Utah Slowly Constructs Clean Energy Markets

Laura Nelson

As Utah builds utility-scale solar and advances distributed generation, stakeholders are behaving collaboratively, according to Laura Nelson, executive director of Utah Energy Office. In this interview, she said that low energy prices have reduced the state’s incentive to pursue energy efficiency. The rooftop solar market has slowed this year. 

CEFF: How would you describe the solar-energy market’s current successes and challenges in Utah?

Nelson: Well, that the market is very robust for distributed solar and also for utility-scale solar. In the last [few] years, we’ve seen nearly 1,000 MW of new utility-scale solar come online.

And we do continue to see increases in distributed solar as well. Last year, we did negotiate a move away from net metering to a compensation type of payment – credit, if you will – for rooftop solar.

So there has been a bit of dampening to the rooftop solar industry. We see adjustment to the new cost profile, though it’s still very strong. We were growing very fast in rooftop solar.

There’s a number of factors that have contributed to that dampening. I think we’re down about 23 percent this year from installations last year in rooftop solar, but there is still a significant number of adoptions of rooftop solar.

For distributed generation, the most up-to-date data from Energy Information Administration indicates that Utah has a total of 250.827 MW of distributed solar - with Pacificorp (Rocky Mountain Power) representing 240.94 MW of the total.

Based on the Production Tax Credit administered by our office, 27 utility-scale solar projects were delivered in 2015 through 2016. Those 27 projects total 854.6 MW. They include:  

  • 15 solar projects that are close to 3 MW (one slightly less)
  • eight projects that are 80 MWs
  • three projects that are 50 MWs (one slightly more)
  • one project that is 20 MW

We are not aware of any new utility-scale solar projects for 2017 or 2018. 

Generally, we anticipate continued interest in delivering new renewable projects in Utah.

CEFF: What is your perspective on the energy efficiency market’s successes and challenges at this time in Utah?

Nelson: The energy efficiency market is very robust. The state caused a sustainable energy efficiency program for new state buildings. They will come in at 20 percent above standard.

I think that’s great. That sets a policy for the state that we are committed to realizing energy efficiency in our state buildings.

Utah’s interesting because about 83 percent of the electric service comes from a single investor-owned utility and 100 percent of the distributed natural gas comes from a single utility.

Both of those utilities have strong and effective energy efficiency programs.

If our jobs market in the energy efficiency space is any indicator, the United States Department of Energy calculates that we have somewhere in the neighborhood of 25,000-30,000 jobs in the energy efficiency space.

The challenge in Utah is low electricity rates – low energy rates overall. And that always makes it a little more difficult to realize that cost-effectiveness test for energy efficiency.

Both of our utilities are committed to realizing results. Some people would like to see more and different types of energy efficiency programs. I think they’re working to innovate.

For example, Rocky Mountain Power, the electric service provider, is working on a project for a multifamily housing development.

It’s unique in Utah, with our low rates, to provide energy efficiency – and to provide access to electric vehicle charging and other services that you wouldn’t expect to see coming out of the utility.

CEFF: What stakeholder decisions would catalyze forward movement in these two markets in Utah?

Nelson: Well, we have pretty good stakeholder engagement on the demand side management piece.

Rocky Mountain Power does have regular meetings when it looks to change its programs or update its tariffs. There is a stakeholder group that either convenes or receives information from the utility. They do have an opportunity under most circumstances, but not all, to provide comments.

There is a process for stakeholders to get engaged. We’re seeing more stakeholders engaging in the process.

Stakeholders also engage in the integrated resource planning. And then, of course, the legislature, I think. We see a lot of engagement in the policy space, if you will.

In 2016, [Utah] passed legislation called the Sustainable Transportation and Energy Plan, which allowed for some amortization of demand side management costs.

It also supported expansion of electric vehicle charging and some other initiatives as well.

I think we’re really working to be innovative in that space, to bring stakeholders in, to have the conversations – whether it’s with Dominion Energy, which is our natural gas supplier, or Rocky Mountain Power, which is our electric provider.

With our net metering matter, we could have just allowed that to be a fairly litigious process, but the governor made a decision that he wanted to use his convening authority to pull the parties together to negotiate a settlement – a glide path, if you will – that wouldn’t shock the solar industry.

In this case, we realized compensation that might be more reflective of cost.

I think Utah is unique. We tend to be kind of collaborative. That doesn’t mean we don’t have contention or discord. There is an effort to coordinate and see how we can create win-win outcomes when it comes to our energy ecosystem and across the board.  

We began implementing a commercial property-assessed clean energy (C-PACE) program through statute in 2013. It was a bit of an iterative process. We had one pilot program that came online in 2016.

We were having a difficult time bringing the commercial finance space and the commercial building space together to create the opportunity. We recognized challenges with the program – one of which was the bonding that was required.

We updated our legislation to allow for signable leans and we partnered with a development district where they’re going to move forward with a statewide C-PACE program. And we’re also going to move forward with a statewide C-PACE program. And that’s going to be much more effective.

We’ve now been able, over the last year, to work with Sustainable Resource Solutions (SRS) to create a platform for the third-party administrator. SRS is going to serve as the third-party administrator.

Municipalities and cities are going to opt into the program. To date, we have four cities that have opted in and are anticipating more going forward.

I think this is great news for Utah. In a state with relatively low energy costs, finding those pathways to realize greater energy efficiency and also looking for those cost-effective distributed resources and batteries – it’s really the full package.   

Note: Emma McDonald contributed research to this article.

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