By Lissa King Magel, NTREG
More than 4.1 million Texans, about 15 percent of the state’s population, receive their power from a municipally owned utility (MOU). The 72 MOUs in Texas each own and operate their own distribution infrastructure and, in some cases, transmission lines and power plants. Texas MOU sizes vary greatly. San Antonio’s CPS Energy is the largest MOU in Texas, serving a population of more than 1.7 million, but many Texas MOUs are small, with some serving communities of fewer than 5,000 residents.
Because they are locally owned and controlled, Texas MOUs can innovate and adopt policies reflecting community priorities, unlike investor-owned utilities that are accountable to distant stockholders. Thus it’s not surprising that it was MOUs that took the lead in the deployment of solar in Texas, as recently highlighted in the PV Magazine article, “Boom Time in Texas.”
While it’s the larger cities like San Antonio, Austin and, more recently, smaller towns like Georgetown and Garland that make the news with their solar programs, more and more city-owned utilities are quietly adopting new policies in response to the plummeting cost of solar power and their citizens’ desire to generate their own clean electricity while still being connected to the grid.
The Texas Solar Energy Society recently conducted an online study of Texas MOUs to better understand how they are addressing solar power and distributed generation (DG). Of the approximately twenty with explicit online policies, ordinances, rates, or forms referencing solar energy or DG, TXSES surveyed six to learn more about their policies and approaches. These six represent a cross-section of the state in terms of location and size, as shown in Table 1.
Highlights
The number of residential and commercial solar installations reported by each MOU is shown in Table 2. Even in San Antonio, which ranks seventh in the nation for total installed solar PV capacity in Frontier Group’s Shining Cities 2016 report, rooftop solar customers are a tiny fraction of the total customer base.
Our survey revealed Texas MOUs are preparing for the dramatic changes happening in the power sector, including potential federal environmental regulations and the declining cost of solar and wind, and they appreciate the increased generation diversity offered by renewables. In fact, all six utilities surveyed have executed one or more Power Purchase Agreements (PPAs) for wind and/or solar power.
The survey uncovered big differences in the level of development of solar programs and in the details of how the six MOUs implement net metering, insurance requirements, and application fees. However, none of the cities currently have an ordinance requiring screening or dictating the location of a PV system for aesthetic purposes.
Finally, we found that Texas MOUs are increasingly interested in community solar, an arrangement where residents can buy, lease, or subscribe to a set number of PV panels in a shared solar array and offset their electric use as if the panels were located on their own roofs.
Such programs expand solar access to citizens who rent their homes, can’t afford the upfront costs, or whose roofs are unsuitable due to shading or orientation. Many utilities find community solar attractive because it allows them to retain control of the array’s design and location as well as program cost structure, thus avoiding any perceived “cost shift” to non-solar customers.
Following are the details of each of the six MOUs we surveyed. Although the principal focus of this article is distribution-side solar energy, we will also note when each MOU has PPAs for utility-scale solar facilities, and for those readers who are curious about wind energy, we’ll even note wind PPAs.
Brownsville Public Utility Board (BPUB)
Last June the City of Brownsville became a founding participant in SolSmart, a national technical assistance program for local governments to encourage solar development. Brownsville currently has no residential or commercial solar installations, but is planning to use solar in low- to moderate-income family dwellings to help lower utility costs.
BPUB offers net metering with excess generation credited at avoided cost and has no application fee or liability insurance requirement. No incentives for solar are offered. There is currently minimal information on solar or DG available online, but BPUB is working to streamline its solar permitting process and develop a “Road Map to Solar” for its citizens.
BPUB has a 25-yr PPA with the Sendero Wind Farm for 78 MW, but does not yet have a solar PPA. Brownsville is not currently considering a community solar program.
Denton Municipal Electric (DME)
Denton offers net metering with excess generation credited based on a Renewable Cost Adjustment (currently $0.0431/kWh). There is no application fee, but homeowner’s liability insurance is required (minimum $100,000).
DME has offered rebates for solar systems for several years. DME’s 2016 rebate is out of funds, but the 2017 rebate will be $0.75/Wac up to $30,000 or $1.50/Wac up to $30,000 for PV systems with battery storage. Detailed information on DME’s energy efficiency and solar incentives is available online.
