Thoughts on Solar

In our first two posts this week recapping the state of solar feed-in tariffs in the Run on Sun service area, we focused on what is happening with the biggest FiT around, that run by LADWP.  But that isn’t, nominally at least, the only game in town so this post will summarize the progress, or lack of same, at the other FiT programs around: Glendale, Anaheim and Riverside.

Glendale

We have written at great length about the problems with the FiT program that Glendale Water & Power designed to meet their state mandate.  We noted that the prices being offerred—which were actually even 10% lower than what was presented to the Glendale City Council when they approved the program—were way too low to pencil out for a project, and that other uncertainties made it highly unlikely that anyone would participate.  In other words, as we told the Glendale City Council, they were approving a program that was designed to fail.

Nine months into the experiment, where do things stand today?  Let’s take a quick look at the FiT queue as of today:

 Ouch. 

All that empty space is just hard on the eyes.

In nine months, GWP has not received a single application for their FiT program—and contrary to how GWP officials refer to their defunct commercial solar incentive program as a “victim of its own success,” this program is a victim of GWP’s design.

Given the failure to attract a single project application, you might think that GWP would take steps to address their failure by increasing the offer price for energy, but you would be wrong.  This table summarizes the progression on GWP’s FiT offer price for energy:

The “City Council” price is what GWP suggested to the City Council the offer price might be when the program went live and that is the price the Council had before it when they approved the program.  The “Program Start” price is what was actually offered to potential project developers when the program went live last July. 

The “Q214″ price is what is being offered today—a reduction of 5.5% for Peak and 4.8% for Off-Peak deliveries.  That’s right, in response to offering a price that was already so low that no one was willing to put forward an application, GWP has responded by cutting its offer price by 5%.  Genius.

GWP will no doubt say that they have no choice, that the formula approved by the City Council for setting the offer price mandates this result, but that’s merely self-referential nonsense.  GWP designed the formula and the City Council confessed that they had no way to assess the technical merit of what was before them.  The formula is supposed to be based, in part, on avoided costs—but guess what?  So is the offer price for the LADWP FiT and yet it is twice what GWP is offering.  Are we to believe, therefore, that GWP’s costs are half of those incurred by LADWP?  If so, we suspect the customers of GWP would be surprised then that there rates are as high as they are.

It is high time that the Glendale City Council call GWP to task and insist that they re-create this FiT program so as to achieve what the state law intended—the actual installation of solar power in the City of Glendale.

Anaheim

The representative from Anaheim Water & Power had told us last year that their program to date, despite being started in 2010, had yet to attract a single application.  Checking in on Anaheim’s FiT website confirms that unbroken string of failure continues to this day with no projects in the queue.

Anaheim’s offer price tells us why: it ranges from 3.883¢/kWh for Off-Peak to 6.472¢/kWh for Mid-Peak to a summer On-Peak price of 9.708¢/kWh.

Riverside

Last year Riverside’s representative told us that they knew that their price was so low no one would bite and that was fine because they didn’t want solar installed in Riverside anyway.  Today, Riverside’s “we don’t want anybody to participate” price for energy is 6.2¢/kWh—exactly the same as GWP’s off-peak price.  Looks like GWP is playing follow the (non)leader.

Pasadena?

Which brings us to our friends at Pasadena Water & Power.  At a meeting yesterday we learned that PWP is considering a Feed-in Tariff program of its own.  Now we are fans of PWP, indeed, we think they are the easiest and best utility around to work with (and for, for that matter).  So that begs the question: What sort of FiT will PWP create?  They could base their program on what has been done at LADWP (with necessary tweaks to make small projects viable) and thereby insure a successful program that reduces pollution, creates local jobs and helps to green PWP’s energy mix.  Or they could follow the misguided path of GWP and its ilk, creating a program in name only, that guarantees that not a single kWh of clean energy will ever be generated.

Needless to say, we will follow FiT development at PWP closely.  Watch this space.

Yesterday we provided a recap of the results from the third tranche of LADWP’s Feed-in Tariff (FiT).  Today we are going to look at the status of the program overall, based on the newly instituted FiT Dashboard found on DWP’s FiT website.

