The Department of Environmental Protection (“DEP”) published notice in July inviting comments on a draft plan to increase solar electric generation to 10% of Pennsylvania’s electric consumption by 2030. The draft plan was developed through the Finding Pennsylvania’s Solar Future stakeholder process involving over 500 participants who helped explore the likely pathways to achieving the 2030 target by modeling the economic, environmental and health factors of different policy recommendations across different sections in the state. The plan looks at potential changes related to: Alternative Energy Portfolio Standards, Carbon Pricing, Siting and Land Use, Tax Incentives, Access to Capital, Grid Modernization, Contracting, Virtual Net Metering, Community Solar, Alternative Ratemaking, Property Assessed Clean Energy and Addressing Interconnection Issues.
IECPA believes that while there are many good recommendations in the report, there are a few areas of concern:
PROPOSED STRATEGY 1: Implement an increase in the AEPS PV carve-out to between 4 and 8 percent by 2030 and ensure creditable SRECs are limited to those generated in Pennsylvania wherever possible.
Concern: These ‘carve-out’s” artificially impact the market selection of the most economical alternative / renewable energy sources.
PROPOSED STRATEGY 4: Implement a carbon pricing program and invest the proceeds in renewable energy and energy efficiency measures.
Concern: Another non-market mechanism that will raise energy cost.
GRID SCALE SOLAR
PROPOSED STRATEGY 2: Evaluate and consider utility ownership of solar generation especially in cases where market-driven deployment may be insufficient to achieve public goals and/or reliability concerns. At present, the ability of Pennsylvania utilities to own solar generation is not expressly provided for in legislation and has not been directly addressed by the PUC or the courts. Some parties interpret the current rules and regulations to prohibit utility ownership of generation entirely. Other parties interpret the rules to say utility ownership is permissible, but utilities would be restricted to receiving market price and may not include generation in the rate base or receive a guaranteed rate of return. The uncertainty around the legal status of such ownership is, itself, a barrier to utility investment in such resources. Concern: Opens the door back to utility generation ownership and full service regulation.
PROPOSED STRATEGY 3: Ensure alternative ratemaking is addressed in a manner that does not create a disincentive for solar deployment. Increases in fixed or unavoidable costs lowers the return on investment in solar systems. For that reason, higher fixed charges or separate demand charges for residential customers could act as a significant disincentive for solar deployment. Concern: Could impact rate design and appropriate cost allocation and collection.
A booklet overview of Pennsylvania’s Solar Future, as well as the full final plan, draft plan, and public comments are available at https://www.dep.pa.gov/Business/Energy/OfficeofPollutionPrevention/SolarFuture/Pages/Pennsylvania's-Solar-Future-Plan.aspx