Monthly Archives: March 2015

Petition: Tell Oklahoma Legislators to Increase Our Renewable Portfolio Standard (RPS)

Tell Oklahoma Legislators: Increase our renewable electricity standard

 Investing in clean energy helps fight climate change, reduces death and disease from air pollution and creates good, local jobs. I urge you to support legislation to increase the renewable electricity standard (RPS) in Oklahoma and develop policies to encourage the development of renewable energy investments..

Why is this important?

Across the country, 30 states and the District of Columbia have renewable electricity standards in place that require a certain percentage, some as high as 33%, of all electricity to be generated from clean and renewable sources of energy. Oklahoma requires only 15% . It is 11.25% in actuality, because the legislature allows the utilities to meet a quarter of the renewable requirement by conservation.

Oklahoma has the potential to be a leader in renewable energy but it is falling behind because the state is not being proactive in encouraging investment in renewable energy.

It is time for that to change. With the increased phase out of coal fired plants and the uncertainty in natural gas prices and supplies, Oklahoma must act to insure a supply of electricity for the future. We have a good supply of natural gas, but that could change if fracking and disposal wells are linked to water pollution and earthquakes.

It’s time for the Oklahoma legislature to pass a renewable electricity standard that requires utilities to invest more in clean sources of energy.

Please, Help Keep Electric Rates Low – No Extra Fees On Solar Energy

Oklahoma SB 1456 , dubbed the Sun Tax,  is not a tax, but allows power companies to assess an extra fee on distributed generation (DG) customers who install renewable energy systems and hook to the power grid for backup.  Under the law, both PSO and OG &E have filed a request with the Corporation Commission to assess additional fees on DG customers. Those requests should be denied, as renewable energy development will help keep electric rates low. 
 
Public hearings on the request will be held in Oklahoma City on March 31 at 1:30 in Rm 301  of the Corporation Commission Building at 2101 North Lincoln Blvd. It would be great if a number of people could attend. Written comments may be submitted to N.Scott@OCCemail.com .  
Below is an article to refresh your thoughts on the issues involved. Please feel free to use any of the information in the article. The Corporation Commission is probably not interested in ALEC’s role so much as they are  your comments on  the rate case.
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At the 2013 American Legislative Exchange Council (ALEC) meeting in Chicago, the Energy Committee, dominated by power and fossil fuel companies, decided one of  ALEC’s goals should be to discourage the spread of renewable energy. Their plan to do so was by weakening renewable portfolio standards (RPS), by claiming that renewable energy systems would make electric rates go up, and by promoting the idea that net energy metering (NEM) customers who install their own solar panels and use the grid for backup were “free riders” who did not pay their fair share of infrastructure costs. Legislation has since been introduced in a number of states intended to increase fees on NEM customers and to reduce the state’s RPS requirements.

SB 1456: Oklahoma passed SB 1456 the next year, which allows power companies to assess an extra fee on distributed generation (DG) customers who install renewable energy systems and hook to the power grid for backup. The law was designed to discourage the investment in renewable energy by private individuals, but it may have unintended consequences for the power companies pushing the fees. Under the law, both PSO and OG &E have filed a request with the Corporation Commission to assess additional fees on DG customers. Public hearings on the law will be held in Oklahoma City on March 31 at 1:30 on the third floor of the Corporation Commission Building. Studies (see below) have shown, when all things are considered, that DG customers provide a net benefit for all other customers. It is in the public’s best interest to request that not only should the fees be denied but, to be fair, the power companies should be required to compensate NEM customers for the extra power they produce.

Fairness: The rationale for SB 1456 was fairness, so the decision should be fair to NEM customers as well. First, NEM customers should be charged as any other customer for the electricity they use. DG  customers who use the grid for backup are required to have a net energy metering (NEM) contract with their power company which requires they pay for the installation and inspection of safety equipment. They also pay a customer fee which goes toward fixed costs and infrastructure, and they are currently not reimbursed for any extra power they produce, essentially providing free energy for the other customers, and they help to conserve energy. AEP/PSO’s states one of its mission is to “help customers use less energy and spend less for it”. Is it fair, then, that customers who cut their energy use in half by installing extra insulation are appreciated while those who cut their energy use in half by installing solar energy are charged an extra fee?

