Chris Meehan
RENEWABLE ENERGY WORLD.COM - May 20, 2013 

At the heart of the issue was CPS Energy’s plan to change its net metering program, cutting the rate it paid for net-metered systems by almost half starting this November. On April 9, CPS Energy, a municipal utility, said under SunCredit the rates it paid for net-metered systems would have dropped from 9 cents per kilowatt hour to 5.6 cents per kilowatt hour, to start. As Vote Solar’s Annie Lappé, solar policy director, put it: “With this proposal, CPS is making solar users mini-solar wholesale generators that must sell all their resources to the utility. Essentially, it takes from San Antonians the right to reduce their electricity bill by installing solar energy on their roofs.” She added, “Second, the price that CPS is offering to pay these new mini-wholesale generators is far less than what the solar generation is worth.”

The utility planned to implement the new policy in less than a month after announcing it. Although this hardly gave the community time to respondundefinedit didundefineddid, led by local solar advocacy organization Solar San Antonio. “The introduction of CPS Energy’s SunCredit Program as a replacement for net metering set off an intense month of activity. Existing solar customers rejected the idea that CPS Energy could alter the terms under which they made their decision to purchase solar,” the organization said. “Solar installers calculated that the low proposed solar credit would put them out of business.” 

The organization sent a letter to the mayor’s office requesting that the program be delayed for at least a year and encouraged citizens to participate in a city council meeting. Prior to the meeting, 50 people signed up to protest the implementation. “On May 3, even more people showed up to voice their objections at the CPS Energy public gathering,” the organization said.

CPS Energy got the idea. On May 8, CPS Energy agreed to withdraw the SunCredit Program for one year, grandfather all applications coming in during that year into the net metering program, and establish a dialogue between the solar industry and CPS Energy to explore solutions to the many issues raised by the SunCredit controversy, reports Solar San Antonio. 

Now CPS Energy will work with the Texas solar advocacy group along with other members of the solar industry to create a solar policy that meets the needs of all. “The goal will be to develop a program that fairly addresses the issue of integrating distributed generation of solar into CPS Energy’s grid and business model,” the utility company said.

SPECIAL NOTE TO SACTF MEMBERS:

SB 385 (Texas Commercial and Industrial Property Assessed Clean Energy [PACE] Bill) has passed the Texas Legislature.  This is a huge win for clean energy in Texas.  In 2009, many local leaders worked to have a residential housing PACE bill passed in the Texas Legislature.  The key local leaders at that time were Rep. Mike Villareal, Larry Zinn (former Chief of Staff for Mayor Hardberger), and Laurence Doxsey (recently retired COSA Director of Sustainability). 

Their efforts were focused on residential PACE and ultimately numerous complications within Texas law prevented that effort from being successful.  But it is the seeds they planted in their effort in 2009 that have propelled SB 385 to success and will allow commercial and industrial PACE programs to start up and fund water and energy efficiency for the private sector throughout the State of Texas. 

Congratulations to Charlene Heydinger from "Keeping PACE in Texas" for her super efforts to push this bill through and her supporters.  Now, we await the Governor's signature or at least not a "veto".  We will make a special announcement once the bill has become law! 

Regards,
Scott D. Storment
Mission Verde Alliance/SA Clean Technology Forum

________________________________________________________

Texas Legislature Passes Commercial and Industrial PACE Bill

Kat Friedrich, Clean Energy Finance Center
May 20, 2013 

The Texas House and Senate passed Senate Bill 385 in May. If Governor Rick Perry approves the bill, the state will break new ground by developing plans for commercial and industrial property assessed clean energy (PACE) programs. This bill will redesign Texas's approach to PACE, focusing on the commercial and industrial sectors rather than on residential programs. The legislation covers both energy efficiency and water efficiency.

To facilitate local decision making, cities and local areas will partner with businesses and nonprofits to set up their own PACE programs. These programs will allow businesses to borrow money from private lenders and repay it yearly via an assessment on their property taxes. 

The bill has a solid foundation of support from a wide range of stakeholders including industry leaders and senior legislators. Charlene Heydinger, executive director of the nonprofit Keeping PACE in Texas, has built an effective coalition which includes large businesses and banks.

