Thoughts on Solar

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: The postponement is “until further notice.” We have a more detailed report on the delay of the third tranche of LA’s FiT here.

UPDATE: LADWP has informed us that the meeting scheduled for tomorrow has been postponed.  As soon as we learn more, we will update this post.

LADWP has announced that the third 20 MW tranche of its Feed-in Tariff program will launch on Friday, February 14, pending Commission approval.

Outgoing GM Ron Nichols signed off on the Board Packet, and the tweaks to the program suggested therein are set to be reviewed and approved on Tuesday, February 4 at 11:00 a.m.—that is, tomorrow morning—according to the email DWP sent out Friday afternoon.  (Can you say, “Friday news dump,” anyone?)

Apparently DWP made an update presentation to the Board on December 3.  We say apparently since it is referenced in the new materials, but we cannot find a copy of the report anywhere online.  We wonder, for example, if the Board was informed about the surprisingly low number of contracts that have been executed under the FiT so far?  As we reported back in early January (going just on published data and without access to the report to the Board), out of 109 projects that originally “won” in the First Tranche lottery, only 3—a 2.7% success rate—have signed contracts.

Alas, this was not “tweaked”

Hard to say whether any of the “tweaks” being proposed will do much to address that problem. 

We observe with some dismay DWP’s observation that “numerous developers have been confused or inexperienced with designing solar for the California market, ” since that could have been avoided (or at least reduced) if the program had given preference to local developers.  After all, one of the stated purposes of the FiT was to develop local jobs.

Seems like a missed opportunity and one that has delayed successful project implementation while the out-of-towners get educated on the mysteries and joys of doing solar in the City of the Angels.

Other tweaks include:

• A 10-business day deadline has been added for developers to cure application deficiencies.  Nothing said about how long City staff will have to cure theirs.
• LADWP must approve any lease language to “ensure consistency with the LA City Charter.”
• The Standard Contract was modified to “clarify the assignment provision.” Useful, no doubt, but streamlining the entire 51-page contract would be even better.
• A “re-application” form has been created to simplify the process for unsuccessful lottery participants to re-enter the next tranche.

Beyond those changes, “staff will post updated sample forms and contracts, answers to frequently asked questions, and checklists on the FiT Website to provide guidance and transparency."  A noble goal, to be sure, but it would be a start if they could post their own Board presentations in a consistent manner.

Assuming the Board approves these modifications, the window will open on the Third Tranche on February 14, with a base price for energy of 15¢/kWh.  The window will stay open for five business days and all completed applications will enter a lottery to see who will be part of the 20 MW allocation.  Happy Valentine’s Day, everyone - may your solar dreams come true.

The Feed-in Tariff (FiT) program for LADWP has been up and running for nearly a year with the first two tranches in the books. Which raises the question: how have those proposals that were accepted, performed? Here’s our first take…

LADWP quietly posted some update statistics about its program the week before Christmas and we stumbled upon it while looking for information about the timing for the Third Trache (presumably set for later this month, although the DWP website simply says that launch info is “coming soon").

The FiT data comes in the form of an Excel spreadsheet, without supporting documentation, which leaves it open to interpretation.

Collectively, the data reports on 256 total projects, 136 from the first tranche and 120 from the second.  Interestingly, the data only records three different status values for these projects: Cancelled, In-Progress and Waiting - there is no category in the data for “Completed".

From the first tranche, out of that total of 136 projects, 20 have been cancelled (14.7%), 45 are in-progress (33%) and 71 - over 52% - are listed as “waiting", though the data does not identify upon whom or what the projects have stalled.  The data is somewhat more encouraging for the second tranche with only 1 project cancelled so far (0.8%), 64 are in-progress (53.3%) and 55 are waiting (45.8%).  This trend suggests that as projects age they are more likely to either be cancelled or end up waiting on something.

The data tracks four milestone dates post lottery selection: Technical Screening Completed, Interconnection Study Completed, Customer Executed Contracts Received, and SOPPA Execution Date.  Curiously, for the projects with a status of “waiting", not a single one of those dates is indicated.  As it is hard to fathom how 110 out of 256 projects haven’t even passed the technical screening stage, we conclude that the “waiting” status is unreliable and needs to be corrected by DWP.

Turning to the cancelled projects, all but 3 of them reflect passing of the technical screening, and 15 of the 21 have completed interconnection studies.  Since it is at that stage that you would expect a project to be dropped if the interconnection cost has turned out to be prohibitively expensive, it is not surprising that only seven got to the point of submitting their contracts.  However, DWP had not executed any of those contracts according to the data.  Which means that seven projects got so far as to submit binding contracts before dropping out.

Which leaves the category of “in-progress” projects.  Out of a total of 109 so designated projects, only three have executed contracts from DWP, and all three of those were executed on September 13, 2013.  This makes for a pretty dramatic winnowing process:

109 start -> 89 pass screening ->31 complete interconnection study -> 20 submit contracts -> 3 have those contracts executed, nearly a year after the process began (all  of those with executed contracts came from last February’s first tranche).

Unfortunately, the data does not reveal why we are looking at such a dismal success rate one year on.  Perhaps things would look different if the “waiting” segment were more revealing, but it is not.

Here’s hoping that 2014 will provide both greater success in getting projects over the finish line, as well as greater clarity in the process.