Sunny side up
Solar mainstreamed by commission as part of utility’s rate settlement
The OG&E rate agreement the Corporation Commission recently approved is mainstreaming solargenerated power.
Recent regulatory actions and a review of data illuminates the fact that more solar-generated power likely will become part of your electricity mix in the future.
As part of a recent rate settlement with Oklahoma Gas and Electric Co., the Oklahoma Corporation Commission allowed the utility to transform a pilot program that helped finance construction costs for two solar power projects it has built into one that will be offered as part of a menu of potential power purchase plans customers can choose.
The solar tariff locks customers into paying a lower, set kilowatt-perhour amount for power they use during summer peak demand load periods, during hours when the solar plants are producing electricity.
While those customers are required to pay more than what standard residential and commercial tariff customers pay for power during nonpeak demand periods, they still typically save money.
The extra money they pay during nonpeak load periods and during the winter helps provide the utility with dollars it needs to build the solar farms.
They can choose the tariff option for amounts ranging from 10 to 50 percent of the power they use.
Officials also said the tariff option will allow the utility to gauge customers’ future interest in the technology, similar to how its Green Power Wind Rider tariff is used to gauge customers’ continued interest wind-produced energy.
Over time, the utility moved that tariff from being experimental to being a standard offering as costs to build, operate and include wind farms into the utility’s power producing portfolio fell.
Utility officials said this week they see the same trend with solar.
Donald Rowlett, managing director of regulatory affairs for utility parent OGE Corp., said strong customer interest “could move our use of solar from experimental into potentially one of high growth, depending upon that interest.”
Natural progression
Rowlett said utilities historically have balanced customers’ needs for electricity, or load, with the resources they have owned and operated.
Over time, regulators have required utilities to develop integrated resource plans that provide customers’ electricity at the most affordable costs that they can. Additionally, regulators have required utilities to also introduce demand reduction programs to reduce peak load levels. The utility’s SmartHours plan, which encourages customers to conserve electricity use during summer peak usage periods, is an example.
While wind-generated power has been around a while, OG&E only added solar-generated power to its resources recently.
More than two years ago, it built a 2.5 megawatt solar generating station at its Mustang Power Plant. Most customers who committed to paying solar tariffs for part of their power in offerings connected with that project were residential in nature, and kept their power usage commitments at smaller amounts.
At the end of March, the utility brought online a 10-megawatt solar plant it built at Covington, in northern Oklahoma.
Customers committing to solar tariffs for part of their power in offerings connected with that project included more who were commercial users.
Additionally, customers generally were willing to commit to paying the tariff for a larger percentage of the power they used, which utility officials said showed they were getting more comfortable with the technology. Rowlett said customers interested in the solar tariff typically want to consume renewable power but can’t because of rental or leasing agreements or the lack of available usable space for panels.
A bright way forward?
As OG&E ponders its solar future, numerous other developers are seeking to add a significant number of solar projects to the mix of generators who supply electricity to the Southwest Power Pool.
A check this week of the regional transmission organization’s interconnect queue, which identifies potential future power generation projects seeking approval to put power onto the grid, showed there are dozens of potential solar farms that could be built.
“Solar technology has been trending toward greater dependability and lower costs for years now,” Larry Nickell, the pool’s vice president of engineering, observed.
“The industry is also seeing the expiration of production tax credits for wind at the same time similar incentives are being offered to solar power, which has encouraged the development of solar generation and availability of solar power to markets like ours.
“All of this has created an environment in which we’re seeing far more solar energy in our generator interconnection queue than we have in the past,” he said.