From: Anne Woiwode To

From Anne Woiwode

To MPSCEDOCKETS

Subject Electric Utility Case No U-15996

Date Sunday August 09 2009 54103 PM

Attachments WPLsummarypdf Sierra Club WPL - Direct Testimony of Sierra Club Bourg Robertson Cliburnpdf Sierra Club WPL - Exhibits 1-4 and public version of Exhibit 5pdf

Mr Bryce Feighner Acting Permit Section Supervisor DEQ Air Quality Division PO Box 30260Lansing Michigan 48909-7760 Ms Mary Jo Kunkle Executive Secretary Michigan Public Service Commission PO Box 30221 Lansing MI 48909 Re Consumers Energy Company ndash Permit to Install No 341-07 and Electric Utility Case No 15996 Dear Mr Feighner and Ms Kunkle In your consideration of ldquoneedrdquo for the power proposed to be produced by Consumers Energy through the Karn Weadock plant expansion and of ldquofeasible and prudent alternativesrdquo to meet that need if it were established we provide for your consideration the attached three pdf documents and this cover letter as a comment The attached documents include testimony submitted before the Wisconsin Public Service Commission in August 2008 by Joseph D Bourg Chris Robertson and Jill K Cliburn exhibits submitted as part of that testimony and a summary of the testimony

Briefing Paper

Sierra Club Testimony Demonstrates How Large-Scale Solar PV Will Cut

Wisconsin Utility Costs and Risks Summary In the face of another proposed rate hike from Madison-based Wisconsin Power amp Light (WPL) the Sierra Club has outlined a bold plan to break the grip that rising fuel costs high infrastructure costs and environmental risks have long held on the utility and its customers According to this plan the utility would build nearly 520 MW of solar generation distributed throughout its service territory over the next ten years and beginning with 10 MW by 2010 The result would be net economic benefits to the utility on the order of $38 billion Total benefits are nearly three times the initial investment Most of the savings would come from substituting fuel-free solar photovoltaics (PV) for natural gas generation from old and inefficient plants during summer when hot weather drives air conditioning demand Other costs that WPL has cited as drivers of this and earlier rate increases such as rising construction costs for generation transmission and distribution and rising pollution control costs are also addressed through the Sierra Clubrsquos strategy The analysis provided by Millennium Energy of Golden Colorado was based on standard solar technologies at current costs and data on utility generation transmission and distribution systems and costs supplied by WPL and widely accepted industry sources The analysis concluded that the utility would be imprudent not to begin a large-scale solar investment strategy without delay Background Until recently utilities across the US have tended to see solar energy as a minor player in their resource plans and more often as a non-utility choice for a subset of customers This is changing Solar industry and government sources agree that utility-solar programs and market development efforts reached a tipping point this year The shift came under pressure from rising costs for conventional electricity generation and deliverymdashincluding rising fuel costs rising environmental risks and strong evidence from the field that utilities can use PV to help solve some of their most vexing and costly problems Between March and August of this year utilities nationwide announced plans to acquire more solar generation than the total of all solar generation resources in the US to date It is striking that many of these utility projects will be distributed as opposed to centralized power plants These will be built on utility land across their territories on rooftops and parking lots leased from communities and customers on a highway right of way and at other sites In other cases the projects will be centralized scaled like the peaking power plants that they will largely displace For example

bull Duke Energy plans to own and operate 20 MW of PV distributed across as many as 850 sites North Carolina The utility also announced a power purchase agreement for a centrally sited 16 MW PV project

bull San Diego Gas amp Electric (SDGampE) plans more than 75 MW of PV including both utility-owned systems and customer systems built to utility specifications

According to the utility strategic system siting and design improves solar peak performance by up to two-thirds This followed a Southern California Edison announcement proposing 200 MW of utility PV built in partnership with commercial property owners

bull Portland General Electric announced plans to work with the Oregon Department of Transportation to install the first solar project on a median of a major US Interstate highway

bull Two similar large-scale efforts by PGampE in California and Xcel Energy in Colorado will focus on using PV specifically to displace natural gas The PGampE plan calls for two large plants totaling 800 MW The Xcel plan calls for a 200 MW solar plant which the utility says will help meet the needs of a recently canceled natural gas-fired plant

The pattern of solar development across the US is no longer bounded by the traditional Sun Belt In fact solar resources are strong throughout the US For example Wisconsinrsquos solar resources are stronger than those in any part of Germany which is the top market for PV in the world The technology is ready too Solar business models incorporating readily available PV technology and federal incentives can match or beat the market price for electricity on peak throughout most of the US today With prospects for continuously rising fuel prices and utility infrastructure costs it is likely that a New Sun Belt will reach across the continent with Wisconsin at its center The utility role in solar development is key because utilities are already charged with the responsibility to provide their customers with reliable responsible and cost-effective electric service As utilities incorporate significant amounts of solar into their resource portfolios they break the cycle of rising fuel-related costs and pollution-related problems The benefits of utility solar investments will be felt by all customers in the community as well as by utility stakeholders and stockholders Utility solar initiatives support widespread solar industry growth too so individuals will have more affordable and reliable solar choices and so workers can respond to the need for more clean-energy jobs Analysis specific to Wisconsin Power amp Light While the benefits of strategic utility solar are far-reaching the Sierra Club has taken a close look at solar costs and benefits in the context of Wisconsin Power amp Lightrsquos current proposed rate increase As an intervener in the rate case (Docket No 6680-UR-116) before the Wisconsin Public Service Commission the Sierra Club sponsored the analysis by Millennium Energy a Colorado-based consulting firm that specializes in solar development and utility resource planning First it was important to verify the solar resource looking at the match between strong summer-day PV production and the timing and magnitude of the utilityrsquos specific needs The analysis considered regional needs and operations too Under todayrsquos utility market conditions the Midwest Independent System Operator orders power plants for Wisconsin utilities so some solar-related savings may be shared among players in the market

