Title
Proposed Revisions to the Feed-In-Tariff (NB)
Staff is recommending changes to the ordinance enacting the Solar Feed-In-Tariff (FIT) designed to clarify program administration and to re-introduce the option of net metering for commercial customers. More specifically, language is proposed to clarify the application and administration of the program's standards and criteria, especially as related to the waiting list of applications and tariff pricing for future years.
Explanation
On March 1, 2009, Gainesville Regional Utilities began offering the Solar Feed-in-Tariff with an annual capacity limit of 4 MW. Applications exceeding the capacity limit were obtained within a few weeks and administrative procedures were immediately created to establish: a) the minimum requirements for a complete application; b) a first come, first serve capacity queue; c) deadlines for project completion to avoid "squatters" in the queue, and; d) guidelines for managing the queue. The queue is now full through 2015 (28 MW). These actions were taken under the administerial authority granted to the General Manager by the City's charter and the Commission has been informed of the decisions being made on an on-going basis. Because the enacting ordinance only mentions the General Manager's ability to stop signing contracts for 2009 when the capacity limit is reached, it is prudent to be more explicit as to the actual program structure. To avoid disrupting the construction activity spurred by the FIT program, staff is recommending allowing providers who are in the FIT queue for 2010 to connect to the utility's system prior to January 1, 2010 and receive the System's avoided cost for energy delivery, which is the prevailing fuel adjustment plus $0.0065 per kWh, the value of fuel embedded in base rates. After January 1, 2010 these systems will receive the 2010 FIT price for energy delivered. This will allow the contractors to continue work throughout the year rather than only in the few months prior to January 1st when new contracts begin.
One issue that has emerged is whether or not the capacity limit of 4 megawatts is defined in terms of direct current (DC) or alternating current (AC). Currently the ordinance is silent on this issue. This is relevant because solar photovoltaic systems produce DC power which must be converted to AC power for use on the GRU distribution system, and capacity is lost in this conversion. Consequently, a given system's AC power capacity is less than its respective DC power capacity. Staff has taken this conversion loss into account in its reference system design and was explicit in their intent that the solar system's DC power rating would be the applicable unit of measure for capacity (see November 28, 2008 City Commission Presentation). One of the most compelling reasons that staff took this approach is that the DC rating is stated on the nameplate affixed to the back of each solar panel thereby making it easy to identify. Staff's proposal is to make this explicit in the enacting ordinance.
The ordinance enacting the FIT includes the proposed degression schedule through 2018, showing a decrease in the tariff rate in future years. Staff's intent was to propose adjustments to the degression schedule based on developments in the solar market, and staff proposes to clarify this aspect of the ordinance.
The Commercial solar rebate and solar net metering program was removed when the FIT was put into place because of the favorable economics of the FIT and to simplify program administration. Resumed funding of the State solar rebate program, coupled with the filling of the capacity queue through 2015, has renewed interest in solar net metering among our commercial customers. Therefore, staff is proposing to reinstate the option to allow commercial customers to choose net metering and thus further accelerate the deployment of solar energy systems.
Recommendations
The City Commission 1) receive a presentation from staff regarding proposed changes to the Feed-in-Tariff ordinance, and; 2) authorize the City Attorney to draft and the Clerk to advertise the proposed changes to the ordinance.
Fiscal Note
There will be minimal fiscal impact of restoring commercial net metering without rebates.
Drafter
Prepared by Ed Regan, P.E., AGM for Strategic Planning
Submitted by Robert Hunzinger, General Manager