“PACE is the only solution out there that is totally market-driven, totally voluntary and local, and there are no mandates,” Heydinger said. “Our business community loves PACE because it is a real option for a solution without the drawbacks that have given people pause.” 

Momentum of PACE Programs 

PACE has been gaining traction nationwide since the first pilot PACE program in 2008, said David Gabrielson, executive director of PACENow. “It’s an idea that caught on very quickly and resonated all over the country.” However, some of the first generation of PACE bills were not designed for easy implementation. States are currently developing updated approaches to PACE.

In 2009, Texas passed a PACE bill which focused on residential energy-related programs. But because the bill was difficult to implement and the Federal Housing Finance Agency opposes residential PACE, PACE stalled in Texas. This year, Republican Senator John Carona introduced a new bill to improve Texas’s prospects for creating successful PACE programs. “I think Texas, in taking up this effort to get their legislation amended, is really on the cutting edge of states around the country,” Gabrielson said.

“We’ll put industrial PACE on the national map,” Heydinger said. Texas is a massive hub of industrial activity. Heydinger said Texas uses 19 percent of the energy used by industry in the United States. According to the United States Bureau of Economic Analysis, Texas was responsible for 8.73 percent of the national gross domestic product in 2011.

Collaboration with Banks 

Heydinger collaborated with financial stakeholders to make sure banks’ concerns were addressed. Their collaboration led to a new version of the bill which focuses on commercial and industrial sectors rather than the residential sector. 

“Two words, when spoken together, strike fear… and trepidation into the hearts of bankers, and that’s ‘priority lien,’” said Steve Scurlock, executive vice president of Independent Bankers Association of Texas (IBAT). “That is always a red flag. It was very important to us to make sure that the consent piece was very strong undefined that this would not happen without the consent and opportunity to do what the first lien holder would want to do.”

After the bill was revised, IBAT testified in favor of the House version of the bill. “We felt like it provided appropriate protections not just for our lenders, but for… consumers and building owners as well,” Scurlock said. “One of the things I like about the PACE bill this time is that there’s public/private cooperation. The primary funding for the projects is provided through the lending institutions and I think that’s a good thing.”

Control by Local Communities

“We have a very lean state government structure,” Heydinger said. Therefore, the legislation provides solutions which are inexpensive and simple for local and municipal governments to implement. The bill provides a flexible framework to allow local governments to partner with nonprofit organizations and businesses to set up PACE programs.

The bill does not specify extensive details as to how the individual programs will work, but it does outline guidelines for setting them up. The projects will be paid for through property assessments. They will be funded upfront by either governments or third parties. The financing may cover a variety of expenses including the cost of verifying savings. Project savings verification is required for every PACE activity in Texas. 

Local governments will be able to designate regions for the purpose of creating PACE programs. Heydinger said that in agricultural areas, counties may combine their resources to create joint PACE programs.

There are powerful incentives for local districts and cities to set up PACE and water efficiency programs. In addition to being job creation engines, these programs can reduce water shortages and brownouts, both of which are of concern to industry. Texas is currently experiencing a multi-year drought. Brownouts can lead to increased costs for chemical production factories, Heydinger said. 

Messaging for Business Leaders and Legislators 

“I speak business when I talk about PACE,” Heydinger said. “Our effort now in the next month is about the jobs, the economic impact, the ability to upgrade our existing infrastructure. The benefits of our work that are environmental are wonderful, but they don’t get traction here. We have approached PACE as an economic development bill.” 

Since the state legislature only meets for six months every other year, it was also crucial for Heydinger to use communication strategies that would appeal to legislators as persuasively as possible. When the Texas legislature puts a bill on the back burner, action can be postponed for years.

Heydinger said she has been impressed with the legislature’s commitment to addressing long-term infrastructure issues this year. “Good government invests in the future,” she said. This year, Texas’s legislature has focused on developing long-range plans for roads, construction, water conservation and energy efficiency. This bill is part of a larger emphasis on planning for Texas’s growth. Many people are moving to Texas from other states and nations.

“One of the things I… like about Texas is that they are very focused on results,” said Brad Copithorne, an energy and financial policy specialist at Environmental Defense Fund. “If something will create jobs and will stimulate the economy, that’s something they can agree on and make happen. We’re very pleased that this will lead to cleaner air and a healthier environment for everybody. If we can do this by allowing business to create jobs, that seems to me to be a win for everyone.”

