If Rocky Mountain Power decided to invest in enough new renewable energy to power every Utah home and business, Utah Clean Energy would throw them a month-long party. But, we aren't betting on this. What we are betting on is that Utahns want more clean energy, and that we have a robust renewable energy industry that can bring it to them, coupled with a utility with a vested interest in meeting customer demand for clean energy. There is room for both our utility and independent developers to meet this demand for clean energy, but we must ensure a fair playing field for everyone.
Earlier this year the Utah Legislature passed H.B. 261, "Renewable Energy Amendments," which took effect on May 8, 2018. The law allows electric utilities the right to take advantage of certain federal tax incentives associated with owning utility-scale solar projects (facilities that are over 2 MW in capacity). By allowing utilities to take advantage of these federal tax incentives, they can compete in the solar market with other solar developers, who already had access to the tax incentives. We support the bill as we want every avenue available to get more solar into the ground. But at the same time, it’s vital that the bidding process for new solar include transparency, objectivity, and fairness to ensure that solar developers can still compete in the market. That, in a nutshell, is the testimony we recently submitted to the Utah Public Service Commission.
How Electric Utilities Can Access Federal Incentives for Large-Scale Solar
H.B. 261 lays out a two-step process that utilities must follow in order to own a solar facility with access to the federal incentives. First, utilities must initiate a bidding process open to all parties to gather bids for a proposed solar project. The utility may submit its own bid for consideration. Second, if the utility’s bid is selected as the winning bid, the utility must obtain pre-approval before it may build the solar project.
The Utah Public Service Commission (“PSC”) reviews and approves the proposed bidding process and the pre-approval process for a winning utility bid. The PSC is tasked with ensuring that the bidding process is designed to create a level playing field for all bidders, utility and non-utility alike, and will only approve the construction of a utility owned solar project if it is in the public interest. In order to facilitate these responsibilities, the PSC will create a set of rules to govern both the bidding process and the pre-approval process.
Rulemaking Isn’t Fun, But Somebody’s Gotta Do It
On May 31, 2018, the PSC asked any interested parties to submit comments discussing any considerations that the rules should address. Utah Clean Energy’s comments emphasized the need for transparency, objectivity and fairness in the bidding process. Specifically, we requested that an independent evaluator participate in the bidding process where applicable, and that the rules require transparency and clear articulation of the evaluation criteria for bids. This will increase the probability that the bidding process will be fair and improve public confidence in the process.
We also requested that a summary of the bids be published after the completion of the bidding process. The price of solar is falling fast and giving the public the opportunity to see the actual price associated with building and operating large solar facilities is an important part of keeping Utahns in-the-know about the feasibility associated with transitioning away from older, dirty forms of energy to renewable energy.
Now, Rocky Mountain Power, Utah regulators and other stakeholders, including UCE, are working to put together a draft set of rules to propose to the PSC. The PSC will consider these proposed rules and over the next few months, draft and ultimately file the final rules that will govern the bidding and pre-approval process in H.B. 261.