

i

d e d C

s

t s ,

e t c . Proceeding

Section 58-41-20

( A ) :

W i t h i n 6

months after the effective date of this c h a p t e r

( N

v

e m b e r

1 6 ,

2019), and

a t

least

n

c e e v e r y 2 4 months

thereafter

( N

v

e m b e r

1 6 ,

202?, N

v

e m b e r

1 6 ,

202?,...),

the

PSC

s h a l l

e s t a b l i s h

r

approve each e l e c t r i c a l

u t i l i t y ’ s

a v

i

d e d c

s

t r a t e s , a v

i

d e d cost methodologies, s t a n d a r d

f

f e r p

w

e r p u r c h a s e a g r e e m e n t s , form contract p

w

e r p u r c h a s e a g r e e m e n t s , commitment to

sell

forms, et.

al. ( D i s c u s s i

n

t

d

e c i d e )

W

i t h i n such proceeding,

the

PSC

s h a l l

approve

n

e

r more

s t a n d a r d

form p u r c h a s e p

w

e r agreements for use for small p

w

e r p r

d

u c t i

n

facilities n

t

eligible f

r the

s t a n d a r d

f

f e r ( p r

d

u c i n g u p

t

2

MW

Alternating Current).

7

SLIDE 8

Standard Offer, Avoided Costs, etc. Proceeding

Proceedings

s h a l l include an opportunity for intervention, discovery, filed

c

m

m e n t s

r

t e s t i m

n

y , and

an

evidentiary hearing.

Proceedings

m u s t b e

s e p a r a t e

from the electrical utilities’ a n n u a l fuel c

s

t p r

c

e e d i n g s .

.

. . t h e

P S C

s h a l l

treat

small

p

w

e r p r

d

u c e r s

n

a

fair and equal f

t

i n g with electrical u t i l i t y

w

n e d resources...

8

SLIDE 9

Standard Offer, Avoided Costs, etc. Proceeding

Section 58-41-20 (D): The PSC shall approve a standard notice of

commitment-to-sell form that provides small power producers a reasonable period of time from its submittal of the form to execute a power purchase agreement with an electrical utility at the rates, and pursuant to the power purchase agreement terms and conditions, then

in effect.

PSC shall receive purchase power agreements from electrical utilities

resulting from voluntary negotiation of contracts between an electrical utility and a small power producer not eligible for the standard offer (producing up to 2 MW Alternating Current).

9

SLIDE 10

F E R C

and

P U R P A

The Public

Utility

R e g u l a t

r

y P

l

i c i e s

A c t

f 7978 (PURPA)

was implemented t

encourage:

1.

The

c

n

s e r v a t i

n
f

e l e c t r i c e n e r g y .

2.

I n c r e a s e d efficiency

in

the use

f

f a c i l i t i e s a n d

r e s

u

r c e s

b y

e l e c t r i c u t i l i t i e s .

3.

E q u i t a b l e retail

r a t e s

for electric

c

n

s u m e r s .

4.

E x p e d i t i

u

s development

f

h y d r

e

l e c t r i c p

t

e n t i a l a t e x i s t i n g small dams.

5.

Conservation

f

n a t u r a l

gas

while

ensuring that r a t e s t

n

a t u r a l

gas c

n

s u m e r s

a r e e q u i t a b l e . One of the w a y s

P U R P A

set

u

t to a c c

m

p l i s h

its

g

a

l s was t h r

u

g h t h e e s t a b l i s h m e n t

f a

n e w

c l a s s

f

g e n e r a t i n g f a c i l i t i e s which would receive s p e c i a l r a t e a n d r e g u l a t

r

y t r e a t m e n t . G e n e r a t i n g f a c i l i t i e s

In

t h i s g r

u

p are k n

w

n

as

qualifying f a c i l i t i e s ( Q F s ) , a n d

f a l l

into two

categories:

qualifying small p

w

e r production f a c i l i t i e s a n d qualifying cogeneration facilities.

