YVEA board votes to reduce renewable energy connection sizes per meter

Yampa Valley Electric Association CEO Steve Johnson, left front, discusses a point during the YVEA board of directors meeting on Nov. 22, 2022.
Suzie Romig/Steamboat Pilot & Today

During the November board meeting of Yampa Valley Electric Association, the nine-member board of directors voted unanimously to reduce the maximum allowable size for residential and commercial net-metering for renewable energy systems connected to the local grid.

Amid increased interest from members for net-metering for residential, commercial and irrigation solar-powered systems, the YVEA board decided to reduce the previous strong incentives that were approved in 2014.

Net-metering allows residential and commercial customers who generate electricity from solar, wind or hydro power to sell the electricity they produce, but are not using, back to the grid, according to the Solar Energy Industries Association. Through YVEA, members who have a solar energy system tied to the grid often produce excess during the longer days of sunny months and can bank that credit to balance lower production during the shorter, cloudier days in winter. That YVEA net-metering process trues up annually in March, and any excess production is paid back at the 3.4 cent wholesale rate per kilowatt-hour compared to the 10 cent base retail purchase rate for electricity.

The YVEA policy previously allowed net-metering for up to 120% of the member’s previous year kilowatt-hour usage per service location with a maximum instantaneous output of 25 kilowatts for residential installs and 150 kilowatts for commercial. With the current changes, that net-metering maximum size per meter will be reduced by 60% for residential to 10 kilowatts and reduced by approximately 83% to 25 kilowatts for commercial. Essentially, that reduces the level of renewable energy that can be produced per meter and complicates the economic viability of solar installs needed above the size caps, solar advocates say.

The updated policy removes the 120% allowance and adds the option for irrigation systems, which has been a request by members, YVEA officials noted.

“Currently, we are one of three co-ops in Colorado who allowed for higher net-metering limits,” explained YVEA CEO Steve Johnson. “The vast majority of co-ops in Colorado align themselves with their power contracts by offering the minimum allowance under the state statutes.”

Johnson noted in a news release after the board meeting that the change is meant to “create equity amongst future net-metering members” and “can allow more members to put net-metering on their homes without triggering potential system upgrades.” As more solar installs are connected to the local grid, some system upgrades may be required in some locations. Members who request net-metering later in time at that location are responsible for upgrade costs as needed.

“When we have net-metering it does create distribution system challenges, so we would need upgrades such as a transformer upsize or resized,” Johnson said.

According to YVEA, the member-owned co-op instituted a net-metering policy in 2008 and increased the size allowances in 2014 “to incentivize early adopters of net-metering to meet state distributed-generation goals.”

Mike Kruger, president of the Colorado Solar & Storage Association, noted that both Xcel Energy, the majority wholesale electricity provider for YVEA, and Black Hills Energy, which serves parts of southern Colorado, have approved a 200% usage cap instead of hard caps on the size of net-metered installations.

“There are other more forward-leaning ways to address these issues than reverting to the absolute minimum that the state requires,” Kruger noted. “It definitely is quite restrictive for commercial and industry. It’s definitely heading in the wrong direction.”

The COSSA director noted one option employed in other states is a small fee assessed on every renewable energy connection that then goes into a fund that pays for needed system upgrades.

During meeting public comments, former YVEA board member Sonja Macys noted that some entities such as the city of Steamboat Springs and Routt County have “identified as a concern” the lowering of size maximums. She said the 2014 policy that exceeded state requirements was something to be proud of and “forward-thinking.”

“That was a big, big deal, and the community responded very favorably to these increases in limits,” Macys said. She said lowering the limits will be seen as a “black eye” and “does feel like it’s moving backward.”

During public comments, Paul Bony, energy and transportation director for nonprofit Yampa Valley Sustainability Council, highlighted that three fundamental goals of the Routt County Climate Action Plan are removing barriers for clean energy generation within the county, supporting beneficial electrification and moving to 80% carbon-free electricity by 2030.

YVEA Board Member Scott McGill questioned whether additional system costs could be “spread around to all the people who cause it.”

“It’s simple the way we do it, but I don’t think that it’s fair to the last person,” McGill said.

Kruger said the reduction in net-metering allowances can hamper users who wish to switch to all electric-powered homes and electric vehicle charging to lower their dependance on fossil fuels as the electricity grid becomes increasingly cleaner.

“This limit of moving it down to 10 KW basically will guarantee that customers who do the right thing for the environment and their pocketbook will exceed that limit and have to buy electricity from the utility,” Kruger said. “If you want to pursue electrification goals, especially for heating and transportation, you should talk about percentage of use and not a max number.”

The updated YVEA policy for net-metering caps will take effect Jan. 1, with existing systems that are producing power grandfathered in under previous rules. New net-metering applications can be submitted by Dec. 31 under the previous higher caps if constructed and producing power by the end of 2023.

Following a member usage review, YVEA officials noted at present electric usage levels, the average residential member could offset their electricity usage with a 9-kilowatt system and average commercial customer with a 24-kilowatt system.

Within the YVEA territory, 54% of commercial solar arrays are larger than 25 kilowatts, according to Carly Davidson, YVEA public relations specialist. She noted that percentage “reflects that it has been the largest energy users who are participating in net-metering, for example, the airport, schools and governmental buildings.”

“(Net-metering size caps) definitely does affect the more fully electrified customers,” said Colin McCaulley, owner of Sunwise Solar in Steamboat, who has 11 years of solar install experience. “Many residential customers are desiring to go 100% electric with electric heat and electric vehicles. So, this is where we will see the biggest impact, I believe, in all-electric homes with EVs.”

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