Colorado PUC says utility fell short in Stapleton and Panasonic solar+storage tests
by Allen Best
In the staid world of utility regulation, Colorado’s largest electrical supplier recently got the verbal equivalent of a scolding by all three members of the Colorado Public Utilities Commission.
In various ways, the commissioners all told the Public Service Co., Xcel Energy’s Colorado subsidiary, that the utility didn’t seem to be taking seriously its job of helping reinvent the electrical grid of the future.
The reprimands were delivered in three cases involving solar plus storage and how they can be managed in microgrid applications.
The essential idea is that the relationship between utilities and consumers must evolve. In the old model, the utility delivered electricity from central generation, often a big, coal-fired power plant, and the customers turned on the switch and expected to get power.
In the evolving model, there’s more distributed generation, such as rooftop solar collectors, and demand is negotiable. You might not charge your car until there’s excess power. Storage in the form of batteries lies in the middle of this more complex relationship.
“The world is changing, and we need a utility that changes quickly,” said Jeffrey Ackermann, the PUC chairman, at the commission’s weekly meeting on Sept. 23.
Ackermann went on to identify the robust but still emerging area of “consumer-choice opportunities, all these things that kind of make the utility uncomfortable but part of which the future is clamoring for.”
This is from the Oct. 16, 2020, issue of Big Pivots. To get on the mailing list for this e-magazine, go to BigPivots.com
John Gavan, another PUC commissioner, upbraided Xcel, saying it won’t be just about selling kilowatt-hours in the future. It will “increasingly be about solutions as the utility industry rapidly transforms,” he said, borrowing a key message that Amory Lovins, co-founder of the Rocky Mountain Institute, has been delivering for decades.
Gavan added that third-party software and hardware solutions will have to be integrated, which will require the utilities to develop system integration skills, as have other industries.
This has happened before. “In the 1980s, I watched as AT&T struggled through this same kind of challenge, and they didn’t do so well,” said Gavan, who had a career that included director of information technology for MCI Communications for 19 years.
“There are lots of lessons out there. I urge Public Service Co. at the highest level to carefully think through these issues that will make the changes internally that will allow them to be successful in this emerging business segment.”
The PUC in 2016 had authorized Xcel Energy’s subsidiary to spend $9.1 million in two projects, one of them in conjunction with Panasonic and other partners in a complex of buildings near Peña Station, the last commuter rail stop on the way to Denver International Airport.
Xcel installed solar collectors atop a large field of parking adjacent to the Panasonic building. The project has the capacity to be a microgrid, capable of being operated as part of the regional grid or separately. Battery storage is part of the configuration.
The second project was at the neighborhood formerly known as Stapleton, now called Central Park. It has a high concentration of solar collectors on roofs, more than 20% in some areas. A 2016 release from the PUC explained that Xcel planned to install six batteries on the customer side of the meter at solar-equipped residences. Another six batteries were to be installed on Xcel’s distribution lines. These utility-sited batteries were to store excess energy and discharge it during peak load hours.
Both projects seek to understand the potential for energy storage to help Xcel manage the impact of high penetrations of solar photovoltaic energy in neighborhood electrical lines. In addition, the company also planned to evaluate the capabilities of batteries installed on distribution feeder lines to regulate voltage, reduce peak demand, and reduce energy costs for the benefit of all the company’s customers.
In a 2015 filing with the PUC, Alice Jackson, then a regional vice president for Xcel in Colorado, explained that the company’s innovative clean technology program was intended to provide the company with opportunities to gain experience with new distributed energy technologies that “will benefit our customers in the long run.”
Already, in some areas of Xcel service territory, the concentration of rooftop solar “is causing a two-way electricity flow on our system,” she explained. “This has challenged us to try to find new ways of accommodating distributed solar generation while maintaining the same levels of safety and reliability that our customers have enjoyed for years.”
Jackson went on to say that in addition to finding new ways to forecast wind and solar, “we know that the installation of batteries on the distribution system provides a potential solution to the adverse effect that high penetrations of distributed solar can have on our distribution system. For this reason, we believe the time is right to work to gain operational expertise with batteries and to test various battery configurations to understand the impact and benefits this technology will have for our system,” Jackson said.
“The company believes understanding how battery integration on our system both on the grid itself and on the customer side of the meter will be critical to ensuring that we can efficiently and effectively design and operate our distribution system as batteries enter the market place.”
In July 2020, Xcel filed its “Final and Comprehensive Report on the Panasonic and Stapleton Pilot projects under the Innovative Clean Technology Program.” Dan Greenberg, a PUC staffer, told the commissioners at their Sept. 23 meeting that the final report “offers minimal insights.”
“Of the original project objectives, how many objectives would you say were successfully met,” asked Megan Gilman, the third PUC commissioner and a former owner of a solar retail company in Eagle County.
Of the 17 objectives, replied Greenberg, 6 were unequivocally successful, another 6 were partially successful, and the remaining 5 had no useful data. There were problems with equipment of mostly a trivial nature that prevented the projects from delivering more meaningful results, he explained.
The question before the commissioners is how much of the cost recovery to allow the company of this research.
“The project was not entirely successful and satisfying,” said Gilman, but she said she did not want to take action that would discourage Xcel from continuing its work to help create the grid of the future.
One question before the PUC and the utilities it regulates is what constitutes the optimal integration of batteries. Another related question, said Gilman, is “what do we see as an ideal mix of rooftop and utility scale solar?”
The broader question before the Colorado PUC is this new interface of utilities and consumers, something that loosely falls under the umbrella of a concept called distribution network planning. While a 2019 Colorado law gave the PUC direction to conduct investigation of this topic, it does not provide precise direction of what this new future will look like.
For a full explanation of this wonkish but cutting-edge concept called distribution network planning, see this story.
The PUC has inadequate staffing to investigate this fully. Under prodding from Ackermann, Gilman wondered whether new legislation will be needed to help assist and guide the PUC. Gavan said it was important to remember that “market forces are very much at work here as well,” pointing to a rapidly growing number of solar-plus-storage systems. “It’s not just policy but market forces,” he said.
Solar-plus-storage was also the center- piece of a separate case that also elicited frowns from the PUC members. In that case, Xcel was required to consult with stakeholders about incentives. Meetings were held but not all who were involved though them as as productive they needed to be. Gilman described the report that Xcel produced as “fairly generic.”
The Colorado Solar and Storage Association wanted the PUC to reverse itself on a decision the PUC members had made. The commissioners agreed they could not do so but made clear that they were sympathetic to the trade group’s motivations. As such, the commissioners said, they agreed to make it clear to Xcel of their serious intent.
Call it a slap, not a hard whack, to the knuckles of Colorado’s giant utility.
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