Oregon Solar Bill Creates Industry Conflict

Oregon may be developing into an interesting test case in the tug of war between utility-owned solar and customer-owned solar. HB 3039, a solar bill which passed the House of Representatives by a vote of 47 to 11 last week, takes on many of the issues that will be decided throughout the U.S. in the coming years.

The bill in its current form appears to create two distinct programs. The first program, supported by the Oregon Solar Energy Industries Association (OSEIA), lets utilities install an unlimited amount of solar anywhere in their service territories, recover all costs and make a profit. It also creates a net-metering program for customer owned systems, gives the Renewable Energy Certificates (RECs) to the utilities and allows them to use a 2-for-1 multiplier on each REC to reduce their RPS requirement.

Supporters say this will encourage utility involvement and rapidly expand the amount of solar installed in the state. However, many Oregon stakeholders have written and spoken in opposition to parts of this program.

The second program creates a 25-MW feed-in tariff for a customer-side program, but also grants ownership of RECs to the utilities. This program is supported in large part by many stakeholders.

Oregon’s solar industry is split on the merits of the bill. The OSEIA Board of Directors has championed HB 3039. However, many members of the organization believe it treats solar customers unfairly by automatically giving utilities the generated RECs.

Last weekend, OSEIA members overwhelmingly voted to make changes to the bill. There are now questions about which version the organization will support: The original one supported by the board, or the one with expected changes.

The objections from OSEIA members include:

1. The loss of the REC ownership by system owners.
2. A 2-to-1 multiplier on the RECs for the electric companies that will effectively reduce utility obligations under the state’s 25% renewable portfolio standard (RPS).
3. A cost-recovery and profit scheme for the electric companies that some people say could allow recovery of excessive dollar amounts.
4.The ability for the electric companies to get a 6- to 10-month head start on the solar program before other participants.

Some members are concerned that there was excessive utility involvement in crafting the bill language, without proper consultation with the industry.

In order to resolve the conflict over language, a group of stakeholders held a working session last week that included some of OSEIA’s board and members as well as Oregon’s other major electric company, PGE. According to some solar industry participants, the working group’s proposed amendments create a framework that is friendlier to the solar industry and utility customers.

The amendments include:

1. The return of REC ownership to the system owner.
2. The removal of the 2-for-1 multiplier and a return to the 25% by 2025 RPS.
3. A pilot electric company program that is 20 to 25 MW and that allows electric companies to locate 500-kW to 5-MW systems on their property or their customer’s property on the electric company side of the meter.
4. A pilot 25-MW feed-in tariff program with a 15-year payment stream with a payment rate set by the Public Utility Commission (PUC).
5. Reduces the electric companies’ ability to recapture some costs.
6. Give all program participants the same start date for the program.
7. Allows the PUC to expand the pilot programs.

The amendments now need to be reviewed by the membership. However, OSEIA’s leadership has not agreed to let membership vote on the amendments. This has caused a lot of tension between the board and members.

Oregon stakeholders are now left wondering if a true coalition can be formed around a solar bill that will benefit solar companies, solar customers and utilities.

The outcome could have an impact on how utility-customer relationships are established within solar programs in other states.

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