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It's Official: Glendale Launches its FiT and its Worse than We Thought!

07/26/13

  09:43:00 am, by Jim Jenal - Founder & CEO   , 424 words  
Categories: GWP, Feed-in Tariff

It's Official: Glendale Launches its FiT and its Worse than We Thought!

We wrote last month about how Glendale was late getting to its required Feed-in Tariff program and that the design that they were advancing was seriously flawed. Well the window on the FiT has finally opened and guess what - it is worse than we thought!

When we first looked at the details of GWP’s FiT we were concerned that there had been no public input into the program’s design.  Moreover, the amounts that were going to be offered - based on the staff’s report to the City Council - revealed energy prices so low that no intelligent developer would go anywhere near the program.

The published proposed price for FiT energy - 9.292¢/kWh for peak time delivery and 7.251¢/kWh for off-peak - were well below what a program needed to be subscribed.  In fact, those prices were very close to what was being offered in Anaheim and Riverside - two program which had not seen a single FiT application in two years!

Well as bad as we thought all of that to be, we just learned that the reality is far worse.  GWP just kicked off their FiT website (which curiously has the title: Revenue for Demand Response) which includes a link to the current Offer Price.  As of July 1 (though really not available until today) here is GWP’s actual offer price for FiT energy:

GWP FiT offer price 3q13These new prices are 15% lower for peak deliveries and 10% lower for off-peak from the prices described to the City Council just last month! (Interestingly, their fees have not reflected a similar price reduction.)  We previously calculated the FiT payment in Year 1 for a 100 kW project to be $13,599 based on the allocation of energy by peak versus off-peak times.  Under the new rate structure that payment in Year 1 declines to just $11,688, a 14% hit.

The website is typically devoid of any data explaining how the new price was calculated, but does it really stand to reason that GWP’s “avoided costs” for energy declined by 15% in the past month for peak time deliveries?  While the materials submitted to the City Council contained a sample calculation showing how staff reached the originally proposed values, no such calculation is visible on the GWP website.  Were the numbers used last month simply fictitious? Or has there been some amazing change in fortunes for GWP’s ability to purchase energy - mind you this at a time when energy prices throughout Southern California are spiking up 59% due to the loss of the San Onofre Nuclear Generating Station.  Amazing.

Looks like I won’t have to be making good on my bet come September.  Pity.

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Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

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