EnergyWire: Hope for solar awakening in Chicago runs into utility backlash

Nearly a decade after the Illinois Legislature adopted a provision enabling development of community solar projects, not a single megawatt exists in areas served by investor-owned utilities.For that reason, Illinois regulators spent more than two years taking a second look at the law. And last fall, they went ahead and approved a rule meant to boost solar development — including projects that could be shared by apartment dwellers and high-rise occupants in Chicago who don’t own a roof for solar panels.

But in Springfield, where lobbyists for the utilities roam the wide Capitol corridors, Chicago-based Commonwealth Edison Co. and St. Louis-based Ameren Corp. have pushed legislators to block the changes, arguing that the rule would create unfair subsidies borne by their customers. For their part, solar advocates warn that if the state’s major electric utilities get their way, it will mean a setback for the state’s nascent solar market.

“The utilities are aggressively trying to kill this,” said Brad Klein, senior attorney with the Chicago-based Environmental Policy & Law Center. “They continue to dig in their heels and oppose anything from getting started.”

The Illinois Commerce Commission’s rule adopted Nov. 12 has support not only from clean energy groups, but also from the Office of the Illinois Attorney General, the Citizens Utility Board, the city of Chicago and others.

On Tuesday, the rule goes before the 12-member Illinois Joint Committee on Administrative Rules (JCAR). The obscure, bipartisan committee is tasked with ensuring that administrative rules are consistent with legislative intent.

Illinois’ original net-metering law goes back to 2007. The agreements, which allow the owners of small solar systems to receive credits for the excess energy they produce and return to the grid, are essential to the economics of small, customer-owned solar projects. Credits can be carried for months and help offset charges when the systems don’t produce enough energy to meet demand.

The 2007 law included a provision for so-called meter aggregation to enable participation by renters and condo owners to take part in projects and tap the benefits of solar energy in the same way as individual homeowners with rooftop systems.

Community solar — a concept gaining popularity in other Midwestern states like Minnesota, where hundreds of megawatts are being developed — is viewed as an increasingly important option for people in Chicago, where hundreds of thousands of energy consumers don’t own their rooftops.

The concept could also be appealing to cities and counties across the state, many of which have taken advantage of a state law enabling municipalities to pool their electric load and shop for lower electricity prices. Some cities have chosen “green” power programs, but those programs frequently rely on the purchase of renewable energy credits from out-of-state wind farms.

Costs vs. benefits

Illinois initial net-metering law put a cap on total participation in net-metering programs at 1 percent of utility peak load. ComEd agreed to raise the cap to 5 percent of peak load in an effort to win support for a bill it pushed to overhaul how rates are set and paved the way for billions of dollars in spending for grid modernization and smart meters.

Among other benefits, ComEd said the grid investments would help enable more distributed generation.

Years later, however, fewer than 500 customers in ComEd’s northern Illinois service area — a group representing less than one-tenth of a percent of the utility’s peak load — have net-metering agreements.

Renewable energy supporters say among the reasons why solar has yet to take off in Illinois are the barriers prohibiting development of community solar projects.

In its unanimous Nov. 12 order, the Illinois Commerce Commission (ICC) agreed that changes to the net-metering rule were needed. The rule requires utilities to provide “virtual net metering” credits for customers who subscribe to a community solar project developed by other electric suppliers.

It would also require energy suppliers to consider net-metering applications individually and provide written explanations within 30 days if it rejects them.

In approving the change, the commission didn’t buy utility arguments about subsidies. “To essentially ignore these applications based upon a blanket policy of disallowing meter aggregation, without explanation, distorts the purpose of [the law] and is fundamentally unfair to customers,” ICC said.

It is unclear whether meter aggregation increases costs for utility customers, ICC said. What’s more, ICC said, it is unclear whether it “outweighs the potential benefits” of aggregation.

Commissioner Miguel del Valle went further. The pushback from ComEd runs counter to statements by the utility’s chief executive, Anne Pramaggiore, who said consumers should be provided expanded choices and more clean energy solutions.

“Yet ComEd’s position in this docket was to block this clean energy option and customer choice,” del Valle said, according to minutes of the meeting. “The company’s reasons for trying to reject the ability for anyone to participate in these programs are vague, unsupported by any evidence and seem to fundamentally misunderstand the benefits of distributed generation.”

Net metering on trial

A key issue raised by the utilities is who is the appropriate party to approve meter aggregation agreements.

In letters to JCAR, the utilities maintain that changes approved by ICC go too far in giving that power to competing electric suppliers. The utilities say they, the managers of the local delivery grid, should have the final word.

What’s more, ComEd argues that there’s an important distinction between a solar array mounted on the rooftop of a home and a community solar project that serves a multi-unit apartment building and still relies fully on the distribution grid.

“Consequently, there is no reasonable basis to offer such a customer a credit for ‘avoided’ delivery service use,” ComEd said in its letter to the legislative committee.

ComEd said in a statement to EnergyWire yesterday, “We are committed to integrating renewable energy sources, including responsible and equitable solar, into Illinois’ existing energy system.”

The Illinois Competitive Energy Association, which represents alternative electric suppliers, also raised concerns in a letter to JCAR. While the group supports meter aggregation, it has concerns about how the agreements are implemented and filed briefs with the commission supporting the utilities’ position.

Solar advocates, meanwhile, say the utilities’ argument ignores the benefits to the grid, and that net metering for community solar projects should work the same as it does for individual customers. Giving utilities broad discretion to veto projects goes against what lawmakers originally intended, they said.

“They are really trying to put net metering on trial,” Klein said. “That’s not to say we shouldn’t have a broader conversation about net metering. But that’s not the appropriate role for the commission. They’re not there to make new policy.”

The Illinois solar industry believes there’s ample pent-up demand among Illinois customers and solar developers that are waiting to pursue projects once they can take advantage of the state’s net-metering law.

For instance, the city and Cook County were selected by U.S. Department of Energy’s SunShot Initiative last year for a $1.2 million grant to pursue community solar pilot projects and make community solar available to 30,000 people in the area within the next eight years.

“There are a lot of great pilot sites that are ready to go and move forward,” Klein said. “This new rule could be a vehicle for translating that interest and enthusiasm into some real projects.”

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