10

SLIDE 11

What

Is

a G S m a I I

P

w

e r Producer”?

16 U.S. Code 796: “A facility which is an eligible solar, wind, waste,

r geothermal facility or a facility which produces electric energy

using, as a primary source, of biomass, waste, renewable resources,

geothermal resources, or any combination thereof, and has a power production capacity.., not greater than 80 megawatts.”

FERC: “A small power production facility is a generating facility of 80

MW or less whose primary energy source is renewable (hydro, wind

r solar), biomass, waste, or geothermal resources.”

11

SLIDE 12

Standard Offer, Avoided Costs, etc. Proceeding

Section

5 8

4

1

2

E(2):

The

PSC is

authorized to open

a

g e n e r i c docket for creating programs for the c

m

p e t i t i v e procurement

f

e n e r g y and capacity from renewable e n e r g y facilities

b y

a n e l e c t r i c utility. ( D i s c u s s i

n

to decide)

E

( 3 ) :

In

establishing standard offer and form contract power p u r c h a s e a g r e e m e n t s , the

PSC

s h a l l

c

n

s i d e r

whether

such power

p u r c h a s e agreements should prohibit a n y

f

the

f

l

l

w

i n g :

t

e r m i n a t i

n
f

the power purchase agreement,

collection of damages from small power producers, or c

m

m e n c e m e n t

f

the t e r m

f

a

power purchase agreement prior to c

m

m e r c i a l

p

e r a t i

n

,

if

delays

in

achieving commercial

p

e r a t i

n
f

the

small power producer’s facility are due

t

the

e l e c t r i c a l utility’s interconnection delays; or

the

e l e c t r i c a l u t i l i t y r e d u c i n g

the

p r i c e p a i d to the small

p

w

e r p r

d

u c e r based

n costs

i n c u r r e d

b y

the

e l e c t r i c a l u t i l i t y t

respond to

the intermittent nature

f electrical

g e n e r a t i

n

b y

the

small power producer.

12

SLIDE 13

Standard Offer, Avoided Costs, etc. Proceeding

Section 58-41-20 Ff1): Electrical utilities, subject to approval of the

commission, shall offer to enter into fixed price power purchase agreements with small power producers for the purchase of energy and capacity at avoided cost, with commercially reasonable terms and a duration of 10 years.

The commission may also approve commercially reasonable fixed price power

purchase agreements with a duration longer than 10 years, which must contain additional terms, conditions, and/or rate structures as proposed by intervening parties and approved by the commission, including but not limited to, a reduction in the contract price relative to the 10 year avoided cost.

The terms of this subsection apply only to those small power producers whose

qualifying small power production facilities have active interconnection

requests on file with the electrical utility prior to the effective date of this act (“grandfathered”).

13

SLIDE 14

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SLIDE 15

U t i l i t i e s ’

Voluntary Renewable

E n e r g y

P r

g

r a m s

Section 58-41-30.

( A )

W i t h i n 120

d a y s

f the effective date of this

c h a p t e r (September

1 3 ,

2019), each electrical utility

shall

file

a

p r

p
s

e d v

l

u n t a r y renewable energy program for review and a p p r

v

a l

by

the

c

m

m i s s i

n

. (Discussion to d e c i d e )

The

PSC

s h a l l

c

n

d u c t

a

p r

c

e e d i n g to review the program and e s t a b l i s h r e a s

n

a b l e terms and c

n

d i t i

n

s f

r the

p r

g

r a m . Interested parties

s h a l l

h a v e

the

right to

participate

in

the proceeding.