SUSTAINABILITY SUMMIT FOR CORPORATIONS, SMALL & MEDIUM BUSINESS - HOW DOES SUSTAINABILITY PROVIDE SAVINGS AND BENEFITS TO YOUR BALANCE SHEET

Top notch sustainability professionals from Rackspace, USAA, Sea World, and PETCO will be presenters on corporate sustainability and best practices for companies to pursue and implement.  Also, discussion how sustainability might improve your opportunity as a vendor in the supply chain for some of the companies.

REGISTER VIA THIS WEBLINK:  https://www.northsachamber.com/calendar-of-events/
and then the 5/22 icon on calendar of  events.

See advertisement below for more information.  Morning workshop is $35 and lunch is $25, or combine workshop/lunch is $60.

Mission Verde Alliance is co-sponsoring a half day sustainability workshop including luncheon on Wednesday, May 22, 2013.  The event is targeted for Chief Sustainability Officers, environmental managers, energy managers, financial managers, and anyone looking to learn more about sustainability and how sustainability programs can be a tool to improve a company's bottom line and make your company "greener" at the same time.

This workshop is for small, medium, and larger size corporations that are interested in learning about the best management practices for a sustainability program.  We have a top-notch group of speakers and lunch panelists coming from USAA, HEB, PetCo, Rackspace and several other top firms. (see the list below on the advertisement)

We would highly urge members of the SA Clean Technology Forum to participate in the morning workshops which focus on energy management, water consumption reduction, and innovation in recycling programs.  Additionally, there will be a luncheon focused on supply chain management and how to leverage sustainability to reach your target customer.  Lots of great information and excellent contacts to be made at the CSO Summit - please see registration instructions on the advertisement below.

May 3, 2013

Environmental Leader Online

Hydraulic fracturing operations should scale up their use of recycled water and non-freshwater resources, and practice better water management planning if shale energy production is to grow as projected, a Ceres research paper says.

Most fracking to extract shale gas is happening in water-stressed regions of the US, such as Texas and Colorado, both of which are in the midst of prolonged drought conditions. The report highlights the growing tensions between increasing fracking activity and localized water supply needs, Ceres says.

The report is based on well drilling and water use data from FracFocus.org, collected on 25,450 wells in operation from January 2011 through September 2012, and water stress indicator maps developed by the World Resources Institute. The research shows that nearly 47 percent of the wells were developed in water basins with high or extremely high water stress (see map). Extremely high water stress means more than 80 percent of available water is already being allocated for municipal, industrial and agricultural uses.

Colorado and Texas showed the highest exposure to water stress. In Colorado, 92 percent of the wells were in extremely high water stress regions. In Texas, which accounts for nearly half of the total wells analyzed, 51 percent of the wells were in high or extremely high water stress regions. In some Texas counties, water use for hydraulic fracturing accounted for more than 20 percent of the region’s total water use.

In Pennsylvania, 70 percent of the wells were in medium to high water stress water basins and only 2 percent were in high water stress basins.

The report says the industry has made progress in boosting the use of recycled water and other alternative water sources for fracturing wells. Operators are starting to use non-freshwater alternatives such as wastewater, saline water, seawater and acid-mine drainage.

The report includes recommendations for companies and regulators, including:

• Comprehensive mandatory disclosure by companies of how much freshwater, non-freshwater and recycled water they are using, region by region, as well as how much water is returning to the surface and where it is ending up.
• Requirements for companies to set quantifiable water use targets, including recycling and non-freshwater use targets.
• Ensure that both companies and local regulators are conducting sufficient water management planning.
• Ensure that companies have a local stakeholder engagement process in place on water issues.

General Electric announced last month that it will build a $110 million research center in Oklahoma to study fracking technologies.

In March, Chevron, Shell and other natural gas companies and environmental groups formed a new Pittsburgh-based center that will set fracking standards for the Appalachian Basin.

http://www.renewableenergyworld.com/rea/news/article/2013/04/mosaic-making-money-from-solar-and-beyond?cmpid=WNL-Wednesday-May1-2013

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All rights reserved.

