An Ignoble Experiment

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With recent news accusing Arizona Public Service of trying to kill rooftop solar, Xcel Energy is also in the crosshairs and accused of attacking rooftop solar because of its desire to manipulate net metering for solar customers. Xcel is asking the Public Utilities Commission for permission to pay rates below market value to rooftop solar customers who feed electricity back into the grid. Xcel's proposal could undermine net metering policies by preventing consumers from receiving fair credit for energy they return back to the grid.

Boulder, Colorado. Credit: Hustvedt/Wikimedia Commons

Boulder residents want renewable energy sources, particularly solar, but last week's election results revealed that Xcel may not be able to remain Boulder consumers' only choice. On two separate votes related to Boulder's effort to create its own utility, pro-municipalization positions outpolled pro-Xcel positions 2:1, jeopardizing Xcel's monopoly status.

"These results demonstrate a clear public desire for more choice, local control and more renewable energy," said Meghan Nutting, Colorado representative of The Alliance for Solar Choice. "Coloradans know last century's fossil fuel status quo and a centralized monopoly doesn't work for a 21^st Century Colorado. We all should have the choice to produce our own power from the sun without being penalized. But Xcel wants to increase their monopoly over our power sources and eliminate this freedom."

Xcel's proposal to the PUC should not be surprising. Recent reports have revealed an anti-solar sentiment by the organization that represents investor-owned utilities across the country, Edison Electric Institute (EEI).

EEI's January 2013 report "Disruptive Challenges" warns that increased consumer adoption of distributed solar will lead to "declining utility revenues, increasing costs, and lower profitability potential, particularly over the long-term," and proposes efforts to eliminate or counter net metering, which is what Xcel is attempting to do.

Industry experts, including FERC Commissioner Jon Wellinghoff, warn that this mindset and the utility business model must change in order for utilities to survive.

Since being accused of anti-solar/net metering policies, and following the Arizona Corporation Commission's decision to change Arizona's current net metering policies, EEI has issued a statement touting "common sense net metering policies."

Edison Electric Institute (EEI) President Tom Kuhn issued the following statement today on the decision by the Arizona Corporation Commission (ACC) to reform Arizona's current net metering policies.

"… the commission recognized that current net metering policies unfairly shift costs from solar homes to non-solar homes and approved changes to begin reducing this growing cost shift. There are a number of state commissions currently reviewing outdated and unsustainable net metering policies. By adopting common sense reforms today, the ACC showed leadership in protecting electricity customers in Arizona, while also ensuring that solar has a bright future in the state and around the country," EEI President Tom Kuhn said in the statement.

The statement continues that "EEI and the electric power industry support the continued growth of solar…In order for solar to grow and to meet customer service expectations, we need a safe, reliable, and robust electric grid. The ACC decision today recognizes that it's only fair that everyone who uses the grid and benefits from its services should help pay to support it and keep it operating reliably at all times."

For more:
- see this EEI report

Read more about: Public Utilities Commission
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2. Exelon gaining competitive edge from creative data use

By Barbara Vergetis Lundin

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3. Solar PV capacity to double by 2020

Exelon Corporation has launched the first in a series of Innovation Expos aimed at bringing together employees and outside experts to explore innovative solutions to complex business problems, specifically, ways in which Exelon can create value by tapping into the ever-expanding field of "big data."

Credit: Exelon

Participants learned how companies are harvesting terabytes of data to learn more about their customers, drive innovation, and increase productivity and growth.

"The growing linkage between advanced technology and the creative use of data provides opportunities for Exelon to develop new energy products and services, operate our businesses more efficiently and better serve customers," said Sonny Garg, senior vice president and chief information and innovation officer for Exelon. "As the energy industry becomes increasingly competitive, events like this help Exelon gain an edge by identifying emerging technologies and adapting the best ideas from inside and outside the company."

A key element of big data involves harvesting and analyzing large data streams, looking for patterns and identifying ways to effectively exploit the information to make better business decisions. For example, deep data analysis is helping Exelon design more effective customer service systems, optimize maintenance practices, identify ways to reduce costs across the enterprise and develop products that help customers make smarter use of energy.

"Exelon is really two companies -- an energy company and a customer service company -- and underlying both of those are a lot of data sets," said Robert C. Wolcott, a senior lecturer at Northwestern University and a panelist at the event. "Leveraging these data and bringing employees together to drive innovation across the enterprise is critical to providing top-quality customer service and delivering reliable, clean energy."

For more:
- see this report

Related Article:
Exelon: From "Intelligent Grid" to "Smart Grid"

Read more about: Exelon, big data
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By Barbara Vergetis Lundin

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4. Renewable energy attracting investors

Despite decreasing government supportand high-profile bankruptcies, the solar photovoltaic (PV) market continues to grow. Technology costs have steadily declined and continue to do so. By the end of this decade, Navigant Research predicts that solar PV will be cost competitive with retail electricity prices in a significant portion of the world -- even without subsidies. In fact, annual installations of new solar PV capacity will more than double by 2020 -- from 35.9 GW in 2013 to 73.4 GW in 2020, according to Navigant.

Photovoltaic array at the National Solar Energy Center, Jacob Blaustein Institutes for Desert Research, in Israel's Negev Desert. Credit: David Shankbone/Wikimedia Commons

"Lower prices for solar PV modules are opening up new markets for distributed PV, while also helping the technology reach grid parity more quickly in high-cost retail electricity markets," said Dexter Gauntlett, senior research analyst with Navigant Research. "The Asia Pacific region is expected to be the leading regional market for solar PV installations throughout the forecast period, led by China, where more than 100 GW of solar PV will be deployed by 2020."

As the industry matures, the market will evolve in several ways. While installation types vary by region, Navigant expects a general shift toward non-distributed solar PV systems as a larger percentage of all solar PV installed capacity. Distributed systems will account for less than half of all installations in 2014, and non-distributed systems will represent more than half of the market through 2020, Navigant says.

For more:
- see this report

By Barbara Vergetis Lundin

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5. Alliant Energy gets approval for MGS siting

Merger and acquisition (M&A) activity in the North American power and utilities industry increased in the third quarter of 2013 on both a year-over-year and sequential quarter basis as dealmakers in the industry continue to consider opportunistic M&A to achieve strategic growth, according to PwC U.S.

The report notes there were 12 power and utilities transactions greater than $50 million in the third quarter of 2013, compared to seven deals in the previous quarter and eight during the third quarter of 2012. While volume increased, the total value of deals worth $50 million or more declined to $4.6 billion from $12.5 billion in the second quarter of 2013, largely due to one mega deal worth $10.4 billion in the second quarter. Excluding that deal, third quarter total value increased 115 percent over the second quarter's total of $2.1 billion.

Strategic investors accounted for 72 percent of deal value in the third quarter of 2013, according to the report, compared to 100 percent in the second quarter, as the sector increased financial investor activity.

There were three renewable power deals in the third quarter of 2013.

"We saw a notable rise in deal activity in the third quarter and expect that activity to continue in future quarters as the hunt for yield and rebalancing of portfolios continues," said Jeremy Fago, PwC's U.S. power & utilities deals leader. "Renewables continue to attract investors seeking stable, predictable cash flows and we expect the industry to continue its consolidation as thirst for yield and uncertainty around incentives remains."

For more:
- see this report

Read more about: mergers and acquisitions, M&A
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By Barbara Vergetis Lundin

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