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The road to understanding the LADWP's feed-in tariff plans

The LADWP proposes a
The LADWP proposes a "feed-in tariff" policy to put more solar on rooftops.
David McNew/Getty Images

Today’s talk in the LA City Council’s Energy and Environment committee underlined the absence of a ratepayer advocate in Department of Water and Power territory.

The council committee was discussing the idea of a “feed-in tariff.” (Terrible name.) It's a policy mechanism that lets people who own rooftop solar installations of a certain size to sell back energy those panels generate to the Department of Water and Power. It’s different from “net metering,” what we have with solar-topped homes right now, whose meters spin forward and back depending on use and generation. Renewable energy advocates and champions of solar power argue a feed-in tariff could help the U.S. get to grid parity faster: that’s a state where renewables are no more costly than their old-school counterparts.

Pushed in part by California's greenhouse gas reduction and renewable energy mandates, the DWP has begun to seek permission to enter into a sort of contract, a sort of "Standard Offer Power Purchase Agreement," with owners of solar projects that qualify for the feed in tariff policy. Last week, DWP board members heard about the pilot project to make this happen with a publicly-available PowerPoint presentation that’s still available on the DWP’s feed-in tariff website.

But that wasn’t good enough for Councilman Richard Alarcon, who grilled DWP chief Ron Nichols about the cost of renewable energy and the advisability of such a program. About the FiT, following DWP’s presentation and other council questions, Alarcon’s skepticism was nearly hostile. He compared the DWP’s plan to create a feed in tariff to a credit default swap…you know, the kind that brought this country’s economic institutions to their knees. “What you are locking us into is a swap deal and down the line we’re going to lose a lot of money, and I don’t hear a lot of answer to these questions,” Alarcon said.

Now, the mass of DWP materials IS uh, massive. (I'll go to my grave behind on that Sisyphean task.) With a major utility like the DWP, there’s always something new they’re doing to read and understand. Not to mention the work of academic institutions (like UCLA) that analyze the potential policies of the DWP; their studies do need study too.

At the same time, feed in tariff development has been a slow burn in LA. Almost six months ago, the Los Angeles Business Council proposed its own larger version of a FiT: 5 years, 150 MW of power. This same Energy and Environment Committee got a report on FiT back in April. Public workshops in the summer; In November, DWP went before council talking about AB 32 related programs, and a feed in tariff came up again.

Today, Alarcon objected to the potential pricing for the energy, the fact that the DWP wouldn’t say with deep certainty what would happen in such a pilot market, and the cost he imputed through rough math to other ratepayers. And he said the city council hadn’t heard enough about the DWP’s renewable energy strategy. “We have no idea where you’re going with this whole thing,” Alarcon said. “I’m not just talking about solar. I’m talking about the whole package.”

(The whole package, by the by, has been its own separate discussion. The utility’s Integrated Resource Plan spent six months in public workshops. They’re updating that plan AGAIN next year.)

Dozens of solar industry advocates showed up to comment on DWP’s FiT plans. The question and answer period for councilpeople, plus the 1-minute-per-person comment time on this issue, bumped a discussion about a plastic bag ban off the committee agenda today, and (it looks like right now) into city council tomorrow. As for FiT, the council committee today passed a motion essentially pushing a concrete move on this back 45 days.

Alarcon advocated slowing down the process in order to make sure that it was understood. Where the DWP’s concerned, he’s not the only LA city official who’s done that. So, sure, it’s a lot of information. Ratepayers who approved an advocate in March still don’t have anyone to digest it. And it seems a very open question what slowing down the process has contributed toward improving it.


CORRECTION, 9:54 P.M.: The second sentence in the second paragraph was clarified to explain that contractors under the Feed In Tariff policy will sell back all generated energy to DWP via purchase power agreements, unlike homeowners with rooftop solar who use and generate energy in a "net metering" system.