Please take a moment to file comments on the California Energy Commission’s final workshop on feed-in tariffs that was held December 1, 2008.
While detailed comments are always helpful to the CEC staff, it’s more important that you file at least some comments. They could be in the form of a simple letter stating your principal concerns, requirements, or objectives. Details of how to do so are given below. You have until December 10, 2008.
CEC’s Most Important Finding
The CEC staff and the presiding Commissioners have recommended that California implement a system of feed-in tariffs for projects up to 20 MW in size and that the tariffs be differentiated by technology and that the price for each technology be determined by the cost of generation plus a reasonable profit.
This is a groundbreaking development in the United States. Thus, it is important that you file comments supporting this decision, with the caveats noted below.
Most importantly, note that you support setting the tariffs based on the cost of generation plus a reasonable profit. This moves us away from the debilitating effect of the MPR.
The CEC has now held four workshops on feed-in tariffs. Documents on the final workshop can be found at http://www.energy.ca.gov/portfolio/documents/index.html#120108
Written comments on the final report must be received December 10, 2008. Include the docket numbers No. 09-IEP-1G and No. 03-RPS-1078 and indicate 2009 IEPR – Feed-in Tariffs in the subject line or first paragraph of your comments. Please hand-deliver or mail an original.
If the original is more than 20 pages, please also provide 35 paper copies to:
California Energy Commission
Dockets Office, MS-4
Re: Docket No. 09-IEP-1G and No. 03-RPS-1078
1516 Ninth Street
Sacramento, CA 95814-5512
The Energy Commission encourages comments by e-mail. Please include your name or organization in the name of the file. Those submitting comments by electronic mail should provide them in either Microsoft Word format or as a Portable Document File (PDF) to email@example.com. One paper copy must also be sent to the Energy Commission’s Docket Unit.
All written materials relating to this workshop will be filed with the Dockets Unit and become part of the public record in this proceeding.
Content of Comments
Though the CEC staff and their consultants have attempted to be as thorough as possible they have made several oversights. While it behooves all supporters of feed-in tariffs to compliment the CEC on their work, there is room for improvement.
- Project size limit of 20 MW. There is really no good case for limiting project size to only 20 MW. The final report overlooks the fact that the Spanish fixed-tariff program, as opposed to the bonus tariff program, limits projects to 50 MW. Limiting projects to only 20 MW will not enable most wind projects or concentrating solar power plants that are typically much larger than 20 MW. The project size limit should be lifted to 200 MW and certainly no less than 50 MW.
- Contract terms should be no less than 20 years. Shorter contracts require higher tariffs and lead to sticker shock that deters public servants from setting realistic prices. Longer terms allow lower tariffs. Shorter terms lead to higher tariffs and greater resistance to setting a fair price.
- Inflation protection. The final report incorrectly characterizes the inflation protection in the French and Spanish system as a means to compensate for increases in the cost of operations and maintenance. This is not the case. Inflation protection is designed for protecting capital at risk. If there is insufficient inflation protection then the tariff must be higher to compensate investors for the risk of long-term (20-year) revenue streams. The characterization of protection against increases in the cost of operations and maintenance is true for Ontario. The province set the inflation protection low (20%) in part for political reasons and in part because they did not understand how the French and Spanish systems work.
- There is insufficient attention in the documents to the French system of differentiated tariffs for wind energy or the proposed variation in Ontario, Canada. More worrisome is that the summary documents refer to tariff differentiation by technology and size, but not by resource intensity. The latter is an absolute necessity for wind energy, especially development by farmers and community groups who can’t migrate to the windy passes.
- Degression is mentioned frequently in the report and the use of this term implies that the cost of generation always declines from one year to the next. This is not the case as illustrated by the 2009 tariffs for wind energy in Germany. Degression should be use only sparingly if at all.