Southern’s Georgia Power Advanced Solar Initiative (“GPASI”)
Southern’s Georgia Power Advanced Solar Initiative (“GPASI”) has been making headway among the renewable press with much praise. However, as we all need to recognize the devil is in the detail and depending on your perspective; this may or may not achieve what you desire. I know many people do not have time and we depend on our journalists. However, every now and then, one needs to check on the thoroughness of the journalists. I went ahead and downloaded the complete filing.
Southern has done a fine job getting ahead of the mandate. In fact, this is what most utilities should strive for. In essence they have pre-crafted the legislation in a more intelligent way than any lobbyist or legislature could have done. The have covered the basics of dealing with cost, the associated fees of solar, taken care of performance concerns, and made it clear how they plan to recover their cost.
Key statements: “We do not intend to build or own solar facilities as part of this GPASI program…. Georgia Power will earn no profit or return.”
These are noble statements from the local utility. In order to make such bold statement, they must be anticipating the volumes not to be worthy of a return. However it is a large enough cost threat that it would be nice to guarantee cost recovery. In this area Georgia Power did a great job outlining the cost and hassle of solar power and making sure the responsibility and the cost will be borne by the developers.
Cost Capping
Key statement: “Each RFP will require bidders to bid a “not to exceed” price of 12 cents per kWh, the calculation of which will include a capacity benefit that will be benchmarked to current market pricing obtained in the 2015 RFP in Docket No. 34218” “Under the Small-Scale option, purchases will be for a fixed energy amount at a levelized solar price of 13 cents per kWh for a term of twenty years”.
They have set a price cap for the solar. I believe this figure will be hard to meet. By getting this level approved ahead of time, they won’t have to deal with projects being forced to reduce their cost structures.
Ancillary Cost (Headaches of solar)
Key statements: “…bidders will be required to pay a fee of $0.25 per kW bid to participate in the RFP to help defray the program costs.” “Bidders will be responsible for the cost of all metering to be installed, owned, operated and maintained by Georgia Power and would be required to provide performance security”. “Costs to interconnect will be provided to the bidder and are the responsibility of the bidder.” “Each bidder is required to make separate applications to interconnect to the distribution or transmission system. Participation in the RFP does not initiate interconnection activities.” “Georgia Power will make it clear to every bidder that the bidder is solely responsible for ensuring the technical, regulatory and financial viability of its project.” “The Company will install metering for the Participant’s solar facility. The Participant will enter into a contract with the Company to cover all incremental metering (e.g. poly-phase meters, trans sockets, dual-gang sockets, etc.) and interconnection costs. Additionally, the Participant must pay the monthly metering cost for the facility.”
All the statements above deal with the headaches of a solar mandate. They are attempting to stop the developers using a shotgun approach by charging a fee to participate in the RFP. All the nuisance costs of installation will all be on the developer including the meters and interconnections.
Performance
Key statement: “If Participant’s monthly capacity factor is less than 10 percent, Participant must make necessary adjustments or repairs to improve the monthly capacity factor to greater than or equal to 10 percent. If the monthly capacity factor for any four months within a calendar year is less than 10 percent, the Company has the right to terminate this agreement.
“If the capacity factor is greater than 20 percent, the Company has the right to inspect the facility to ensure its applicability. Due to the limitations of current solar photovoltaic technology, if the monthly capacity factor is greater than 20 percent in a second month, the Company may ask the Participant to explain the greater than 20 percent capacity factor. If the reason does not justify a capacity factor greater than 20 percent in the Company’s reasonable discretion, the Company may consider the resource to be in default and has the right to terminate the agreement.”
Solar performance and any lack of consistency is now the responsibility of the developer. They are essentially forcing them to perform the needed maintenance (window washing). In addition they are dealing, ahead of time, with some of the shady business practices like running other generation through the meter.
Recovery Method
Key statement: “Payments for energy purchased through this program are a recoverable fuel cost of the Company”.
This makes it clear how they plan to recover the cost. It will be on the fuel cost component. This is a very crucial point because most of the plans developed by legislature do not make that part clear.
In the end, I expect everything outlined would reduce the amount of solar that would have been done if it was legislated. Now that ALL the cost and fees of connecting and operating solar is to be paid by the developers, it will be hard to produce significant volumes within their price caps. So for those pro-renewables folks, I suspect they might not be too happy. For the utilities around the country, this is a great starting point to make sure all the headaches around solar are not yours and there is a clear cut method of recovering your cost.
I have many years of experience in evaluating various technologies, planning, and developing an integrated resource plan. If you are looking for some insights or additional points of view into future technologies or power markets, please consider contacting All Energy Consulting.
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