Staff Report Item 17
Staff Report Item 17
TO: Ava Community Energy Board of Directors
FROM: Kelly Brezovec, Senior Director of Account Services SUBJECT: Solar Billing Plan Tariff Policy recommendations DATE: April 17, 2024
__________________________________________________________________ Recommendation
Approve a Resolution adopting a Solar Billing Plan (SBP) Tariff Policy for solar customers, also known as a Net Billing Tariff (NBT).
Background
Ava Community Energy regulatory staff has been tracking the NEM 2.0 successor tariff and presented on major developments at the December 2022 Board of Directors meeting. Staff returned to the September 2023 Board of Directors meeting to provide a history of the NEM tariffs and the Net Billing Tariff, and most recently the November 2023 Executive Committee meeting to introduce Ava’s planned proposal.
Net Billing Tariff (NBT) is the successor to NEM 2.0. Rather than receive the retail rate for generation that is exported to the grid, customers receive compensation at a new Avoided Cost Calculator (ACC) rate, also called the Energy Export Credit (EEC). The ACC is a tool used by the California Public Utility Commission (CPUC) to determine the value of onsite solar and other distributed energy resources. The ACC varies by the hour and the month. Spring and summer mid-day ACC compensation rates are the lowest while late summer early evening prices are the highest. ACC pricing is aligned with historic California Independent System Operator, or CAISO, energy demand and availability.
The policy proposed by the CPUC and adopted by PG&E includes an Avoided Cost Calculator Plus (ACC Plus) adder, in the form of a credit in cents per kilowatt-hour exported, which is available to residential SBP customers who interconnect from 2023 to 2027. The value for the ACC Plus adder will decrease by 20 percent annually over five years, as shown in the table Staff Report Item 17
below, until the adder reaches zero in 2028. The ACC Plus value applicable to a given customer will be based on the customer’s first calendar year of interconnection and will remain constant for a customer for nine years from the customer’s Permission to Operate (PTO) date.
The credit value is higher for low-income customers who are enrolled in the California Alternate Rates for Energy (CARE) and Family Electric Rate Assistance (FERA) programs or reside in a disadvantaged community or Indian Country. The ACC Plus does not apply to residential new construction that is required per State building code to install solar, as these are “involuntary” system installations. It also does not apply to non-residential customers. Note that the ACC Plus may also be referred to as the “Energy Export Bonus Credit.” Table 1: ACC Plus, or Energy Export Bonus Credits
Residential $/kWh Low Income
$/kWh
2023 $0.022 $0.090
2024 $0.018 $0.072
2025 $0.013 $0.054
2026 $0.009 $0.036
2027 $0.004 $0.018
Implementation Schedule
There are two groups of customers that will initially be eligible for SBP:
1. Customers that completed their self-generation application after April 14, 2023 will be automatically placed on SBP.
2. Customers that have completed 20 years on NEM 1.0, and eventually 20 years on NEM
2.0, will transition to SBP at their next PG&E delivery true-up.
Given the complexities of this new tariff, PG&E’s billing systems were not initially ready to bill on SBP, and SBP operations were delayed from an original start date of December 2023. PG&E just recently implemented SBP residential billing operations in April 2024 and plans to implement SBP commercial billing in June 2024. Ava will monitor PG&E’s implementation and begin transitioning customers to SBP for generation service when billing systems are ready. Ava staff will send notices to transitioning customers before their transition and host a webinar to review the new solar billing plan tariff policy before it is implemented. Existing NEM customers will remain on their current tariff until they have reached their 20-year legacy period.
For reference, Figure 1 depicts the movement from our existing NEM customers to the new Solar Billing Plan tariff, based on the 20-year legacy period. The majority of Ava’s current NEM customers will not transition to SBP until 2037 or later.
Staff Report Item 17
Figure 1: Charting Ava customers’ transition dates, NEM 1.0 and 2.0 to Solar Billing Plan Ava SBP Policy Proposal
Staff proposes to implement SBP, largely mirroring PG&E’s structure - with three major differences as listed below and followed by additional detail. Staff expect to launch SBP when the billing operations are built and tested to ensure customers have a smooth transition.
1. Solar + Storage Incentive Program
2. CARE/FERA export bonus credit
3. Peak hours export bonus credit
First, SBP lends itself to paired solar and storage installations, as the customer can use their own excess energy later in the evening. Ava staff is exploring program opportunities to provide customers with enhanced value from installing a battery to store their renewable, locally generated electricity based on the capacity of the battery installed. The program will provide benefits to Ava customers in the form of cost savings resulting from active battery management as well as upfront and ongoing capacity-based payments for use of battery storage. Program design is under development and is discussed in more detail in the April 17, 2024 staff report item “Solar and Storage Battery Program”.
