A pilot program aimed at commercial customers wanting to invest in intermediate-sized solar arrays was approved Aug. 15 by the Seattle City Council’s Housing, Health, Energy, and Workers’ Rights Committee.
Seattle City Light calls the solar arrays at issue “large,” with ratings between 100 kW and 2 MW. They’re too small to be considered utility-scale systems with negotiated wholesale power contracts, and too large to fall under the 100 kW cap of the state’s net-metering laws.
This presents a “policy gap,” according to proposed Council Bill 119516, which would enact the program.
In a presentation to the committee, Brendan O’Donnell, SCL manager of strategy, planning and analytics, said the two-year pilot program offers a standardized set of terms to replace the current “one-off” contracts.
The program provides a “clear decision framework” for investing in large systems, and streamlines the business process for City Light while also minimizing cost-shifting to customers that don’t participate in the program.
Under its terms, commercial customers will be paid 7.7 cents/kWh for energy consumed on site, and an “export rate” of 3.5 cents/kWh for energy sent to SCL’s system to account for the power and grid benefits it provides.
The export rate will be updated every other year and is based in part on monthly Mid-C-market forward prices weighted by an expected monthly shape for a typical solar photovoltaic system in Seattle.
In contrast, under net metering, excess energy from small systems is banked over the course of a year, and then credited at retail rates in place at the time of generation, which is 8.89 cents/kWh or 13.06 cents/kWh for residential customers, which make up the bulk of rooftop systems in City Light’s system. Currently, O’Donnell said, there around 3,000 such systems with a total of capacity of 20 MW.
The committee approved an amended version of CB 119516 based on stakeholder comments.
The changes include increasing the cap on eligible system size from 1 MW to 2 MW; providing a guaranteed 15-year term with a minimum export price of 1.8 cents/kWh, and customer retention of the generation’s RECs.
REC retention was requested by stakeholders who want to use them for corporate sustainability goals and building certification, O’Donnell said. The utility had originally proposed paying customers for them.
Another change was the provision of a higher incentive for Living Building Challenge buildings that have solar arrays under 250 kW.
The challenge is a sustainable building certification program (CU No. 1764 ) that requires, among other things, generating more energy than is used.
The carve-out for such buildings, which are “highly efficient and have large solar systems” was provided because the original policy would have been “a bit punitive,” O’Donnell said, forcing them to overgenerate to meet the certification’s sustainability requirement due to the relatively low incentive level.
Offering the more lucrative net-metering structure instead “made a lot of sense,” he said, because it supports the Living Building Challenge, which is part of Seattle’s climate policy.
Also changed was the export rate, which was originally proposed as 2.57 cents/kWh and condemned in public comments as “very low” and “disappointing” by Steve Gelb, the local director of Emerald Cities, a nationwide clean energy and equity collaborative with a particular focus on bringing renewable energy to affordable housing.
This low rate, Gelb said, would discourage more investment in renewable energy systems, and “doesn’t seem to take climate change and future capacity needs into account.”
But he said he did support the amended version, with its 3.5 cents/kWh rate.
The committee also approved City Light’s 2020 entry into the Western EIM by passing CB 119571, the final legislative piece of an effort started in 2016, when the council authorized participation in the EIM implementation process.
Originally shooting to join in April 2019, SCL pushed that to 2020—new members are accepted only once a year on April 1—after determining it needed software upgrades and replacements, and ultimately selected Open Access Technology International to provide the systems required for both EIM participation and energy trading and risk management.
OATI is no stranger to the Northwest, having developed an intra-hour transaction accelerator platform (CU No. 1433 [9.5]) and a faster and expanded dynamic scheduling system (CU No. 1435 ) for the region on behalf of the Joint Initiative, a venture involving WestConnect, ColumbiaGrid, Northern Tier Transmission Group, some Western utilities and other participants (CU No. 1369 ).
The company has also provided EIM-related software to a fair number of current participants, including NV Energy, Portland General Electric, Idaho Power and Sacramento Municipal Utility District.
Sarah Davis, SCL EIM program manager, announced to the committee that on Aug. 1 they successfully cut over to the new energy trading and risk management system, which she described as a “critical software piece” the utility uses to conduct transactions in bilateral markets.
Over the eight-plus months before going live in the EIM on April 1, SCL will configure and test EIM-specific software; perform connectivity testing in September with California ISO, which hosts and operates the market; and conduct several readiness tests.
Both bills will come before the full council for consideration on Sept. 3, the first meeting after the summer break.