Second, NEM customers should be compensated fairly for the excess energy they provide. Research shows that states which encourage NEM customers have found they provide a small positive benefit both to other customers and to the power grid.  Why, then, should they be charged an extra fee?

Research: Studies have found that states which encourage net energy metering (NEM) experience a net benefit to all electric customers. A study by Crossborder Energy in 2014 found NEM allows utilities to avoid costs of generation and fuel, maintenance and upgrade of transmission and distribution infrastructure, transmission losses (which account to 7% of losses), capacity purchases, and compliance with renewable energy standards. The study concluded,” The cost which utilities avoid when they accept NEM power exported to their grid shows that NEM does not produce a cost to nonparticipating ratepayers; instead it creates a small net benefit on average across the residential markets.” While it does cause power companies to have to adjust their loads accordingly, NEM reduces peak loads, transmission losses, and the need for new power plants.  In California, the study found NEM “delivers more than $92 million in annual benefits to non-solar customers”.

Another important study was performed at the request of the Vermont Legislature who specifically charged the Vermont Department of Public Service with determining if there is a cross-subsidization with net metering and other retail customers. They were also asked to examine any benefits or cost of NEM customers to the distribution and transmission system.  The report found the specific ratepayer benefits, the statewide, and societal benefits of NEM as: “Avoided energy costs, including costs of line losses, capacity costs, and avoided internalized greenhouse gas emission costs; avoided regional transmission costs; avoided in-state transmission and distribution costs; solar’s coincidence with times of peak demand; and the additional benefit of the economic multiplier associated with the local investment and jobs created from the local manufacturing and installation of net metering systems. The report concludes, “ Even considering subsidies, solar net metering is a net-positive for the state of Vermont.”

These studies show that NEM customers provide a net benefit to ratepayers in states which encourage investments in solar and wind generation by private individuals. To be fair, NEM customers should be charged for the energy they use just as any other customer and they should be compensated for the extra energy they produce just as any other energy provider.

Unintended Consequences: Though SB 1456 was intended to discourage private investment in renewable energy, it may not turn out that way. Upon signing the bill, Gov. Mary Fallin attached a letter requiring “the Corporation commission to conduct a transparent evaluation of distributed generation consistent with the Oklahoma First Energy Plan. It also said, ” This evaluation mandates inclusion of all stakeholders including representatives of the solar distributed wind energy industries and utilities.” and “A proper and required examination of these other rate reforms will ensure an appropriate implementation of the Oklahoma first energy plan while protecting future distributed generation customers.”

The Oklahoma First Energy Policy encourages development of wind and solar energy, but it relies heavily on the increasing development of our natural gas resources. However, fracking and the associated disposal wells may be related to the increased incidences of earthquakes in Oklahoma.  If a definite link is established between fracking activities and earthquakes, it might greatly curtail Oklahoma’s production of natural gas. Oklahoma is now in the process of replacing some of its coal-fired power plants with natural gas plants. It would be prudent for Oklahoma to encourage the development of renewable energy systems. Recently, OG&E asked to increase its customer charges by $1.1 billion for federal environmental compliance and to replace an aging natural gas plant. Encouraging distributed generation customers to install extra capacity would not only help with the environmental compliance, but could eventually reduce the need to replace aging plants. Requiring that DG investors be compensated fairly for excess energy they provide would encourage them to install excess capacity to meet future demands.

A Model: Some electric co-ops , such as Oklahoma’s Indian Electric Cooperative, recognize the value of net energy metering. IEC allows net metering customers to accumulate credit for excess power and pays them at the end of the year for any excess credit at the wholesale rate, essentially treating them as any other power provider. If the Oklahoma Corporation Commission would adopt a similar model and require that NEM customers be compensated for the excess power they produce, it would greatly encourage private investments in renewable energy installations.