Second, all SBP CARE/FERA Ava customers - including those transitioning from NEM 1.0 and
2.0, or those customers who were required to add solar to meet the California building code for new housing - will be eligible for a $0.01 per kWh Ava bonus credit for all exported energy. Note that this is on top of the Energy Export Credit Bonus that new installations will receive.
Third, all remaining SBP Ava customers, again, including those transitioning from NEM 1.0 and
2.0, or those customers who were required to add solar to meet the California building code for new housing and including non-residential customers - will be eligible for a $0.025 per kWh export bonus credit during the Ava peak hours of 3-8 pm, 7 days a week.
Staff proposes the Ava bonus structure will be in place for five years, from 2024 to 2029. In contrast with the IOU’s glidepath, this bonus structure is flat for five years, which allows Ava to learn more about customer installation patterns and behaviors under SBP and to develop our Staff Report Item 17
robust battery storage capacity-based incentive program. After 2029, Ava may step down or remove this bonus credit.
Table 2: Comparison between Energy Export Bonus and Ava Bonus Credit Energy Export Bonus
Credit
(SBP base plan)
Ava Bonus Credit -
CARE/FERA
(Proposed)
Ava Bonus Credit -
Peak Hours (Proposed)
Implementer PG&E
Ava
Ava Ava
Customer
Segment
Residential customers
with new voluntary solar
installation after April 14,
2023
All CARE/FERA SBP
customers
Residential, voluntary or
involuntary install, new
or transitioning from
NEM 1.0/2.0
All SBP customers,
non-CARE/FERA
Residential, commercial,
voluntary or involuntary
install, new or
transitioning from NEM
1.0/2.0
Timeframe Applies to customers
who install solar in the
first 5 years of the new
SBP program (2023-
2027); the rate is locked
in for 9 years
5 years (2024 – 2029);
Ava tariff will include a
provision to edit or
remove after the 5-year
period
5 years (2024 – 2029);
Ava tariff will include a
provision to edit or
remove after the 5-year
period
Structure - Value of credit goes
down by 20% each year
within the 5-year period
to incentivize going solar
sooner
- CARE/FERA
customers receive a
higher credit
- Flat credit for energy
exports at all hours
- On top of Energy
Export Bonus credit, if
applicable
- Flat credit for energy
exports between Ava
peak hours of 3-8 pm
- On top of Energy
Export Bonus credit, if
applicable
Amount Varied, from $0.004 to
$0.090 per kWh
$0.01 per kWh $0.025 per kWh (3-8
pm)
Fiscal Impact
With the Ava Peak Hours Bonus Credit scenario outlined above, non-CARE/FERA customers will receive an additional $20 in annual credits and CARE/FERA customers will receive an additional $45 in annual credits through the Ava CARE/FERA Bonus Credit.
Staff Report Item 17
Table 3: Estimated annual credits for excess generation
CARE/FERA,
new voluntary
installation
Non-CARE/FERA,
new voluntary
installation
CARE/FERA,
NEM transition
or mandatory
install
Non-CARE/FERA,
NEM transition or
mandatory install
Base SBP $481 $236 $167 $163
SBP + Ava
Bonus
Credit
$525 $257 $211 $184
The value for commercial, or non-residential, customers is not as meaningful to model, as system size and usage is highly variable.
Overall, five years of the Ava Bonus Credits will mean an additional $8.4M in customer credits provided to customers for solar production, with the bulk of those credits being applied to excess generation during the Ava peak demand period of 3-8 pm. The Ava Bonus Credits support agency interests in incentivizing peak energy reduction and helping our low-income customers.
Table 4: Annual Export Generation Costs under Solar Billing Plan Scenarios 2024 2025 2026 2027 2028 Total
Base SBP $4,579,619 $7,824,747 $12,228,903 $16,572,929 $20,394,958 $61,601,157 CARE/FERA $820,571 $1,396,707 $2,172,137 $2,926,022 $3,555,654 $10,871,091 Non-CARE/FERA $3,759,048 $6,428,040 $10,056,766 $13,646,907 $16,839,304 $50,730,066 SBP + Ava Bonus
Credit $5,227,403 $8,982,844 $13,898,276 $18,755,731 $23,099,998 $69,964,251 CARE/FERA $1,011,016 $1,736,504 $2,661,738 $3,565,624 $4,344,755 $13,319,637 Non-CARE/FERA $4,216,387 $7,246,339 $11,236,539 $15,190,107 $18,755,243 $56,644,615 As shown in Figure 1, existing NEM customers will transition to SBP each year, with 2,500 NEM customers transitioning to SBP by 2028. The estimated annual credits shown in Table 4 are based on these transitioning customers and estimated new SBP installations.
