Xcel Energy has agreed to a $32.8 million three-year spending plan for low-income projects that includes more access to community solar gardens and a first-time battery storage incentive, in a settlement hailed as a rare consensus by environmental groups and consumer advocates.
The Renewable Energy Plan describes how Xcel will issue electric bill credits for community solar gardens and storage projects, drawing on a 1% fee Colorado customers pay on their energy bills. Environmental advocates say the settlement, which still needs final approval from the Public Utilities Commission, includes millions of new dollars to improve marketing of renewable options with low income and disproportionately impacted communities.
“It finally recognizes the inequity, and it’s able to start to recognize the narrative of involving disproportionately impacted communities” in clean energy programs, said Renee Millard Chacon, who helped work on the settlement for the coalition that included her organization, Womxn from the Mountain. “They shouldn’t have to be forced by settlement. But now I’m hoping that moving forward they can have this type of awareness ingrained” in renewable energy development, she said.
“This was a big pivot for these plans to be much more focused on equity,” said Michael Hiatt, an Earthjustice attorney who represented the coalition members in the settlement negotiations. “I think this represents a big step forward for Xcel, we are excited to join this settlement with them.”
The renewable plan is Xcel’s customer-facing program and provides credits for owners’ rooftop solar installations, community solar panels built by third parties, and now battery storage credits for homes and businesses, Hiatt said. Xcel’s renewable program for previous years took periodic criticism for failing to bid enough community solar sites and for failing to reach lower income residents who could qualify for community solar credits.
The settlement is also supported by the state’s utility consumer advocate, the Colorado Energy Office, the solar industry trade group, and more, Xcel said in testimony to the PUC.
Under the proposed settlement, Hiatt said, the 2022-25 plan would boost:
- Overall spending on the programs, providing opportunities for electric bill credits to more people and adding incentives for battery storage. (Battery storage allows solar panel owners to build up reserves at peak sun hours, then relieve pressure on the grid by using the energy when the panels aren’t generating. Xcel has the right to draw on the batteries to support the grid.)
- Stakeholder involvement in the ongoing design and promotion of the credit programs, through continued oversight and input of environmental justice groups and nonprofit advocates.
- Increased spending on outreach to disadvantaged communities that could benefit from the electric bill credits. The plan will involve more experts in designing the outreach to be multilingual and more effectively targeted to neighborhoods.
“Lower income customers historically have not had equitable access to programs that have been funded by that pot of money,” Hiatt said, “but now there’s a time to rectify that.”
The settlement keeps the renewable fund fee charged on customers’ bills at 1%, though some advocates had pushed for a higher fee to support more programs.
On battery storage, Xcel will pay upfront incentives of $500 per kilowatt hour of battery capacity for homes and small businesses, up to 50% of the project cost. For income-qualified customers, or those from disproportionately impacted communities, the incentive is $800 per kilowatt hour, up to 75% of the project cost.
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The settlement also includes changes to how Xcel will work with outside solar panel builders to help fund community solar gardens not built by the utility itself. Private solar builders have argued that past renewable energy plans didn’t pan out because of how Xcel restricted the bidding process and subsidies from the publicly funded renewable pool.
The new settlement says Xcel has committed to a target of 300 megawatts of community solar garden capacity with up to $52.6 million in annual costs through 2025, according to the PUC testimony from Xcel executive Jack Ihle.
Community solar gardens allow residents who can’t put solar panels on their homes or apartments to participate in clean energy programs by signing up with a developer, which acquires land for a panel array of 5 to 10 megawatts. Those who sign up get an electricity credit on their Xcel bill, and low-income residents can get a full subsidy paid for by the renewable energy fund charged to each utility bill in Colorado.
“The company views it as an incredible example of success that we were able to bridge these diverse perspectives and engage in meaningful dialogue and collaboration with all parties to develop a reasonable path forward for this program,” Ihle said.