DME’s PPA with Wolf Ridge Wind covers 40 percent of its needs, and 1 percent comes from a landfill-to-gas energy project at the City of Denton landfill. DME has a contract with Bluebell Solar for an additional 5 percent starting in 2019.
Denton is considering building a community solar installation.
Georgetown Utility Systems (GUS)
Georgetown offers net metering with excess generation credited at the full retail rate for residential customers and avoided fuel cost for commercial customers. GUS charges a $35 application fee, but does not require liability insurance. GUS currently does not offer solar incentives. Website information on going solar and a detailed process guide for interconnection is available.
Georgetown has PPAs for 20.24 MW from Southwest Mesa Wind and 144 MW from Spinning Spur 3 Wind, both of which are operating.
Finally, a PPA with Buckthorn Solar for 150 MW, expected to be consummated in early 2017, will bring Georgetown to the point of obtaining the equivalent of 100 percent of its total electricity needs from renewable energy. The city will be the first in the state to do so.
GUS is not currently considering building community solar.
Lubbock Power & Light (LP&L)
Lubbock offers a form of net metering to residential customers in which customer generated electricity offsets electricity consumed from LP&L, but customers are not paid for excess generation. The energy charge for net metering customers is lower than for standard residential customers, but the customer charge (“service availability charge”) is higher ($27.40 compared to $7.27).
LP&L does not charge an application fee and does not require liability insurance. Lubbock offers no solar incentives. Information on LP&L’s interconnection process is online.
While LP&L has no solar PPAs, beginning in 2019, it will purchase 100 MW from Elk City II Wind. LP&L is not currently considering building community solar.
CPS Energy (CPS)
CPS Energy offers net metering with excess generation credited at the avoided energy cost. CPS charges a $100 rebate application fee and a $300 connection fee, but PV systems smaller than 50 kW are exempt from liability insurance requirements.
CPS has $30 million in solar incentive “STEP” funds, divided into three $10 million tranches of $1.20, $1.00, and $0.80 per watt, with a maximum system price of $4.00/W to qualify. Also, CPS is piloting a free SolarHost program that pays customers a small host fee for allowing solar systems on their roofs. Systems are connected on the line side of the meter and CPS takes 100 percent of the power. CPS has extensive online information on energy efficiency and solar incentives.
CPS contracted with Colorado-based Clean Energy Collective to develop and manage a 1.2 MW “Roofless” community solar array in Adkins, TX. Subscribers buy panels from Clean Energy Collective, with CPS offering a $1.09/W rebate on the purchase. Very popular with CPS customers, the program is 100 percent subscribed.
CPS has PPAs for 10 utility-scale solar facilities with 230 MW operating as of April 2016, and projected to increase to 500 MW by the end of 2016. CPS also has 1,060 MW of wind PPAs in effect.
Kerrville Public Utility Board (KPUB)
Kerrville offers net metering with excess generation credited at the “Power Supply” cost (similar to avoided cost). KPUB does not charge an application fee, but does require liability insurance for residential customers with systems larger than 10 kW and commercial customers with systems larger than 50 kW ($500,000 per occurrence and $1,000,000 general aggregate).
KPUB offers rebates for several energy efficiency programs, but not for solar systems. KPUB offers information on its interconnection policies on its website.
KPUB is reportedly actively assessing ways of adding more solar panels to the grid (Seeing Green) and recently approved a $15,000 contract with a third party to issue and evaluate RFPs for distribution connections for solar generation.
According to Mike Wittler, KPUB CEO and general manager, “What we’re wanting to have is more community solar and potential partnerships with customers to do locally sited systems.” One driver for increasing DG within the city is that transmission costs make up to 20 percent of KPUB’s wholesale power costs, so producing power local solar power could reduce this expense.
While KPUB does not currently have a solar PPA, its PPA for 20 MW from Salt Fork Wind is expected to be operational in late 2016.
Lissa King Magel is the Chair of TXSES’ North Texas chapter (NTREG) and serves as a TXSES board member. She holds degrees in Materials Science and spent 20 years doing R&D in the semiconductor industry. Lissa champions energy efficiency and renewable energy through her efforts as an organizer of the DFW Solar Tour and a North Texas Chapter leader.
The author appreciates the assistance of TXSES director Paul Gonin and member Katherine Searcy with the MOU survey and the development of this article.