Next Steps
Following approval by Ava’s Board of Directors, staff will implement billing operations to issue customer bills on Solar Billing Plan, with the first bills expected in summer 2024. Customers that Staff Report Item 17
transition to SBP will receive communications via direct mail and email from Ava describing the new billing methodology, including information about contacting our customer support team and referencing our website and updated Frequently Asked Questions. Ava staff will also host a webinar before the Solar Billing Plan is implemented to review the updated solar policy with customers.
Attachments
A. A Resolution of the Board of Directors of Ava Community Energy Authority Authorizing the Adoption of the Solar Billing Plan Tariff Policy
B. Solar Billing Plan Tariff Policy
C. Presentation
Attachment Staff Report Item 17A
RESOLUTION NO. R-2024-XX
A RESOLUTION OF THE BOARD OF DIRECTORS
OF THE AVA COMMUNITY ENERGY AUTHORITY AUTHORIZING THE ADOPTION
OF THE SOLAR BILLING PLAN TARIFF POLICY
WHEREAS The Ava Community Energy Authority (“Ava”) was formed as a community choice aggregation agency (“CCA”) on December 1, 2016, Under the Joint Exercise of Power Act, California Government Code sections 6500 et seq., among the County of Alameda, and the Cities of Albany, Berkeley, Dublin, Emeryville, Fremont, Hayward, Livermore, Piedmont, Oakland, San Leandro, and Union City to study, promote, develop, conduct, operate, and manage energy-related climate change programs in all of the member jurisdictions. The cities of Newark and Pleasanton, located in Alameda County, along with the City of Tracy, located in San Joaquin County, were added as members of Ava and parties to the JPA in March of 2020. The city of Stockton, located in San Joaquin County was added as a member of Ava and party to the JPA in September of 2022. The city of Lathrop, located in San Joaquin County, was added as a member to Ava and party to the JPA in October of 2023. On October 24, 2023, the Authority legally adopted the name Ava Community Energy Authority, where it had previously used the name East Bay Community Energy Authority since its inception.
WHEREAS Ava desires to implement a tariff called the Solar Billing Plan for new solar installations that align compensation for excess generation with market and grid needs; and
WHEREAS Ava desires to retain Ava customers through the positive financial incentives of an Ava Bonus Credit structure; and
WHEREAS PG&E started to serve customers on the Solar Billing Plan in April 2024, and Ava prefers to reduce customer confusion by billing customers on the same tariff.
NOW, THEREFORE, THE BOARD OF DIRECTORS OF AVA COMMUNITY ENERGY AUTHORITY DOES HEREBY RESOLVE AS FOLLOWS:
Section 1. Adopt the Solar Billing Plan Tariff Policy, attached to the staff report associated with this resolution, establishing a new tariff for solar customers, subject to any minor revisions approved by Ava’s legal counsel.
ADOPTED AND APPROVED this 17th day of April, 2024.
Attachment Staff Report Item 17A
Jack Balch, Chair
ATTEST:
Adrian Bankhead, Clerk of the Board
Solar Billing Plan Tariff Policy
Policy Number:
Approval Date:
Agenda Item:
Approved by Resolution:
APPLICABILITY: This Solar Billing Plan (SBP) tariff is applicable to a customer (hereinafter “eligible customer generator” or “customer”) who uses an eligible Renewable Electrical Generation Facility, as defined in PG&E’s Electric Schedule Net Billing Tariff (NBT) or Virtual Net Billing Tariff (NBTV) (http://www.pge.com/tariffs).
This rate schedule is available on a first‐come, first‐served basis to customers who provide PG&E with a completed PG&E NBT Application and comply with all PG&E NBT requirements as described in PG&E Electric Schedule NBT or NBTV, including load aggregation generating/ aggregated accounts. Residential SBP customers must take service on the E-ELEC (ELECTRIC HOME) rate schedule; customers that qualify for PG&E’s NBTV tariff may take service on any open applicable time-of-use rate schedule. Non-Residential SBP customers may take service on any open applicable time-of-use rate schedule.
TARIFF COMPONENTS:
RATES: All rates charged under this schedule will be in accordance with the eligible customer generator’s otherwise‐applicable Ava rate schedule and Ava service plan (i.e. Bright Choice, or Renewable 100).
Compensation for energy exported to the grid will be based on the Solar Billing Plan Energy Export Credit values and applicable bonus credit values in accordance with this tariff, as described in section “SUPPLEMENTARY CREDITS.”