By Kate Galbraith, New York Times
April 27, 2013

http://www.nytimes.com/2013/04/28/us/time-for-texas-to-get-ready-for-the-shale-boom.html

Mark Graham for The Texas Tribune
The office of Greg Wortham, Sweetwater’s mayor and executive director of the Cline Shale Alliance, an economic development group

Expanded coverage of Texas is produced by The Texas Tribune, a nonprofit news organization. To join the conversation about this article, go to texastribune.org.
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Mark Graham for The Texas Tribune
A pump jack near wind turbines in the Cline Shale region. Fracking makes many little-tapped formations more accessible.
SWEETWATER undefined About a year ago, talk began circulating in this West Texas town about a huge oil-producing formation called the Cline Shale, east of the traditional drilling areas around Midland.

Then the oilmen and their rigs arrived. Now homes and hotels are sprouting, “help wanted” signs have multiplied, and a major drilling company has cleared land to build an office and equipment yard.

“It is coming, and it is big,” said Greg Wortham, the mayor of Sweetwater, who also serves as executive director of the Cline Shale Alliance, a new economic development group.

The Cline Shale, thousands of feet underground in a roughly 10-county swath, is just one of many little-tapped shale formations in Texas and across the nation, geologists say. That means the potential for oil and gas discoveries is theoretically huge, and the reason is technology. The rock-breaking process known as hydraulic fracturing, coupled with the ability to drill horizontally underground, has allowed drillers to retrieve oil and gas from previously inaccessible areas.

Many shales will be too expensive or too small to develop, especially if oil prices fall or environmental regulations tighten. But in Texas, which is already the top oil-producing state, bullishness about a new era is pervasive.

“We’re back into another phase of wildcatting, like the old-timers,” said Jamie Small, the president of Icon Petroleum, a Midland-based company that has worked in areas including the Cline Shale and another early-stage formation, the Tuscaloosa Marine Shale. Barry Smitherman, chairman of the Railroad Commission of Texas, the state’s oil and gas regulatory agency, has said that oil production in Texas could roughly double by 2020.

Much of Texas’ production in the near future is likely to come from well-known formations like the Eagle Ford Shale of South Texas and the shales of the Permian Basin of West Texas. Figures from the Railroad Commission show that oil production in the Eagle Ford Shale nearly tripled between 2011 and 2012.

But with oil prices relatively high, around $90 a barrel, the quest for new shales is under way, often in regions where drillers had found oil (as they had in the Cline Shale area) in the pre-fracking era. Nearly every month brings reports of promising explorations, from New Mexico to Alaska, though some reports may deserve to be taken with “a grain of salt,” Mr. Small of Icon cautioned. Within Texas, shales besides the Cline that are not household names include the Midway Shale, which is closer to the coast than the Eagle Ford in South Texas, and deeper layers beneath well-known formations in the Permian Basin. There is also shale under Austin, geologists say.

Large-scale extraction of oil and gas from shale is relatively new, which is why modern-day oilmen feel like explorers. Hydraulic fracturing undefined or fracking, the process of breaking up underground rock with a high-pressure mix of water, sand and chemicals undefined took off in the late 1990s in the Barnett Shale near Fort Worth. In recent years, aided by companies’ ability to drill thousands of feet horizontally under the earth, fracking has expanded into areas like the Eagle Ford and the Bakken Shale of North Dakota.

Shale, a fine-grained type of sedimentary rock, underlies much of the nation, according to Mr. Small, a geologist.

In Texas, shales are especially abundant. That is partly because hundreds of millions of years ago, sediment from much of what is now North America washed down toward modern-day Texas, according to Don Van Nieuwenhuise, director of professional geosciences programs at the University of Houston. Marine organisms, from the days when Texas was covered by a shallow sea, were buried and cooked by the earth’s heat and eventually became oil.

“We have one of the thickest sedimentary wedges in the world,” Dr. Van Nieuwenhuise said.

Sedimentary rock in the Gulf of Mexico can reach 50,000 feet in thickness, whereas it is about 3,000 feet thick near the Atlantic coastline, he said. That means that Texas could theoretically drill deeper than current onshore norms of about 10,000 feet to 15,000 feet.

