Oregon's energy department joins critics ripping PUC report that would shrink solar incentives

The Oregon Department of Energy has joined renewable energy advocates in slamming a draft Public Utility Commission report that recommends significant changes to two major solar incentives – but the report did find a pair of supporters: Portland General Electric and PacifiCorp.

In its draft report to the legislature, the commission characterized the Oregon solar industry as “robust” and nearly ready to thrive with reduced support from utility ratepayers.

The Oregon Public Utility Commission wants to change the way residential solar energy…more

The Department of Energy, in comments filed Wednesdaywith the PUC, painted a different picture.

“We believe it is more accurate to describe solar as an emerging industry that is still vulnerable to disruptions in the incentive programs,” ODOE said. The department added that “Oregon is likely to be one of the last states to reach grid parity for solar PV systems and may therefore require incentive programs of longer duration than many other states to maintain a solar industry.”

The report on solar incentives was ordered by the legislature in a bill passed in June 2015, and is due in final form on September 15. Renewable energy advocatesroundly criticized the draft as misguided and thinly sourced, and said its recommendations ignored a vast array of uncertainties.

The Department of Energy, only slightly more tactfully,expressed similar views. The department rejected the commission’s recommendation to remake the longstanding net metering program, which allows utility customers to cancel out their electricity usage on a one-for-one basis with solar energy they produce.

“The draft report’s proposal to eliminate existing net metering programs for customers with new PV installations and replace them with a ‘solar metering program’ based on the resource value of solar (RVOS) ... is premature and could result in a variety of unintended consequences,” ODOE said.

ODOE also panned the commission’s recommendation to ramp down Energy Trust of Oregon rebates that meet a portion of the above-market costs of installing solar, which the commission had justified on the basis that solar costs are falling.

The department noted that the Energy Trust program shrinks the size of the rebates to reflect the declining cost of solar. “The ramp-down has already been happening and will naturally occur as above-market costs decline,” ODOE said.

As sour as the Energy Department was on the draft report, PGE commented that it “offers appropriate direction regarding incentivizing effectiveness and efficiency of solar resources in the State of Oregon.”

The utility was particularly enthusiastic about the net metering recommendation, which it said it “strongly supports” because it would “properly compensate solar systems within a utility's service territory for the benefit those solar systems provide to the grid.”

Like many utilities, PGE has long contended that at high levels of participation, net metering, by reducing solar customers’ bills, will shift transmission and distribution costs to non-solar customers, causing rates to rise.

Critics of the draft report noted that no new evidence of cost-shifting was offered by the commission, which instead focused on the “potential” that it might happen.

PacifiCorp was less effusive than PGE in its comments, but said it was “generally supportive” of the proposed net metering change, pleased that it “acknowledges the potential for the existing NEM program to become unsustainable as it continues to grow.”

The utility struck a similar tone on the Energy Trust rebates, saying “changes in the use of public purpose charges may need to be considered due to the decrease in the above-market costs of solar and the Commission-proposed Solar Metering Program.”

The PUC will hold a comment session for stakeholders Monday in Salem, and is set to put out a second draft of the report eight days later