Oregon PUC Sets Volumetric Incentive Rates (VIR)
for April 1, 2012 Solar Pilot Program Lottery

On the 13th of February, the Oregon Public Utility Commission signed into order the upcoming April 2012 price rates (VIRs) for the Solar Pilot Program. See the PUC website for OREP’s comments. Find the full Order, here.

In all previous enrollment periods (April 1st and October 1st of each year), capacity has been completely taken up in minutes, leading the PUC to drop the VIRs substantially (10% for October 2010 and 20% each for April and October 2011).  In October 2011, capacity was only partially taken up (43% in PGE territory and 88.5% in PacifiCorp territory). Now, for the first time, the Commission has adjusted some VIRs upwards for the next enrollment on April 1, 2012.

The recent VIR adjustments for the Small size category (under 10 kW) essentially followed the Automatic Rate Adjustment Mechanism (ARAM) established previously by the Commission to automatically increase or decrease the VIR depending on uptake in the previous enrollment period.

VIRs for projects under the Solar Pilot Program are differentiated by four Solar Zones (solar radiation levels) within the Small, Medium and Large project sizes (see table below). Rather than adjusting the VIR by utility to correct for the differences in uptake between utilities, the PUC looked at the root cause for the difference in uptake and made the rate adjustments by Solar Zone to better account for the variability in solar radiation levels.

Rates in Solar Zone 1 were raised by 10%, reflecting the low (43%) capacity uptake in PGE territory (which covers most of Solar Zone 1). Rates in Solar Zones 2, 3, and 4 were held steady reflecting the 88.5% uptake in PacifiCorp territory (which largely covers Zones 2, 3 and 4).  OREP had requested increases of 15% in Solar Zones 1 and 2 and 5% n Zones 3 and 4 to eliminate discrepancies in profitability between Solar Zones.  The PUC’s decision is a move towards making the viability/profitability of small systems more consistent between solar zones.

VIRs in the Medium size class (≥10 kW, and <100 kW) were dropped relative to the October 2011 values by 10% in Solar Zone 1 and by 20% in Solar Zones 2, 3, and 4 (Note that the October 2011 values were never used, as Medium capacity was allocated by competitive bid).  In all Solar Zones, 90 to 100% of the available Medium size capacity in October 2011 was taken up through the bidding process. The Commission based the 20% price decrease for Solar Zones 2, 3, and 4 on the lower bids seen in PacifiCorp territory during the October 2011 allocation.

The table below summarizes the Commission ordered VIRs since the outset of the pilot, and indicates lowest bid and highest winning bids for the Medium October 2011 allocation. The bottom line of the table indicates the price rate reduction or increase since the previous enrollment period.

Kathleen Newman, OREP

History of OR Solar Pilot Program Voumetric Incentive Rates