Frequently Asked Questions (FAQs)
How does this program compare with other renewable initiatives, such as solar on homes and businesses, Blue Sky, and Subscriber Solar?
In general, the community renewable energy program has the potential to drive greater renewable energy development than other options. Unlike solar on homes and businesses, the Community Renewable Energy Program won’t require upfront customer investment or financing. Unlike Blue Sky, Program resources will interconnect with and feed electricity directly into the Rocky Mountain Power electric system. Unlike Subscriber Solar, the Community Renewable Energy Program will scale up to serve all participating customers in participating communities and will be governed by a Board created by the Governance Agreement. Depending on how many customers decide to participate, it’s reasonable to expect that the Community Renewable Energy program could double the amount of utility-scale solar in Utah by 2030.
How did communities become eligible to participate, and why can’t other communities join after December 31, 2019?
The Community Renewable Energy Act (also known as House Bill 411) only applies to communities who are customers of Rocky Mountain Power that “adopt[ed] a resolution no later than December 31, 2019, that states a goal of achieving an amount equivalent to 100% of the annual electric energy supply for participating customers from a renewable energy resource by 2030.”
Twenty-three communities passed qualifying resolutions by December 31, 2019, and therefore became eligible to participate in the Community Renewable Energy Program. Unless the Community Renewable Energy Act is modified, no additional communities will be able to participate.
What is the deadline for eligible communities to sign the Governance Agreement and join the Agency?
For eligible communities who adopted a qualifying resolution by December 2019, the participation deadline is May 31st, 2022. The original deadline as shown in the Governance Agreement (also called the Interlocal Agreement) was January 31st, 2022, but the Community Renewable Energy Agency Board decided to allow more time for interested communities to join the program. The list of eligible communities is shown at the bottom of the Communities web page.
Who will actually own the program resources?
At this time we do not know who will own the program resources, which will be procured through a competitive bidding process. State regulations provide an option for Rocky Mountain Power to own or purchase program assets, if the Public Service Commission finds that including such an option is not contrary to the interest of participating customers and other customers. As such, it is possible that program resources could either be owned by third-party renewable energy developers or Rocky Mountain Power. See: Utah Admin. Code 746-314-402
How will costs be shared?
Apart from noticing costs (which are handled differently), the implementation costs are shared according to the population and electric consumption of each eligible community. Using this formula means that larger communities tend to pay more of the implementation cost and smaller communities tend to pay less. If eligible communities decide not to participate, the amount they would have paid toward the total implementation cost will be covered by a handful of volunteer “anchor communities.”
What does the estimated $700k implementation cost actually pay for?
The $700,000 program startup costs include the following estimates:
$300k for legal and technical consultants who will work for the communities;
$200k is for RMP program design and filing; and
$200k is for state regulators to contract third-party expertise to review the program.
Therefore, the $700,000 does not include noticing cost or costs associated with developing and bringing online any particular renewable energy generation resources. The costs associated with developing and bringing online any particular renewable energy generation resources will be integrated into the customer rate.
What has the agency done to estimate what the Program will cost for participating customers?
The Agency was formed on July 1, 2021 and is currently collecting Phase 1 contributions from participating communities. A budgeted portion of these funds will allow the Agency to engage an energy attorney and analytical consultants to help guide the Agency's negotiation with Rocky Mountain Power. That negotiation will define how the costs and benefits of Program resources will be calculated and allow the Agency and Rocky Mountain Power to estimate how much the Program will cost for residents and businesses to participate. The Agency selected a law firm on November 1st, 2021 and will open negotiations with Rocky Mountain Power this December 2021. The Agency hopes to provide eligible communities with cost estimates by Spring of 2022.
Will electricity costs go up for participating customers? How much?
In 2017, several of the participating communities published a study by Energy Strategies as part of a separate renewable energy effort. It found that under a net-100% renewable scenario “rates would be 9% to 14% higher in 2032 for the Communities, versus business-as-usual.” However, since 2017, solar prices have declined. For example, Rocky Mountain Power’s 2017 Integrated Resource Plan (IRP) assessed Utah solar to cost $51.39 per Megawatt-hour while the most recent 2021 IRP assesses Utah solar to cost only $38.28 per Megawatt-hour -- a nominal 25.5% drop. The Energy Strategies study also used other assumptions that will likely differ substantially from the Community Renewable Energy Program when it is implemented.
To guard against exorbitant rate increases, the Governance Agreement employs an "incremental rate impact" threshold of 10%. What this means is that if the Agency seeks to procure any resources that would raise the average Program rate 10% higher than Rocky Mountain Power's standard delivery service, then that procurement will require a two-thirds affirmative vote among all participating communities, and a second affirmative vote among communities who represent at least two-thirds of all participating electric load.This voting structure makes it unlikely that the average Program rate will exceed the average standard offer rate by more than 10%, unless there is widespread agreement among participating communities to do so.
Finally, a recent renewable energy procurement undertaken by three participating communities (Summit County, Park City, and Salt Lake City) to source governmental electricity consumption from renewable sources showed modest rate impacts. The Elektron Solar Project is an 80 MW solar farm to be built in Tooele County, Utah, that will be operational by the beginning of 2023. Salt Lake City estimated that, had the solar farm been online in 2019, its share of the solar farm's output would have totaled 90% of the electricity consumed by governmental operations that year, while only increasing electricity costs by under 2%.
If lots of customers decide to opt out of the Program when it begins, will that drive long term Program rates higher for customers who do participate?
No, it should not. As articulated in the Community Renewable Energy Act, the goal is to achieve “an amount equivalent to 100% of the annual electric energy supply for participating customers from a renewable energy resource by 2030.” Therefore, the Program should seek to acquire renewable resources in an amount that meets -- but does not exceed -- the amount of electricity being consumed by participating customers. As a result, the Agency does not anticipate that an initial reduction in customer participation will drive the long-term Program cost higher. Resource procurement can be incremental in order to avoid an excess of procured energy generation in relation to the number of participating customers.
How does this program compare to large renewable energy projects associated with Schedule 32 or Schedule 34 customers?
Today, only extremely large electricity customers like universities, major companies, or municipal governments qualify to procure utility-scale renewable energy sources through special rate tariffs like Schedule 32 and Schedule 34. The Community Renewable Energy program seeks to extend a similar utility-scale renewable energy procurement option to all customers, large and small, within in a participating community. The Board created by the Governance Agreement will issue requests for new renewable resources, evaluate potential rate impacts, and vote on whether to procure new renewable energy resources as described below.
How will voting work to procure new resources and what is the “incremental rate impact”?
The incremental rate impact, as described in the Governance Agreement, is an attempt to measure the cost differential between the Community Renewable Energy Program and Rocky Mountain Power’s “standard offer” that participating customers would otherwise pay. When the Board created by the Governance Agreement wants to procure a new renewable energy resource, it will analyze how much the new resource will cost in aggregate with all other program resources. If the incremental rate impact for participating customers is determined to be less than 10% (relative to the cost associated with “standard offer” service for those same customers) then procuring the new resource will only require a majority of participating communities and a majority of the participating electric load to vote “yes.” If the incremental rate impact is determined to be 10% or more, however, the threshold is much higher--requiring a supermajority of participating communities and a supermajority of participating electric load to vote “yes.”