BILLING: Customers with SBP service will be billed as follows:
Energy the customer receives from Ava Community Energy will be billed at the retail rate of their otherwise-applicable Ava rate schedule and Ava service plan.
Overgeneration, or energy sent from the customer’s photovoltaic system to the grid, will be credited at the values indicated at <https://www.pge.com/energyexportcredit>, which are based on the Avoided Cost Calculator, also known as the Energy Export Credit values. Supplementary credits for energy exports may apply, as explained below.
ELIGIBLE RENEWABLE FACILITY: An eligible Renewable Electrical Generation Facility must operate within the capacity limits described in PG&E’s Electric Schedule NBT or NBTV, and must be located on the customer’s owned, leased, or rented premises, must be interconnected and operate in parallel with PG&E’s transmission and distribution systems, and should be intended primarily to offset part or all of the customer’s own electrical requirements.
SUPPLEMENTARY CREDITS:
ACC Plus, or Energy Export Bonus Credit
An Avoided Cost Calculator Plus (ACC Plus) adder, in the form of a credit in cents per kilowatt-hour exported, is available to residential SBP customers who interconnect from 2023 to 2027. The values for the ACC Plus adder will decrease by 20 percent annually over five years, as shown in the table below, until the adder reaches zero in 2028. The credit value is higher for low-income customers who are enrolled in the California Alternate Rates for Energy (CARE) or Family Electric Rate Assistance (FERA) programs or reside in a disadvantaged community or Indian Country. The ACC Plus value applicable to a given customer will be based on the customer’s first calendar year of interconnection and will remain constant for a customer for nine years from the customer’s Permission to Operate (PTO) date. The ACC Plus may also be referred to as the “Energy Export Bonus Credit.” The ACC Plus adder may be a discrete line on the customer’s utility bill. The ACC Plus adder will apply to all energy exports (kWh) to the grid. Unused credits will rollover to future bills.
Ava will receive customer ACC Plus eligibility characteristics from PG&E.
The ACC Plus is not available to:
(i). Customers transitioning from the NEM/NEM2 tariff to NBT tariff at the end of their legacy period; (ii). Customers who have purchased a building with an existing system (Change of Party Customers); (iii). Non-Residential Customers; and
(iv). Customers who are required to add solar (e.g., by California’s building code).
Table 1: ACC Plus, or Energy Export Bonus Credits
Interconnection Year Residential $/kWh Low Income $/kWh 2023 $0.022 $0.090
2024 $0.018 $0.072
2025 $0.013 $0.054
2026 $0.009 $0.036
2027 $0.004 $0.018
Ava Bonus Credit
All Ava SBP customers (including non-residential SBP customers and residential customers who are not eligible for ACC Plus) will also receive the appropriate Ava bonus credit until their final billing cycle in 2029. Ava may modify or remove the supplementary credits starting with the first billing cycle in 2030 and will update this tariff by December 31, 2029.
Table 2: Ava Bonus Credits
Non-CARE/FERA residential and
non-residential
CARE/FERA residential
Credit Amount $0.025 per kWh $0.01 per kWh
Time of Day to Apply Credit 3-8pm everyday 24 hours a day, every day The Ava Bonus Credit may be a discrete line on the customer’s utility bill. The Ava Bonus Credit will apply to energy exports (kWh) to the grid during the applicable hours. Unused credits will roll over to the next bill.
True-up and Cash-out
SBP customers will receive a statement in their monthly PG&E bills indicating any accrued charges for their usage during the current billing cycle. Customers who have accrued credits during previous billing cycles will see these credits applied against current charges. a) Monthly Settlement of Ava Charges/Credits:
SBP customers will receive a statement in their monthly PG&E bills indicating any accrued charges for their usage during the current billing cycle. Customers who have accrued credits during previous billing cycles will see these credits applied against current charges. Any remaining balance is due and must be paid during each monthly billing cycle.
b) Ava Cash‐Out:
During the April billing cycle of each year, all current Ava SBP customers with a cash-out credit balance of more than $100 will be offered a direct payment by check for this balance. Any cash-out credit balance will be determined as of the final date of the customer’s March‐ April billing cycle (i.e. the first bill period ending on or after April 1). Customers who participate in the Ava Cash‐Out or transfer process will have an equivalent credit removed from their SBP account balance at the time of check issuance or transfer. In the event that a customer’s credit balance is less than $100, such credits will continue to be tracked by Ava and will remain on the customer’s account for future use (i.e., reduction of future Ava charges).