The

PSC

may periodically hold

a d d i t i

n

a l proceedings to u p d a t e the p r

g

r a m . (Discussion

t

d

e c i d e )

15

SLIDE 16

Community S

l

a r P r

g

r a m s

Section 58-41-40

(B)(1):

W i t h i n 60 days (July

1 5 , 2 1 9 )

a f t e r the

e f f e c t i v e

date

f

t h i s c h a p t e r , the

PSC

s h a l l

p

e n

a

docket for each electrical utility to review their community solar programs and solicit status information

n

e x i s t i n g programs f r

m the

e l e c t r i c a l utilities. ( D i s c u s s i

n

t

d

e c i d e )

W

i t h i n 180 days

after the

c

m

m i s s i

n opens the docket

p u r s u a n t to

i t e m

( 1 ) ,

t h e

e l e c t r i c a l utilities s h a l l

update their r e p

r

t

n

t h e i r

existing programs and

t

p

r

p
s

e new p r

g

r a m s . (Discussion to decide)

16

SLIDE 17

Just and Reasonable

R a t e s

Section 58-27-845: In fixing just and reasonable utility rates pursuant to

Section 58-3-140 and Section 58-27-810, the PSC shall consider whether rates are designed to discourage the wasteful use of public utility services while promoting all use that is economically justified in view of the relationships between cost incurred and benefits received, and that no

ne class of customers are unduly burdening another, and that each

customer class pays, as close as practicable, the cost of providing service to them.

For each class of service, the PSC must ensure that each electrical utility
ffers to each class of service a minimum of one reasonable rate option

that aligns the customer’s ability to achieve bill savings with long-term

reductions in the overall cost the electrical utility will incur in providing electric service, including, but not limited to time-variant pricing structures.

17

SLIDE 18

N e t

M e t e r i n g

Section 58-40-20:

T h e General Assembly

r e q u i r e s

the

PSC

t

e

s t a b l i s h solar c h

i

c e

metering r e q u i r e m e n t s

t h a t

fairly

a l l

c

a t e costs and benefits to e l i m i n a t e any c

s

t shift

r

s u b s i d i z a t i

n

a s s

c

i a t e d with net m e t e r i n g to the g r e a t e s t e x t e n t practicable.

No

later than January

1,

2020,

the

PSC

s h a l l

pen

a

generic docket t

:
investigate

a n d

d e t e r m i n e the

costs and benefits of the current net energy metering program; and

establish

a

methodology for calculating the value of the energy produced

by

customer-generators.

( D i s c u s s i

n

to decide)

1$

SLIDE 19

Net Metering

Section 58-40-20 (D): In evaluating the costs and benefits of the net

energy metering program, the PSC shall consider:

the aggregate impact of customer-generators on the electrical utility’s

long-run marginal costs of generation, distribution, and transmission;

the cost of service implications of customer-generators on other customers

within the same class, including evaluation of whether customer-generators provide an adequate rate of return to the electrical utility compared to the

therwise applicable rate class when, for analytical purposes only,

examined as a separate class within a cost of service study;

the value of distributed energy resource generation according to the

methodology approved by the PSC in Order No. 2015-194;

the direct and indirect economic impact of the net energy metering program

to the state, etc.

19

SLIDE 20

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SLIDE 21

Net Metering: Solar Choice

Section 58-40-20 Ff1): After notice and opportunity for public

comment and public hearing, the commission shall establish a new

‘solar choice metering tariff’ for customer-generators to go into effect for applications received after May 31, 2021. (Discussion to decide)

Section 58-40-20 H: The PSC shall establish a minimum guaranteed

number of years to which solar choice metering customers are entitled pursuant to the commission approved energy measurement interval and other terms of their agreement with the electrical

utility.

Nothing in the section prohibits the commission from considering

and establishing tariffs for another renewable energy resource.

(Discussion to decide)

21

SLIDE 22

C u s t

m

e r

G

e n e r a t

r

Lessees and Exemptions

Section

5 8

2

7

2

6 1

H(1):

T h e

provisions

f

this

A r t i c l e 23

related to l e a s e d generation

f a c i l i t i e s s h a l l not apply to:

(a)

f a c i l i t i e s serving

a

single

p r e m i s e s

that

a r e not interconnected with

a

retail e l e c t r i c provider;

( b )

f a c i l i t i e s

wned