The existence of a shale does not guarantee successful oil and gas production, geologists say. A formation may hold little oil or gas undefined or it may not be brittle enough for the fracking process to work effectively. Fracking is expensive; one well can easily cost $4.5 million, Dr. Van Nieuwenhuise said. So drilling is likely to slow if global oil prices drop, as they have slightly from a year ago when they topped $100 per barrel. Natural gas drilling has already been slowed by lower gas prices.

On the other hand, improving technology could boost production.

“The most optimistic of people believe that we’ve only seen the beginning of a burst of technological innovation, and if you look back from 2020 to fracking techniques in 2013, by 2020 you’ll think these are sort of feudal times,” said Edward Morse, global head of commodities research for Citigroup.

Mr. Morse noted that recent production forecasts had “fallen short of where production growth has been.” Still, he said, political or environmental concerns could slow the rush to drill, as could a fall in oil prices.

But with oil prices still high, some areas that were once an afterthought for oilmen feel like boomtowns.

There are “a lot more people coming in looking for hotels,” said Mikala Brownfield, manager of the Hampton Inn in San Angelo, a city in the Cline Shale region. She also gets business from oil workers who cannot find rooms in Midland, a two-hour drive away.

Devon Energy, an Oklahoma City-based drilling company known for pioneering work in the Barnett Shale, has opened offices in the past 18 months in San Angelo and Abilene, in addition to the planned Sweetwater location. It has nine rigs operating in the Cline and in the nearby Wolfcamp Shale. “We’ve had some encouraging results in the Cline, and we are hopeful and optimistic about our prospects for being successful in this play,” Chip Minty, a Devon spokesman, said.

Cities with fast-developing shales may find it hard to keep up with the boom.

If the Cline Shale gets going, “Where are the workers going to be? Where are you going to put them?” asked Diana Davids Hinton, a professor of history at the University of Texas of the Permian Basin and a co-author of “Oil in Texas” (2002). Already, she noted, Midland’s hotels and schools are full. (The University of Houston and the University of Texas of the Permian Basin are corporate sponsors of The Texas Tribune.) In Sweetwater, Mr. Wortham acknowledged that housing remained a concern. However, he said, the schools and roads were well prepared, partly because the area had already experienced a build-out of wind farms.

“There’s a lot more traffic than there used to be,” he said. “And we haven’t started yet.”

kgalbraith@texastribune.org

April 24, 2013

Environmental Leader Online

Currently, 18 states require some amount of fracturing chemicals disclosure. Of those, 11 direct or allow companies to report chemical use on FracFocus. The report, titled Legal Fractures in Chemical Disclosure Laws, found that the dependence on FracFocus as a regulatory compliance tool is either “misplaced or premature.”

Hydraulic fracturing, or fracking, involves injecting a large volume of fluid, which is usually water-based, into a well at high pressure, to fracture rock. The practice is used to extract oil and gas from large shale formations across the United States. Chemicals represent a small fraction of the fracturing fluid; however, given that millions of gallons of fracturing fluid may be injected into each well, the fluid may contain thousands of gallons of chemicals, Harvard says.

FracFocus was created two years ago this April in response to public concerns about the chemicals used in the fracking process. Industry worked with the Interstate Oil and Gas Compact Commission and the Groundwater Protection Council to create the voluntary registry. However, FracFocus is not a regulatory body, nor does it verify the information submitted by producers and suppliers, Harvard says.

Among the numerous areas of public disclosure deficiencies from relying on FracFocus are:

• A lack of transparency about when disclosures are filed, allowing for late disclosures without penalties;
• An “impenetrable interface” that prevents users from accessing more than one disclosure form at a time, thereby virtually eliminating any real search functionality;
• A lack of state-specific disclosure forms, leaving it to companies to determine how to account for individual state reporting requirements;
• No review of disclosures by FracFocus and rare pass-through of disclosure filings to states – a review found that 29 percent of the chemical identification numbers reported at Texas wells in July 2012 did not exist; and,
• An overly broad trade secret regime giving companies sole discretion to determine when to assert trade secrets.

These deficiencies are undermining some otherwise tough state disclosure requirements, according to Kate Konschnik, policy director of the Harvard Environmental Law Program. The report concludes that relying on FracFocus as a de facto regulatory practice is premature and does not serve the interests of the public.