NSC Provision, Applied to Cash-out
NET SURPLUS COMPENSATION (NSC): Pursuant to P.U. Code Sections 2827 (h)(3), this Special Condition was established to provide a NEM customer having Net Surplus Electricity (defined as all electricity generated by an eligible customer measured in kilowatt-hours over a Relevant Period that exceeds the amount of electricity consumed by that eligible customer), with Net Surplus Compensation for the Net Surplus Electricity. This benefit is extended to SBP customers pursuant to Decision (D). 22-12-056.
A SBP customer who has Net Surplus Electricity will be known as a Net Surplus Generator. a. NSC Applicability – All bundled Net Surplus Generators that satisfy the conditions in the Applicability Section of this tariff and take service under this rate schedule are eligible to receive NSC at the end of the Relevant Period, i.e. at the time of their true-up. This includes Net Surplus Generators on schedule NBTV and sub-schedules NBTA, NBT-S, NBT-EXP, NBT-PS and NBTEXP-OTR. An NBT-MT Net Surplus Generator is also eligible to receive NSC but only for the one or more generators at the same metered account eligible for billing treatment under Special Condition.
b. The NSC Rate – The NSC Rate is defined as the simple rolling average of PG&E’s default load aggregation point (DLAP) price from 7 a.m. to 5 p.m., for a 12-month period. Ava shall use the NSC Rate as the value of the electricity portion of its net surplus compensation rate. PG&E will calculate the NSC Rate each month. It will be effective on the first day of that month and Ava will use it in the NSC Calculation for any Net Surplus Generators with a Relevant Period completed in that month (True-Up Month).
c. Compensation applied for surplus generation - If the customer has net surplus electricity, the kilowatt hours of net surplus electricity will be debited from the customer’s account at a rate equal to PG&E’s average real world retail export compensation rates for all NBT customers in their service territory over the past 12 months. This reduces the credit amount by the approximate value of export credits already provided for the same surplus energy. The customer will then be credited at the NSC rate described in (b) above for the same number of kilowatt hours of net surplus electricity. Customers will receive their NSC annually in April following the “Ava Cash-Out" process outlined above.
Return to PG&E Bundled Service or Account Closure
Ava customers with SBP service may opt out and return to PG&E bundled service at any time.
Customers should be advised that PG&E will perform a true‐up of their account at the time of return to PG&E bundled service, and that PG&E’s standard terms for transitional rates apply to customer returns with less than a six‐month advance notice if they have been an Ava customer for 60 days or more.
If an Ava SBP customer opts out of the Ava program and returns to PG&E bundled service, or closes their account with PG&E, Ava will cash‐out any remaining generation credits on the account (using the approach detailed in the True-up and Cash-out section above) and mail a check to the billing address.
The $100 minimum for a check does not apply to closed or opted out customers.
PG&E SBP Services
Ava SBP customers are subject to the conditions and billing procedures of PG&E for their non-generation services, as described in PG&E’s Electric Schedule NBT and related PG&E tariff options addressing SBP service. Customers should be advised that while Ava settles out balances for generation, PG&E will continue to assess charges for delivery, transmission and other services.
Customers are encouraged to review PG&E’s most up‐to‐date NBT tariffs, which are available from PG&E.
Solar Billing Plan
Policy Proposal
Board of Directors meeting
April 17 , 2024
Attachment Staff Report Item 17C
1. Introduction
2. Base Solar Billing Plan
3. Proposed Ava SBP
4. Fiscal Impact – Customer
5. Fiscal Impact – Ava
6. Recommendation
Attachment Staff Report Item 17C
•
•
•
Introduction
Solar Billing Plan Refresher Eligibility and Timeline
•
•
▪
▪
▪
▪
Attachment Staff Report Item 17C
Base Solar Billing Plan:
CPUC/PG&E Glidepath
•
•
•
•
Attachment Staff Report Item 17C
Ava Solar Billing
Plan
Attachment Staff Report Item 17C
Solar + Storage
Incentive Program:
Capacity-Based
Battery Storage
Program
•••
Attachment Staff Report Item 17C
Proposed Ava Bonus Credits
•
•
•
•
•
•
Attachment Staff Report Item 17C
•
•
•
Ava Bonus
Credit Duration
Attachment Staff Report Item 17C
Customer Financial Impacts –
Annual Credits for Exports
Attachment Staff Report Item 17C
Ava Financial Impacts –
Credits Provided for Exports
Attachment Staff Report Item 17C
•
•
•
•
Summary of
Recommendations
Attachment Staff Report Item 17C
•
o
▪
o
▪
▪
▪
Next Steps
Attachment Staff Report Item 17C
Thank you!
Kelly Brezovec
Senior Director, Account Services
[email protected]
Attachment Staff Report Item 17C