Third Party Leasing of Solar Electricity
Our Position: support
This bill allows an electric utility customer to become a consumer of renewable energy without having to shoulder the high upfront cost of equipment like solar panels and to make use of net metering and distributed energy resource programs.
Bill Number: S.1189 (formerly S.536)
Sponsor: Senate: Gregory, Reese, McElveen, Hembree, Hutto, Lourie, Campsen, Cleary, Allen, Shealy, O'Dell, Campbell, Cromer, Hayes, Verdin, Sheheen and L. Martin
Legislative Session: 2014
5/13/14: The bill is before the House Labor, Commerce and Industry Subcommittee, having made it through the Senate unanimously. This bill allows an electric utility customer to become a consumer of renewable energy without having to shoulder the high upfront cost of equipment like solar panels by leasing solar panels. Through this innovative, solution, consumers can lock in affordable, long-term rates for electricity produced on their own property. The bill makes this financing possible by allowing third parties to lease electricity to an existing customer of an electric utility. This legislation represents a 'compromise' by all parties involved and would work to move SC forward to far beyond our current solar capabilities.
Contact your state Representative in support of this bill.
To find your state Representative, visit the State House's home page and find the "Find Your Legislators" application in the lower left corner of the main page. Click here to do so.
Visit here for the Senate bill: http://scstatehouse.gov/sess120_2013-2014/bills/1189.htm.
Overview of Consensus Legislative Proposal
Third Party Leasing
· Statewide application
· 1000kW or 100% contract demand for commercial and 20kW residential
· Program under jurisdiction of PSC that specifies entities are not utilities if rules are followed
· Systems registered with ORS and ORS provides oversight
· Electric providers may require participation in applicable rate schedules
· Multiple premises and multiple customer arrangements are prohibited
· Prohibition on 3rd parties selling electricity would remain
· Electric providers may offer their own leasing programs
· Capped at 2% of Residential/Commercial and 2% of Industrial 5-year rolling average retail peak capacity
· Through the DER program (outlined below), utilities are required to provide a program to support access to distributed energy resources for South Carolina entities holding tax-exempt status under the Internal Revenue Code.
· Triggered by the implementation of new net metering
Distributed Energy Resource Program
· Opt-in for utility (tied to new net-metering)
· Applies to multiple renewable resources
· Have to file a plan with the PSC for review and acceptance
o Enhanced cost-recovery tied to plan acceptance
· Once they opt-in, the utility agrees to hit the follow minimum targets by 2021:
o 1% of the previous five year average of the electrical utility’s South Carolina retail peak demand in 1 MW to 10 MW (utility scale)
o 1% of the previous five year average of the electrical utility’s South Carolina retail peak demand in 1MW or less (residential/commercial scale) with 25% coming from 20 kW or less
o Program to support access for tax-exempt entities
· If they do hit the minimum targets, the utilities are allowed to, but not required to, invest in an additional 1% (which is not a cap)
· The total incremental cost (that is cost that is above avoided cost) that can be passed along to consumers is capped for the duration of the program at no more than $12/year residential, $120/year commercial, and $1200/year industrial
Net Energy Metering
· Applicable to diverse renewable energy resources
· System Sizing: Increase to 1000 kW commercial (or contract demand) and 20 kW residential
· Existing users grandfathered until Dec. 31, 2020
· Program limit: 2% of 5-year rolling average retail peak capacity
· Excess generation is banked and used to offset future kWh usage and any remaining excess will be netted out annually and paid at utility’s avoided cost
· Utilities recover all of their costs, from generating and non-generating consumers
· Charges and credits will be established in accordance with a methodology established by the Public Service Commission
o Methodology will be supported by an analysis and calculation of the relative benefits and costs of customer generation to the electrical utility, the customer-generators and the customers of the electrical utility that are not customer-generators.
o Proceeding to establish this methodology will begin within 30 days of the enactment of the legislation
· Upon completion of the Methodology, electrical utilities shall file their own analyses
· No meter aggregation, group/joint billing or virtual net metering
· Triggered by commission accepting utility DER program
· Allows a utility to recover the avoided cost of power purchased through the DER Program to be recovered through a fuel proceeding
· Once DER program approved, grants utility a certificate of environmental compatibility and public convenience and necessity and allows full cost recovery of all reasonable and prudent costs