On June 29, 2017, the Oregon Public Utility Commission (Oregon Commission) adopted rules to implement a community solar program as required by Senate Bill 1547. The community solar rules are far more limited than envisioned by the legislature, but may provide for a framework for a modest community solar program.
SB 1547 passed the 2016 Oregon legislature along with a wide range of new energy laws, including a doubling of the renewable portfolio standard, the gradual removal of coal costs from Oregon rates, expanded transportation electrification, and a requirement that the Oregon Commission adopt rules for a program to procure electricity from community solar projects.
The Oregon Commission’s community solar program rules include five main provisions.
First, limitations include: 1) a project must be located within the Oregon service territory of an electric company; and 2) a customer may only participate in projects located within its electric company’s service territory. This rule is narrower than the express language of SB 1547 that stated that a project may be located anywhere in the state. The Oregon Commission elected to disregard the legislative directive because of concerns regarding its jurisdictional authority over retail rates, and the Dormant Commerce Clause of the U.S. Constitution.
Second, participation requirements for owners of, or subscribers to, projects certified during the initial program capacity tier include: 1) a participant and its affiliates can own or subscribe to up to a total of four megawatts across multiple projects; and 2) a participant may own or subscribe to up to a total of two megawatts across multiple projects. Again, this rule is narrower than the express language of SB 1547, which allowed a customer to participate in any amount that does not exceed a potential owner or subscriber’s average annual consumption of electricity. The Oregon Commission explained that it adopted this limitation to promote diversity of customers and customer classes among participants and maintain the distinction between this and the direct access program. Oregon’s direct access program includes exit fees that make it cost prohibitive for most customers to participate, and the Oregon Commission did not want customers to avoid these exit fees by participating the community solar program.
Third, the program requires a minimum level of subscription, which mandate that 50 percent of the total capacity of a project be subscribed before the project can receive final certification. This minimum subscription of 50 percent was adopted to achieve a balance between allowing flexibility for developers and ensuring that projects are actually subscribed. Unsubscribed amounts can be sold under an as available rate to the utility.
Fourth, an initial program capacity tier for each electric company at 2.5 percent of the electric company’s 2016 system peak (approximately 160 megawatts of available capacity) was adopted. The Oregon Commission’s intention in setting this initial limit is to launch the program at a size large enough to sustain the initial administrative costs while also ensuring that the Commission will have the opportunity to adjust all aspects of the program before proceeding to any further expansion.
Fifth, the program requires low-income participation. SB 1547 requires that, as part of the program, the Oregon Commission determine a methodology by which 10 percent of the total generating capacity of the community solar projects operated under the program will be made available for use by low-income residential customers of electricity, and that the Oregon Commission periodically review and adjust this percentage.
Disclaimer
These materials are intended to as informational and are not to be considered legal advice or legal opinion, nor do they create a lawyer-client relationship. Information included about previous case results does not assure a similar future result.