However, according to a report on conservative media site Newsmax.com, Harvard professor and former aide to President Bill Clinton Jeffrey Frankel has claimed that fracking is the main reason for the 12 percent drop in US greenhouse gasses. Frankel has dismissed other possible explanations for the emissions decline such as lower economic activity and the Kyoto Protocol as, he says, the US’s GDP is still relatively high and the country never adopted Kyoto, Newsmax reports.

“That’s not the conservative way and it’s not the American way.”

Herman K. Trabish: April 18, 2013

As Greentech Media heads to Phoenix for its annual Solar Summit, April 22-24, it will find an Arizona solar industry in bipartisan tumult. Arizona Public Service (APS), the state’s dominant investor-owned utility, proposed doing away with the Arizona renewables standard (RES) distributed generation (DG) carve-out and net metering.

“APS was ordered to address how it would comply with the RES rules if direct cash incentives were no longer available and it no longer received Renewable Energy Credits (RECs) from customers,” an APS representative testified to the Arizona Corporation Commission (ACC), which regulates the state’s utilities. “APS proposes to track the energy produced...[but] there would no longer be a requirement that affected utilities acquire a particular amount of RECs.”

 “They view the recent election of an all-Republican ACC as an opportunity to kill the independent solar market in Arizona,” said Jason Rose, spokesperson for Tell Utilities Solar Won’t Be Killed (TUSK), a newly formed organization led by former Arizona Republican Congressman Barry Goldwater, Jr.

TUSK believes it would be “very un-Republican” to take energy choice away from Arizonans, Rose said.

"We have no greater resource than our sun,” Goldwater states on the TUSK website. “We can't let solar energy -- and all its advantages and benefits it provides us -- be pushed aside by monopolies wanting to limit energy choice. That's not the conservative way and it's not the American way."

TUSK’s statewide March 20-21 poll oversampled Republicans, yet still showed “exceptionally strong support for solar programs in Arizona and particularly net metering,” according to Rose.

The APS call for an end to net metering, Rose said, “is very bad politics and very bad policy.”

“The APS regulatory strategy has turned into a utility wish list,” said Republican and Rose Law Group Head of Renewable Energy Court Rich. “They’re asking to get rid of the DG carve-out and at the same time trying to destroy net metering. If they are successful, their customers will have no more choice and APS will be the only show in town.”

Because Arizona’s distributed generation is almost entirely solar, the effort to end the DG carve-out, according to Rich, is because the ACC recently cut utility solar incentives sharply.

Source: GTM Research 2012 U.S. Solar Market Report

The state’s mandate requires regulated utilities to have 15 percent renewables by 2025. The carve-out requires them to obtain 30 percent of that from DG. But, due to the incentive cuts, there would be no budget for APS to obtain the RECs needed for carve-out compliance.

APS, therefore, proposed essentially eliminating the carve-out. A better answer, Court said, “is changing how we define compliance. Compliance would not require them to purchase the RECs but to demonstrate compliance by counting systems hosted on its grid.” That would, he said, preserve the DG carve-out and preserve the REC owner’s property rights.

“The residential solar market in Arizona will very soon be incentive-free,” Court said. “This would not inhibit it.” But by eliminating the carve-out and net metering, APS would “destroy its customers’ ability to choose solar.”

APS, Court added, leads the state’s utilities. Tucson Electric Power (TEP) and Salt River Project (SRP), the other two major players, would likely follow.

“Net metering gives our companies market access,” said Ben Higgins, Legislative Director for solar installer Mainstream Energy/REC Solar, “and gives solar customers fair compensation for the electricity they produce.” 

“The DG carve-out ensures that ratepayers can participate in the adoption of solar,” said Technicians for Sustainability owner Kevin Koch, another solar installer. “Without it, ratepayers could be paying for utilities to install solar without the option to install it on their own homes.”

The APS rationale for eliminating the carve-out, Koch noted, is that it is no longer necessary. But that might not be true after the federal investment tax credit rolls back to 10 percent in 2017, or if third-party ownership rules change, or net metering changes or energy rates drop or solar prices rise.

