No MID move on solar incentives leaves Modesto industry in limbo

Incentives will continue for the Modesto Irrigation District’s new solar customers – not because MID board members like the solar subsidy but because they couldn’t agree Tuesday on how to change it.

Solar vendors and employees packing the board chamber were happy with the reprieve, but they know it might not last. The MID board instructed staff members to return in a couple of months with a compromise between what the solar industry wants – minimal change – and staffers’ initial proposal, which some predict would destroy future solar sales in Modesto and other areas where MID supplies electricity.

“We don’t seem to have consensus” among board members, John Mensinger said.

The district says people without solar cover $2.5 million a year in costs that 2,374 residential solar customers don’t pay. The district’s staff proposed reducing the “cost shift” by about half, but solar representatives said that would cripple their ability to sell systems to future customers.

Last month, the board asked MID’s staff to confer with the solar industry, but solar representatives on Tuesday said the staff took a rigid stance and would not seriously consider other ideas. MID’s staff wanted to eliminate future customers’ ability to carry excess production credits from day to night and from sunny days to cloudy by implementing daily instead of yearly “true-up” calculations; current solar customers would be “grandfathered” and not subject to the change for 20 years.

Mensinger, a solar customer, suggested a compromise: monthly true-ups. That would shave about 10 percent of the current cost shift, compared with half under the staff proposal.

But other board members seemed to want something in-between.

Like all utilities, MID several years ago was forced by state law to offer incentives with the idea of getting the fledgling solar industry off the ground. The same law allows utilities to cancel programs once solar accounts for 5 percent of total electricity production, a threshold MID has reached, or to continue with reduced incentives.

Kurios Energy’s Todd Filbrun said planes, trains and automobiles were subsidized by government until strong enough to stand on their own. “Were those bad investments? We all benefit from those every day,” he said.

“My goal is to provide inexpensive power to customers,” not solar subsidies, board member Jake Wenger said. “Our job isn’t to provide everybody everything,” he continued, adding that he would prefer a smaller cost shift that doesn’t burden non-solar customers as much.

The board’s Paul Campbell said he would prefer holding off until solar legislation is settled in Sacramento, expected in August or September. It’s possible that utilities will be ordered to continue incentives beyond the 5 percent threshold.

“I’m not agreeing with you guys at all,” Campbell, a free-market advocate, told solar representatives. They are “crippled because of the way government handled this,” Campbell continued, predicting that state leaders “are going to force us” into some solar deal, and saying it makes sense to see what that is before moving ahead.

“Leave well enough alone,” said board Chairman Larry Byrd, drawing vigorous applause from the audience.

Wenger disagreed, accusing the board of “kicking the can down the road” instead of confronting a hard decision.

The most likely compromise could feature doing away with net metering, or keeping track of how much energy a solar customer contributes to MID compared to how much electricity the same house consumes. Staff members might return in June with a “buy all, sell all” approach, in which MID would simply buy all of a home’s solar production at a price that could be manipulated to achieve the board’s goal, MID pricing manager Jimi Netniss said.

“We commend the MID board for voting in the interests of the Modesto community by rejecting a proposal that would hurt the local solar industry and creating a proposal that is both solar- and utility- friendly,” said SolarCity executive Gina Goodhill Rosen.

In other action, the board agreed to spend $110,000 to replace a tractor that disappeared in February from a secured storage yard on Parker Road east of town. One board member hinted that the theft was an inside job.

“No fence was cut, no lock broken,” Byrd said. “Someone drove it out and locked the gate behind. You must be thinking what I’m thinking, and it’s not good.”

This story was originally published April 26, 2016 at 4:54 PM with the headline "No MID move on solar incentives leaves Modesto industry in limbo."