Dive Brief:
- To expand its net energy metering (NEM) program beyond the current cap of 310 megawatts, which it will hit in 2016, Los Angeles Department of Water and Power (LADWP) would need to unbundle the bill electricity charges from infrastructure maintenance charges to avoid shifting the bulk of the grid's cost to non-solar-owning ratepayers, according to a recent report from LADWP to the City Council.
- A push by the Koch brothers-funded American Legislative Exchange Council (ALEC) is making NEM an issue, allowing utilities across the country to raise concern about a NEM-caused cost shift to non-solar-owners, while advocates argue rooftop solar saves ratepayers money by reducing the need for new power plants and transmission lines.
- LADWP wants to avoid the controversy by expanding its 100-megawatts-by-2016 feed-in tariff (FIT) program, one of the biggest in the U.S. With FITs, it argues, the utility pays solar owners for the electricity sent to the grid and then bills them for their electricity use, allowing for infrastructure-normal bill maintenance charges.
Dive Insight:
Germany’s FIT has driven enormous solar growth.
The LADWP FIT is similar to the value of solar tariff (VOST) recently instituted in Minnesota and originated by Austin Energy.
LADWP said it would only expand NEM if it can impose a bill charge on solar owners for use of the grid.
If a net metered solar owner's bill zeroes out, there is theoretically no bill on which to add an infrastructure charge even though, according to the ALEC argument, those customers still need the grid. LADWP proposed unbundling the residential rate charge to allow a bill charge for infrastructure maintenance.
Third-party-ownership (TPO) companies are expected to object to the LADWP proposal because NEM serves their leased solar business model whereas FIT and VOST programs boost solar ownership.