APS is on track to hit 15 percent renewables eight years to ten years early, said policy advisor and former ACC policy analyst Nancy LaPlaca. Getting rid of the carve-out would relieve them of their only other compliance concern. And, she added, as a recent utility industry study from Edison Electric Institute (EEI) reported, “distributed solar could destroy the utility business model and leave them with a lot of stranded coal plants and a smaller group of ratepayers to pay for the rising costs of coal fuel.”

Instead of eliminating solar supports, LaPlaca said, Arizona should institute “aggregated and virtual net metering, PACE, community solar programs and other policy tools that would allow solar to flourish.”

“APS is essentially asking the ACC to pass a monopoly protection act,” Court said. “They say they are trying to protect ratepayers, but I am not aware of any industry in the history of the world where more competition led to higher prices. I don’t blame them for wanting to make more money. That doesn’t make them bad. That’s what businesses do. They try to eliminate their competition.”

Will rooftop solar spell doom for electrical utilities? Fears are running rampant, and San Antonio’s CPS Energy is acting to scale back net metering credits.

Earthtechling, Pete Danko: April 19, 2013

It’s the utilities vs. rooftop solar, and with PV becoming more accessible and installations soaring, the fight is heating up.

In San Antonio, the municipally owned CPS Energy last week said it will slash the value of the credit for solar produced from rooftop installations. Its claim is a central one made by the utilities: as more people produce their own power through rooftop solar -- and reduce their electricity bills -- utilities are left unable to meet their cost of maintaining the energy infrastructure. CPS Energy said it had two options: reduce the amount it credits solar households for rooftop-produced solar, or raise rates for everyone.

These power company fears about distributed solar aren’t new; investor-owned utilities in California have long fought to temper net metering and community solar, for instance. But the issue is top of mind now amid widespread discussion of a report [PDF] by the utility trade association Edison Electric Institute that said solar photovoltaics, along with battery storage, fuel cells, geothermal energy systems, wind, micro turbines, and electric vehicle (EV) enhanced storage, “could threaten the centralized utility model.”

CPS Energy seemed to waste little time in moving to keep the upper hand. Here’s how Cris Eugster, executive vice president and chief strategy and technology officer for the utility, explained the move in a statement:

Costs to install photovoltaic systems continue to fall, making them increasingly available for more customers. And with that growth, the costs of the utility infrastructure are borne by fewer customers -- those who don’t have solar systems. To ensure that solar customers continue to enjoy the benefits of any distributed energy they produce, and pay a fair share of the infrastructure that they rely on, we’re taking a different approach. This is really important in San Antonio, where one quarter of the community’s residents are at or below the poverty level, and monthly energy bills absorb a larger portion of their monthly budgets.

But not everyone is buying that solar is putting such a squeeze on CPS Energy. Lanny Sinkin, executive director of the advocacy group Solar San Antonio, told Texas Public Radio that the utility’s customers don’t have anywhere near enough solar to present a cost-structure issue.

“In San Antonio, we have about 8 megawatts of solar distributed in a system that’s more than 7,000 megawatts,” Sinkin said.

As it stands today, CPS Energy credits customers at the retail rate for any rooftop solar production. That’s now amounts to 9.9 cents per kilowatt-hour. The utility proposes replacing that with a “SunCredit” of 5.6 cents per kilowatt-hour beginning in November. It says this rate takes into account the cost of poles, wires, substations and the like -- things that all customers, even those who produce more solar than their total power usage, rely upon.

Solar advocates have argued that this sort of raw accounting ignores the benefits that distributed solar brings: reduced pollution and expenses for conventional power; less need for new investment in transmission and distribution; reduced transmission losses; and reduced costs of meeting renewable energy standards.

The California pro-solar group Vote Solar Initiative earlier this year released a report that called utility cost claims for net metering inflated, and said that once the 5 percent net-metering cap is met in the state, non-solar ratepayers will benefit to the tune of a combined $92.2 million per year.

UPDATE: Readers should be sure to check out the comment from CPS Energy rep Lisa Lewis. Her point that the utility offers strong financial incentives for installation of solar, apart from the energy production credit, strikes me as particularly important.

***

Editor's note: This article is reposted in its original form from EarthTechling. Author credit goes to Pete Danko.