The JEA board yesterday approved a new solar package that was put together by its staff on a very tight timeline despite a months-long stakeholder process. JEA is the largest municipal utility in Florida with about 450,000 customers. Here’s the good, the bad, and the ugly of JEA’s new solar initiatives.
The Good – significant utility scale additions, and batteries
JEA is planning to add another 250 megawatts (MW) of utility scale solar with a projected in-service date of 2020. The systems (five 50MW projects) will be on geographically dispersed JEA-owned land and the power procured through power purchase agreements with independent power producers. The solar additions will give JEA about 300MW of total utility scale solar, which is significant relative to its size. The additional utility-scale solar will make JEA a leader in Florida in solar development on a solar watts-per-customer basis – which is an apples to apples comparison of solar development by utilities across the state.
Utility scale solar is clean, plentiful, and as JEA staff has discovered – also dirt-cheap. It projects the levelized cost of the power purchase agreements to be the same as its current 3.25 cents per kilowatt hour (kWh) fuel rate costs. That’s great news for customers, as those low rates will be locked in long term. Additionally, the utility has introduced its SolarMax program that will allow large commercial customers to lock-in their energy rate at the projected solar power rate of 3.25-cents kWh rate – helping them meet sustainability goals.
The utility is also offering a 30% rebate on batteries of up to $2,000 to its customers. The utility expects 500 customers annually to take advantage of the offer and the program has a $1 million annual cap. In theory, JEA says that customers will be able to store excess energy produce by their system in their batteries and use it later in the day to offset their power use at the retail rate. It expects 4 MW of customer owned solar to be added annually. BUT, the devil is in the details.
The Bad – limiting customer solar choice
Here’s where things start heading south. JEA staff didn’t engage with stakeholders to determine if its plan is economically viable for new solar customers. It’s not clear if any meaningful analysis was done to determine the value proposition for new customers of the program. Existing net metering customers will remain on the retail rate for 20 years. The utility will drop the credit for providing power to the grid from its current retail rate of 10.5 cents to its fuel rate of 3.25 cents kWh effective March 31, 2018 for all new customers.
That’s right: JEA is operating under the primitive paradigm that customer-owned solar value is limited to avoided fuel costs. We reject that utility industry talking point – as it’s been clearly disproven by a number of reputable studies.
In adopting that position, JEA has potentially damaged the customer-owned solar market going forward. At the very least it has created great uncertainty in the customer-owned solar market by ending retail net metering for new rooftop customers. We all know how markets react to uncertainty. Additionally, this plan was sprung on the public and stakeholders only 48 hours prior to the JEA board vote. More on that in a minute.
Clearly, JEA is sending a draconian economic signal to push new solar customers on to batteries. This is an untested program in an area that has no mature battery market and questions remain, such as: 1) Did JEA adequately size the battery incentive to provide customer value? 2) Is the battery size contemplated by JEA adequate to allow customers to offset all of the systems excess power at the retail rate? 3) Ultimately, how will this impact the rooftop solar market – and solar jobs and the associated local economic development? Without going through a methodical process to answer those questions, JEA is needlessly endangering customer solar choice.
Moreover, new solar customers that try to size their system smaller to avoid the cost of batteries will find it almost impossible to match their system generation with onsite use for net metering. That’s because JEA will be metering in 15 minute intervals – so if customers don’t generate and consume power at effectively the same time – then the customer’s excess power gets a 3.25 cents credit instead of offsetting the retail rate at 10.5 cents. That violates the spirit, if not the letter, of the state’s net metering law.
The (Really) Ugly – beware of “stakeholder outreach”
The announcement of this new solar package blindsided stakeholders. There had been debate on the JEA net metering policy dating back to late 2015 – as JEA was approaching a self-imposed 10 MW cap on customer-owned systems. JEA proposed to reduce its retail net metering credit to 7.5 cents kWh – to the cost for power from existing utility scale solar. At that time, SACE encouraged JEA staff to undertake a value of solar study to identify all the economic benefits of customer-owed solar on its system, such as capacity value & ancillary benefits, but executives dismissed the notion.
Due to community opposition, JEA dropped its proposal and instead the board opted to wait on the voter’s decision on Amendment 1. Voters roundly rejected the anti-solar amendment in November 2016.
That’s when staff moved to conduct outreach to stakeholders for their recommendation on solar policy. SACE engaged in good faith in a multi-month stakeholder process over this summer on the net metering issue. The stakeholder group, which was comprised of a cross section of the Jacksonville area community, came to a very different proposal on net metering. The stakeholder group requested that JEA extend its current net metering policy until there was 25 MW of customer-owned solar on JEA’s system to allow for JEA staff and the stakeholders to dig in on a policy that would grow the market without injecting great uncertainty – like the one the JEA board approved yesterday.
The stakeholder recommendation was essentially ignored by JEA staff, and by the JEA board – at the urging of its staff. SACE engaged, as did other clean energy stakeholders in good faith, only to be ultimately blindsided by staff’s proposal. As a public power company, JEA should be leading on issues in support of customer choice, not holding customers back. An abrupt change to a popular solar program, without stakeholder input on the new plan, is the type of action one might expect from a private monopoly utility – not public power.
SACE is disappointed with JEA’s lack of community engagement on the new customer-owned solar plan. That said, we will do our part to help educate JEA customers on their options, but will be watching to see whether this proposal does indeed lead to a significant downturn in customer-owned solar development and will hold JEA accountable. After all, good solar policy is critical to moving our communities and state to a lower cost, lower risk, cleaner energy future.