Credit where its Due

We are often critical of issues with utilities, whether its undue roadblocks to installing solar or outright hostility to the entire concept of net metering.  So it is equally important to give credit where it is due, and the introduction of the solar “Dashboards” that are now featured at the DWP website is a great step forward in transparency and one that deserves to be widely imitated by DWP’s peers.  Here is how DWP explains the purpose of their FiT Dashboard:

LADWP is implementing the largest FiT program of any municipal utility in the nation. As it goes through growing pains, we continually work to improve the experience of customers and businesses who participate in it. The goal is to achieve the target level of solar energy, catalyze the solar industry and create jobs, and streamline the process to increase efficiency. This Dashboard outlines the issues, actions taken, and plans for improvement. The graphs show the current and targeted FiT processing timelines, schedule, and status of projects from each allocation.

The data discussed below is from the Dashboard update as of April 7, 2014.

FiT Processing Durations

While the complete flow chart for LA’s FiT program is more than a shade Byzantine, the Dashboard highlights processing times associated with three key bottlenecks in that flow: the initial Technical Screening that takes place when a project application is first submitted, the interconnection study which determines the cost for the proposed project to tie into DWP’s grid, and contract execution for the PPA between the project developer and DWP.  For each of these milestones, DWP has a goal of completing the work in four weeks.  In each case, DWP is missing those targets by a lot.

As of this writing, DWP is taking, on average, 6 weeks to complete the initial technical screening, 12 weeks (3x the goal) to complete the interconnection study and 14 weeks (3.5x the goal) to execute the contract!  Unfortunately, the Dashboard does not reveal how much of that delay reflects internal DWP processing times versus delays caused by the developer—breaking these delays down to reveal how that works out would be an important modification to the Dashboard.

While we can understand how incomplete applications and general, technical complexity could add delays to the first two milestones, we are baffled by the 14 weeks of delay in executing the contracts.  These are standard form contracts which, at least according to the program guidelines, are not subject to negotiation.  What could possibly cause a three-and-a-half month delay in getting those contracts signed?  Alas, the Dashboard does not reveal an answer to that question.

FiT Active Project Status

Which brings us to the status of all project applications in the queue.  Here’s DWP’s chart (click for larger):

The chart shows all 22 applications from the third tranche in the initial technical review as would be expected.  Shockingly, there are still 13 projects from the first tranche, over a year ago, that are still hung-up in that initial review!

Missing from this chart is the number of projects that are designated as cancelled.  By our count, there are 47 projects that made it through the lottery but have been cancelled for whatever reason.  (The most likely reason would be due to learning that the cost to interconnect to DWP’s grid—the major wild card in the whole process—turned out to be too expensive.  However, according to the data, only 21 of those 47 projects ever had the interconnection study completed, which means the majority of the cancellations had to be due to other, unreported, reasons.)

Seven projects from the first tranche are still waiting for the interconnection study to complete along with 37 from the second tranche.  Thirty-four projects, 17 each from the first two tranches, are undergoing the mysterious contract review process.  Only 9 projects have managed to get contracts executed and just two, both from the first tranche, have been commissioned.  (The blue bars represent projects from the demonstration phase.)

That’s a lot of solar in the pipeline—hopefully DWP can get the cancellation rate down and the completion rate up in the coming months.

Issues and Actions

Again to its credit, the Dashboard acknowledges that the program’s overall status is: “Needs Improvement” and steps are underway to improve the process.  Perhaps the most significant development is that DWP has assigned seven additional engineers to help work through this backlog.  But the Dashboard makes clear that to get to target goals, DWP needs to climb a very steep hill: “To achieve target turn-around schedule, staff must complete 10 interconnection studies per week over the next 7 weeks and 10 contracts per week over the next 10 weeks.”

Bottom line - DWP is working on a big and complex program and the performance to date has been less than desired, but the institutional attitude seems better than expected. Hopefully DWP will be able to deliver on its targets in the next 10 weeks. 

Of course, DWP looks positively stellar compared to the FiT performance of its neighbors, a topic we will return to tomorrow.

There are multiple Feed-in Tariff (FiT) programs in the Run on Sun service area, although only one is actually doing anything. We decided it was time to check back in on these programs and to see if any of them are living up to their mandate to actually get solar installed in the L.A. Basin.

As of this writing, there are FiT programs hosted by four cities: Anaheim, Glendale, Los Angeles and Riverside.  In this post we will check-in with Los Angeles and revisit the status of the other three later in the week.

LADWP’s Feed-in Tariff Program

Los Angeles brags that it has the largest FiT program in the country and that assertion is true, as far as it goes.  We have written extensively about the LA FiT in the past, documenting how it came about and how it has recently survived challenges from the Rate Payer Advocate who insisted upon comparing energy costs from utility-scale projects with the “in-city” projects called for by the legislation that mandated the program.

