Critics: Minnesota utility’s solar plan pushes out competitors

Clean-energy advocates say a Minnesota utility’s community solar program is a step in the right direction, but are also concerned it will limit developments from other entities.

More than 50 organizations and individuals have submitted a letter to the Minnesota Public Utilities Commission asking that it request modifications to Minnesota Power’s solar garden proposal. The PUC is scheduled to discuss the issue on Thursday.

The utility, owned by Duluth-based Allete, has 144,000 customers in northeast Minnesota.

The gardens would include a one megawatt (MW) project and a smaller 40 kilowatt (kW) installation, both in Duluth. U.S. Solar would build, own and operate the larger project, while the utility would own the 40 kW installation.

Jessica Tritsch, an organizer with the Sierra Club’s Beyond Coal campaign, said the way Minnesota Power has created its community solar program “constrains innovation” by not creating a process for other developers – such as private companies, communities and churches – to build gardens in its territory.

“I think people are really excited about the opportunity to have more solar energy across Minnesota and in northern Minnesota,” she said. “There was a belief that community solar would add to the region’s economy.”

However, if the program is owned solely by Minnesota Power, community solar may not have as great a potential as it would have in a more open process allowing other community solar developers into the mix, she argued.

The group, calling itself the Northland Community Solar Coalition, includes churches, environmental organizations, clean energy groups and climate change activists such as Will Steger.

While conceding Minnesota Power has made changes to its original proposal, filed last September, several outstanding issues still remain, according to the group’s letter.

In addition to concerns the program “restricts market innovation,” the group questions whether participants will get a fair rate and whether the project should count toward the utility’s requirements under the state’s solar standard, which requires utilities to get 1.5 percent of their electricity from solar by 2020.

A different approach to community solar

Minnesota’s 2013 community solar law only applied to Xcel Energy’s territory, leaving the state’s other investor-owned utilities, among them Otter Tail Power and Minnesota Power, to devise their own approaches to developing gardens, said Bret Pence, of the Duluth nonprofit Ecolibrium 3.

That law focused on allowing private developers and communities to submit community garden proposals to Xcel, he said. The process “was very, very proscribed,” Pence pointed out, in creating bill credits of community solar subscribers and a host of other timelines and processes.

The PUC will have to determine whether Minnesota Power’s program is within “the spirit of the community solar law,” he added.

Last week the commission received 66 pages of comments on the program. One of those came from the Department of Commerce, which oversees community solar.

The Department of Commerce suggests because the utility has yet to meet the state’s solar standard it should simply count it against the state’s 1.5 percent solar standard, rather than making a subset of customers pay a premium for the project.

“The department’s recommendation of ‘just include of it your power supply’ equates to a no solar garden program, it kills the program,” said Jennifer Peterson, the utility’s policy manager.

Minnesota Power, by law, also has to see built four MW of small solar of 20 kW or less by 2020 to meet state mandates. That’s part of the state’s “carve out” law for small solar, which requires utilities to produce 20 percent of its requirement from 20 kW or smaller installations.

Many customers in the utility’s territory live in properties where solar will not work, she said, and offering them the option of community solar should allow for the utility to essentially count their generation in the carve-out program, Peterson said.

Over the past decade Minnesota Power has seen 153 rooftop solar installations, with an average size of 5 to 6 kW, said spokeswoman Amy Rutledge.

To make the state’s goal “is quite a jump,” Peterson added, especially considering only projects starting after the 2013 law passed will be counted.

“Many of those don’t qualify,” Peterson said, and the utility struggles with a largely rural population base alongside a handful of big industrial users. “The carve-out is a challenge for us.”

Minnesota Power wants community solar and set up the program after a great deal of customer and stakeholder research, she said. The utility’s first two pilots could to lead to more efforts that may broaden the development pool, Peterson said.

In a followup email, Rutledge added that the utility will take the PUC’s guidance on the carve-out issue, noting “from our perspective, the design of the program is more important than how it’s counted.”

Answering critics who say Minnesota Power is not allowing others to develop community solar, Peterson said  “there is plenty of room in this state for more than one type of solar program. Ours is very similar to co-op gardens that have operating for years. Let customers decide which programs operate best.”

In addition, she said the utility isn’t “benefiting” from community solar in the sense it is earning money off the program. It will charge no application or administration fees or ask the PUC for a rate of return.

Customers will entirely pay for the program instead of having it shared with non-solar customers. They can pay for being part of community solar through a subscription, a lump sum payment or fixed fee, the latter two which will be credited on their bills.

“We’re not hoarding extra fees that would otherwise go to others in the community,” she said.

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