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Minnesota’s Public Utilities Commission approves new community solar option for Xcel customers

Solar panels on a city rooftopLast week, the Minnesota Public Utilities Commission (PUC) signaled its approval of Xcel’s new community solar program rate and rules. The PUC also required multiple improvements to the program—as requested by Fresh Energy and other community solar stakeholders.

Background

Xcel was required to develop a community solar program under legislation adopted in 2013 to help meet the state’s new goal of 10 percent solar by 2030. Minnesota is one of the first states, after Colorado, to require this type of utility program, which will provide subscribers a monthly bill credit for each kilowatt-hour generated by their portion of the solar project.

With the PUC’s decision, community solar projects within Xcel’s service territory can now move forward with new certainty about subscriber rates and program rules and timelines. Community solar projects have already been announced in Hennepin, Washington, and Chisago counties, with more expected in the coming months.

Subscriber rates

The Commission directed Xcel Energy to compensate project subscribers according to each subscriber’s applicable retail rate over the course of a 25-year subscription.

  • For residential customers, the bill-credit rate will start at approximately 14 or 15 cents per kilowatt-hour (depending on the project size).
  • For non-residential customers with a demand meter, the bill-credit rate will start at approximately 11.5 or 12.5 cents per kilowatt-hour (again, depending on the project size).

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In both cases, the bill-credit rate will increase over time to track increases in the utility’s retail rate. These numbers assume that the project transfers its renewable energy credits (or RECs) to Xcel. There’s also a separate rate for small general service customers (e.g., neighborhood-scale commercial and nonprofit customers). See here for more detailed information on available subscriber rates.

The PUC also asked stakeholders to submit additional information by October 1, 2014 on the rates that would “reasonably allow for the creation, financing, and accessibility” of community solar projects. Xcel will then file an updated value of solar rate (reflecting the true value of solar power to the utility, its ratepayers, and society) by March 1, 2015 for evaluation by the PUC. This information will allow the PUC to refine and improve the program’s rate structure in subsequent years.

Program rules and timelines

The PUC made important modifications to the program rules that Xcel originally proposed. For example, it made clear that multiple community solar projects can be sited on a single parcel of land. This is expected to allow more project flexibility and lower costs. The PUC also required Xcel to work with other stakeholders to identify remaining issues with the program rules—such as subscriber limitations for large entities with multiple sites—and develop proposed solutions for PUC review.

What comes next? The PUC will soon publish its decision in written form, after which Xcel will likely be allowed 10 days to modify and re-file its regulatory documents. Assuming that no parties object, the PUC will then formally approve Xcel’s documents. Under the governing statute, Xcel will then have 90 days to begin accepting project applications and 180 days to begin crediting subscriber accounts.

Photo: Sundial Solar

Last week, the Minnesota Public Utilities Commission signaled its approval of Xcel’s new community solar program rate and rules. It also required multiple improvements to the program—as requested by Fresh Energy and other community solar stakeholders.

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