Long Island muni proposes new compensation scheme for C&I solar

Dive Brief:

The Long Island Power Authority is proposing a new compensation structure for commercial facilities with solar generation, following on changes made by investor-owned utilities earlier this year. If approved by the utility's Board of Trustees, the changes would take effect Jan. 1, 2018. The proposal would impact only commercial customers, not residential, and generation that is already interconnected would be grandfathered in for 20 years.
State regulators in March approved changes for regulated utilities, taking a first step towards a "Value Stack" pricing mechanism that would utilize more granular valuation and compensation for distributed generation.
LIPA is also proposing two other changes, including a measure to to provide for incremental undergrounding of transmission and distribution lines when requested by a municipality.

Dive Insight:

LIPA is a municipal utility, not regulated by the Public Service Commission, but it is nonetheless following the lead set by regulators and investor-owned utilities earlier this year.

The utility is proposing to make three changes to its tariff that will be effective at the beginning of next year, but the value of solar news is the most significant. The shift will include a methodology based on avoided utility costs and distributed energy resource values that takes into account a range of factors, including components for wholesale energy values, distribution system values and environmental values.

Two other changes would tackle undergrounding power lines at the request of a municipality, and tariff modifications to remove remote metering charges because advanced metering infrastructure is being implemented across its system.

The IOU tariff changes, on which LIPA's proposals are based, followed a PSC staff report from last October analyzing how to best integrate distributed resources into the grid. Regulators directed investor owned utilities to develop locational DER pricing that reflects the components of the Value Stack.

The statewide shift away from net metering will be a process. The PSC will in the future issue an additional order to improve the Value Stack and more precisely identify energy-related costs and values of DERs.