LA’s program has a 100 MW capacity goal and it divides that total into five, 20 MW allocations, or tranches, each to be offered roughly six months apart.  The first tranche was to be offered at a base price for energy (BPE) of 17¢/kWh, with each subsequent tranche offered for a penny less than its predecessor. So far, three tranches have been made available, the latest just last month.  As we have reported on both of the earlier two tranches (first tranche here and second tranche here), we will focus this post on the third tranche and overall program status.

Third Tranche Results

The third tranche, after some delays due to City Council concerns, opened on March 17.  The LADWP FiT website provides a PDF file of their spreadsheet showing the results of the tranche lottery, but unfortunately the underlying spreadsheet is not provided.  This means that the PDF has to be converted back to a spreadsheet before any real work can commence, an unnecessary waste of effort. 

Hey, LADWP listen up: if you are going to publish data, publish the spreadsheet, not just a PDF. (Thanks, I feel better now.)

Does Timing Matter?

Up until now the sense was that in order to have a shot you needed to submit your application as early in the five-day window as possible but these results belie that notion.  While the window went up on March 17, none of the 45 applications submitted came in on the first day!  The earliest application came in on the 18th at 11:53 (and, despite landing lottery number 21, missed the allocation cut-off) whereas the last application came in on the 21st at 3:46.  Interestingly, the last twelve applications received all got that same time stamp, which means that despite their best efforts to the contrary, one quarter of all applications received were received at the last possible minute—and four of those twelve made the cut.  More on this in a minute.

Does Size Matter?

The 20 MW of capacity in the tranche are not just one big pool.  Rather, 4 MW are set aside for “small” projects (i.e., capacity between 30 and 150 kW) and the remaining 16 MW to “large” projects (150 kW to 3 MW).  So does size matter in terms of the likelihood of success?  It certainly does—all four small projects made the cut, whereas only 19 out of 41 large projects did.  Of the small category projects, two were right up against the size limit (145 and 149 kW, respectively), while the other two were much smaller: 79 and 37 kW.  Frankly, in light of the relatively low payment in this tranche—a situation that will only get worse as the BPE declines in subsequent tranches—it will become harder and harder for small projects to pencil out.  Given how badly the small category underperformed in this tranche—barely reaching 10% of the 4 MW capacity set aside—LADWP should re-think its approach here.  If it is serious about maintaining a small projects category, it needs to increase the BPE for such projects.  Otherwise it needs to revise its rules so that the excess allocation in the small category can be used by large projects that otherwise would not make the cut.

Players

The large category is particularly interesting from the sense of who is playing.  The 41 projects in the large category came from only 19 different sources, and the biggest player of all is none other than the City of Los Angeles itself!  Here’s the list:

Twelve of the nineteen large project applicants submitted only one project, three submitted two projects, one submitted three, two submitted four—and then there’s LA’s Harbor Department which submitted 12 with an average size over 1 MW each!

So how did these players fare in terms of making the cut? Well, the City only got four of its twelve projects in under the wire so one might think that their success was no more likely than anyone else.  But here’s an interesting thing—remember those twelve applications that all received the same timestamp of 3:46 p.m.on the last day to apply?  You guessed it, all twelve of them came from the City of LA’s Harbor Department!  How curious.

The other successful players were Pasha Stevedoring (2 out of 3), OM Solar LLC (2 for 2), PLH LLC (2 of 4) and SunRay Power LLC (2 of 2).

Coming to a Zip Near You?

Finally, we wanted to see where all of this solar is going and, given the success of the LA Harbor Department, not surprisingly the big winner is San Pedro, home to the Port of LA.  Five projects will be located in San Pedro’s 90731 zip code for a total capacity of 4.6 MW, and one more nearby in Wilmington.  The Port is about to become something of a solar center in Los Angeles—a welcome departure from its past reputation as a toxic hot spot.  Here’s the map:

 More to Come

There’s more to say about the state of LA’s FiT, so we will save that for tomorrow, including a look at their new dashboard that seeks to provide greater transparency into how the overall program is doing.

Having aimed for Valentine’s Day and missed, those Cupid’s helpers over at LADWP have transmogrified themselves into lucky Leprechauns as they reset their sights onto everyone’s favorite feast day, Saint Patrick’s Day (aka, March 17 for the uninitiated).

