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Changes to Renewable Energy Pricing Cause for Concern 

Changes to Renewable Energy Pricing Cause for Concern 
30 January 2020

A recent update to renewable energy pricing in Utah has Utah Clean Energy’s experts on high alert!  Rocky Mountain Power proposed changes to Schedule 38 Avoided Cost pricing for renewable energy projects. Avoided Cost pricing determines what large-scale renewable energy projects in Utah are paid for the clean energy they supply, and it is the basis for companies hoping to purchase clean energy.  

The proposed updates reflect a significant departure from previous pricing:  

  • RMP’s value for utility-scale solar has dropped from $24/MWh to just $13/MWh - a 45% decline.  
  • Wind prices dropped slightly, from $28/MWh to $27/MWh.  

These low values for clean energy effectively halt any future utility-scale solar development in Utah outside of the utility’s planned resource acquisitions. 

Utah Clean Energy’s utility experts submitted a notice of challenge regarding these changes.  

Rocky Mountain Power’s update includes new and updated assumptions and inputs, including changes to the Production Tax credit, a new fuel price forecast, updates to reflect the 2019 IRP preferred portfolio, and an updated queue of Qualifying Facility projects. These inputs are used to determine how much Rocky Mountain Power will spend to purchase energy in the future, and therefore how much a solar or wind project should be paid for providing that energy so that Rocky Mountain Power doesn’t have to purchase it. 

Utah Clean Energy does not believe that Rocky Mountain Power has provided enough information to explain and support such a significant and unusual decrease in the avoided cost price for solar.   We have requested a comment period or technical workshop with the Utah Public Service Commission, in order to gather additional information to understand these new inputs and assumptions.   

We have also submitted a notice of challenge to the proposed updates, and may challenge the following issues in the event that the comment period or technical workshop does not resolve our concerns:  

  • Rocky Mountain Power proposed to change the proxy resource that is used as a stand-in, for modeling purposes, to determine the price a new renewable energy resource would be paid.  
  • Rocky Mountain Power’s new 2019 IRP preferred portfolio has had a profound impact on avoided cost pricing because of its interaction with the “Proxy/PDDRR avoided cost method” - the model Rocky Mountain Power uses to determine avoided cost pricing. Rocky Mountain Power’s 2019 long-term resource plan calls for the addition of significant new wind, solar, and battery storage resources because new renewable resources will save customers money in the long-term. Yet Rocky Mountain Power’s modeling has lowered the avoided cost value awarded to third-party developers who choose to build wind and solar resources – the very same resources the utility is calling for in their 2019 preferred portfolio. 
  • For the first time, Rocky Mountain Power’s preferred portfolio also includes storage, so RMP is proposing to compare tracking solar resources built by third-party developers to solar + storage resources from their own portfolio. We know that solar + storage will be an important part of our future grid, and it’s important that we appropriately model the value of solar and storage resources, both combined and in isolation. 

We hope to gather more information about the changes in Rocky Mountain Power’s filing in the next few weeks. In order to effectively challenge these changes, we will likely need resources to complete modeling or hire grid experts. If you’re interested in supporting this effort, or if your company is interested in building a Schedule 38 or a Schedule 34 project, contact  for more info.