L.A. Establishes Feed-In Tariffs

By Published On: January 18, 2013

Solar project developers can reap 17 cents/kWh for selling power to the Los Angeles Department of Water & Power under the muni’s new feed-in tariff program. The plan authorizes up to 100 MW of new projects. It’s expected to be expanded in March to allow a total of 150 MW worth of development. Los Angeles Mayor Antonio Villaraigosa hailed the program. He stated Jan. 11 that it would “spur new private sector investment that will create jobs and decrease our city’s reliance on dirty fossil fuels.” LADWP general manager Ronald Nichols added that expanding local solar power helps the muni become less-reliant on coal and more able to depend upon energy efficiency and renewable energy balanced with natural gas. The utility is planning to end its 477 MW interest in the 2,250 MW coal-fired Navajo Generating Station in Arizona by 2015. It’s also exploring repowering a coal plant it gets power from in Utah to run on natural gas (Current, Oct. 12, 2012). The Los Angeles Business Council--a key proponent of the solar feed-in tariff--estimated it will create 4,500 jobs, spur $500 million in economic investment, and generate over $300 million in federal tax credits for Los Angeles businesses by 2016. The solar systems are likely to be installed on commercial, industrial, retail, and multifamily housing rooftops, according to the council. LADWP plans to offer the first 20 MW allocation of solar power capacity during the first quarter of 2013. Subsequent 20 MW allocations are due every six months through 2016 until the full 100 MW is subscribed. Projects can range in size from 30 kW to 3 MW. Each allocation is to set aside a prescribed amount of capacity for small projects between 30 to 150 kW. The program provides a standard 20-year contract for each project to purchase the solar power at a set price, starting at 17 cents/kWh for the first 20 MW. Then the price declines according to a tiered price 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 is to be reduced by 1 cent/kWh and fall to the next tier. The 100 MW program follows a demonstration effort by LADWP last spring to gain price discovery, test the program structure, and fine tune the processes and guidelines. “We started small, testing the market, and making sure we have the best, most cost-effective system for the future,” stated Aram Benyamin, LADWP senior assistant general manager for power.

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