LADWP approves solar feed-in tariff program
Originally published January 17, 2013
The Los Angeles Department of Water and Power Board of Water and Power Commissioners on Jan. 11 approved the first 100 megawatts of a 150-MW program designed to increase local solar power in Los Angeles.
The Solar Feed-in Tariff (FiT) Set Pricing Program will allow customers, solar companies and other third parties to develop solar or other eligible renewable energy projects within LADWP’s service territory and sell the power to LADWP at a set price for distribution on the city’s power grid, the utility said.
A proposal for an additional 50 MW FiT Program will be discussed with the board in March, rounding out the full 150-MW FiT program. The 100-MW program will begin as soon as Feb. 1 and continue through the end of 2016, the utility said.
"Today we took another major step forward in transitioning to a clean energy future for Los Angeles," said Mayor Antonio Villaraigosa. "I’m proud of the LADWP Board of Water and Power Commissioners for moving Los Angeles forward to become the largest city in the nation to offer a feed-in tariff solar program. The FiT program takes advantage of our abundant sunshine to spur new private sector investment that will create jobs and decrease our city’s reliance on dirty fossil fuels."
General Manager Ronald O. Nichols said expanding local solar power is an important part of the evolution of LADWP’s power supply from one heavily reliant on coal, to one with more energy efficiency and renewable energy balanced with natural gas. "LADWP is replacing over 70 percent of its existing energy supply over the next 15 years," said Nichols. "Local solar not only increases the level of renewable energy we provide to customers, but also helps maintain power reliability as we transition away from coal power."
LADWP will offer the first 20-MW allocation of solar power capacity during the first quarter of 2013. Subsequent 20-MW allocations will be made available every six months through 2016 until the full 100 MW is subscribed, the utility said.
Projects can range in size from 30 kilowatts to 3 MW and each allocation will set aside a prescribed amount of capacity for small projects (30 to 150 kW), the utility said.
LADWP will enter into a standard 20-year contract for each project and purchase the solar power at a set price, starting at 17 cents per kilowatt-hour for the first 20 MW. The price will decline under a tiered structure that caps the amount of power that can be reserved at each price. When each tier reaches its limit of reserve capacity, the price will be reduced by 1 cent per kWh and fall to the next tier.
"We learned from working with the business community, environmental leaders and solar industry representatives, and based on lessons learned from other FiT programs in California, that we needed to price the program to be successful," said Nichols. "If we did not buy solar locally through FiT, we would need to purchase other renewable energy from outside the city and bring it into Los Angeles to reach 25 percent renewables by 2016 and 33 percent by 2020."
LADWP opted to set the initial price higher than what it would pay for other renewables to ensure the program has a sufficient incentive to become solid and sustainable, the utility said.
The 100-MW program builds upon a FiT Demonstration Program that LADWP began last spring. "We started small, testing the market and making sure we have the best, most cost-effective system for the future," said Aram Benyamin, LADWP senior assistant general manager.—FALLON FORBUSH
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