Somewhat less tongue-in-cheek, DWP has announced that the third 20 MW tranche of solar project allocations under LA’s Feed-in Tariff (FiT) will open for applications on Monday, March 17.  Under their guidelines, all applications received by Friday, March 21 will be assigned a sequence number and then a lottery will be held to allocate the 20 MW among the applicants.  LADWP has some updated materials on their FiT website (access it here), but no key to what changes have been made (the proposed changes were very modest) and a promised Frequently Asked Questions section is still to come.

This third tranche has been delayed for weeks while DWP staff prepared their changes. 

Given the somewhat dismal rate of project advancement, one would hope that the changes would help streamline the process, but that doesn’t really seem to be the case.

During the February 18 Board meeting to discuss changes to the program, Staff’s suggestion on how to move things along was to impose a 10-business day deadline to cure deficiencies in FiT application paperwork.  Of course, that is the same amount of time that LADWP gives contractors to cure deficiencies in residential solar rebate applications—even though LADWP has taken five times as long to identify those “deficiencies."  Given the far greater complexity with the FiT paperwork requirements, we can only hope that LADWP’s review of that paperwork is more insightful and the subsequent interactions more collaborative.

Happy St. Paddy’s Day!

UPDATE - 2/10 - LADWP has now revealed the reasoning behind their delay in moving forward on the program “tweaks":

The FiT Set Pricing Program was deferred from the February 4th Board of Water and Power Commissioners (Board) meeting so the Rate Payer Advocate may review the proposed changes. The program modifications and enhancements are still expected to go before the Board for review and approval at the February 18th Board meeting.

Given that no change—that is, reduction—to the set-pricing offered under the FiT was made in the proposed changes, it is pretty clear how the RPA will come out in all this.  It looks like we may be seeing a threat to the FiT’s viability come the meeting on the 18th.  Interested parties should plan to attend.

On Monday we reported on an email that we had received announcing minor changes to LADWP’s Feed-in Tariff program and the anticipated launch of the third tranche of 20 MW on February 14. Now we have learned that the Resolution adopting these changes and authorizing the third tranche, which was to be considered at yesterday’s Board of Commissioners meeting, was pulled from the agenda and “deferred until further notice!”

Bottom line: the third tranche will not be offered as of February 14.  Not sure what is going on with this, but here are our thoughts.

In reading the resolution that was to be adopted by the Board, we noted that there had been a presentation made regarding the status of the FiT by staff on December 3rd, but that the presentation was not online.  (Thanks to the kind assistance of the staff, we now have the December 3rd presentation here.)  As we suspected it must, the presentation reflected the slow progress in moving projects past the adoption of standardized contracts—a prerequisite for construction to begin. 

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As this chart from the presentation shows, the only projects “in service” actually date from the demonstration program, not the actual FiT.  In fact, only a bare handful of projects are even under construction, with the bulk of the first tranche still pending execution of the standardized contract and some still in the interconnection study phase.  Keep in mind the standardized contracts (SOPPA on the chart) are just that, standardized take-it-or-leave-it contracts, the form of which was available to participants before they ever submitted their initial applications!  So what could be causing this delay?  Surely the Board had some pointed questions for staff on this point

We decided to watch the video from that meeting to see if we could gain any insights into how the Board viewed this issue and to see if we could discern why consideration of this resolution was pulled without notice or explanation.

The video—you can watch it here jumping to agenda item 27A—really doesn’t go into much in the way of relevant discussion. (There is a long detour into problems that a SolarCity customer was having with a bill—post solar—that was higher than ever before, and the clear confusion on the part of Board member Barad regarding how net metering works. But that is a topic for another day.) 

There was a question as to adequate staffing, but that was not cited as a reason for the delay.

Instead, staff responds by saying that some of the developers (actually, it would appear to be nearly all of the developers) had problems filling out the standard contract. However, the proposed tweaks did not include streamlining the contract so maybe that is why there is a concern about the proposed resolution?

We also hear in the video that the CleanLA/UCLA Luskin Center coalition, which was one of the driving agents behind the FiT, was supposed to be producing a report on the FiT so far—perhaps that report raised issues that caused the postponement?  Alas, the report does not appear at the LADWP website, nor can we find it on the CleanLA website.

However, the last person to speak about the FiT is longtime FiT opponent, the Ratepayer Advocate, who once again complained about the cost of the FiT. Indeed he asked that the program switch from a set-price program to a competitive bid program.  His complaints are no better grounded now than they were a year ago, but perhaps he has caught the ear of one of the new Board members who pulled the resolution because a change in pricing was not proposed?

For now, all we can do is speculate.  But one thing is sadly certain—LADWP is playing Scrooge this Valentine’s Day as the third tranche remains on hold.