The analysis found solar PV to be a good fit for WPL especially when deployed locally in increments of 100 kW to 5 MW Using the utilityrsquos current and projected cost data the analysis calculated estimated savings in the following categories bull Natural Gas Generation Savings bull Savings from Reduced Line Losses bull Avoided Peaking Power Plant Construction bull Deferred Distribution System Construction (specific lines and feeders transformers

substations) bull Solar Renewable Energy Credit (REC) sales on competitive markets The analysis looked at a range of cost forecasts for each category generally taking a conservative approach Ultimately for each scenario whether High- Medium- or Low-cost the net economic benefits of a utility solar investment outweigh the costs Results Benefits in any of the categories named above could add to the bottom line for a utility-solar strategy Yet this analysis showed unmistakably that natural gas cost savings comprise the leading category of benefits for WPL It is very likely that WPL could pay back the cost of a major solar program through natural gas savings alone This is likely to be true of other summer peaking utilities too but the savings opportunities for WPL are especially good because it has a strong and growing summer peak Saving natural gas is a cost-reduction strategy a risk management strategy and a conservation strategy as natural gas can be saved for other critical uses in utilities industries and homes Many benefits from a significant utility-solar rollout were not calculated though they are likely to be robust For example the proposed program would prevent the emission of 175 million tons of carbon dioxide over the life of the solar resource This supports utility and statewide goals to reduce greenhouse gas emissions The program also would prompt the retirement of dirty old natural gas plants On another front it would ease transmission congestion and related risks It would support local smart grid development and it would create more local clean-energy green-collar jobs The analysis concluded that WPL could meet its forecasted peak demand growth of 23 per year through an integrated distributed PV program beginning in 2013 If energy efficiency and other load management programs are also engaged to tackle peak demand growth the PV strategy could push the curve even lower reducing WPLrsquos historic peak as well as annual demand growth The proposed solar program includes a ramp-up period beginning with an initial solar deployment of 10 MW by 2010 In relatively short order the utility would be adding in the range of 75 to 95 MW of solar per year for a total of 517 MW by 2017 At that level Wisconsin would become one of the nationrsquos leading solar states breaking false but perceived market barriers to developing significant solar resources outside of the traditional Sun Belt This strategy would require due-diligence research by the utility the Commission and other stakeholders There is a large and growing body of research for proof of concept but management and staff at WPL MISO and other agencies need to learn the specifics

of how to plan procure and operate a large-scale solar resource for this utility in this state The Sierra Club has recommended a collaborative effort funded by the utility since it is the prime beneficiary but involving other agencies and stakeholder groups to bring the best available expertise to the table Practical Concerns The Sierra Club testimony submitted to the Commission in this rate case included a detailed review of data sources and a summary of study limitations and research needs It also included a rough estimate of costs for designing and beginning implementation of the proposed program In terms of the actual solar deployment the total cost of the ten-year plan depends in part on renewal of solar investment tax credits a measure that Congress should pass next year if not sooner In that event the net utility-solar investment for the WPL program would be around $2 billion But it would produce savings of more than $58 billion The opportunity is simply too great to ignore If natural gas prices continue to rise as expected the savings to WPL and its ratepayers from solar would only increase Reducing WPL costs of natural gas generation and purchased power through a solar strategy would also have the impact of stabilizing or decreasing utility costs (locational marginal pricing) from the independent system operator This would provide regional and utility-specific retail rate stabilization support Other solar program results would help too including lower environmental costs deferred or eliminated distribution system upgrades lower line losses and other benefits No one should suggest that utility rates will go down in the foreseeable future but utility-solar provides a hedge against increasing costs Now that the tipping point for utility solar has been reached it is time for Wisconsin utilities to move without delay to break the cycle of more and more rate increases for the same old reasons Millennium Energy Millennium Energy LLC of Golden Colorado provides a range of renewable energy development support with a specialty in utility resource planning and renewable energy integration The companyrsquos President Joe Bourg has led numerous renewable energy projects and programs including serving as lead consultant for the largest customer-sited photovoltaic system in California and in the Federal sector at the time of its construction Millennium assembled the consulting team for this project The team also includes Chris Robertson of Portland Oregon who brings expertise in energy program planning and management as well as direct experience with leading innovators in the solar industry Jill Cliburn of Santa Fe New Mexico brings decades of utility-sector and renewable energy experience with emphasis on industry-wide best practices and innovations supporting mixed-resource portfolios Members of the Millennium team all have been thought leaders on utility solar development publishing widely and advising utilities policymakers the solar-investment sector and others on cost-effective and strategic utility solar

1 Joseph D Bourg Chris Robertson Jill K Cliburn for Sierra Club

Direct Testimony August 11 2008

BEFORE THE

PUBLIC SERVICE COMMISSION OF WISCONSIN

____________________________________________________________________________________

Application of Wisconsin Power and Light

Company for Authority to Adjust

Electric and Natural Gas Rates

Docket No 6680-UR-116

____________________________________________________________________________________

DIRECT TESTIMONY OF

JOSEPH D BOURG CHRIS ROBERTSON AND JILL K CLIBURN

ON BEHALF OF THE SIERRA CLUB

August 11 2008

____________________________________________________________________________________

INTRODUCTION 1

MR BOURG 2

Q Please state your name and business address 3

A My name is Joseph D Bourg My business address is 26122 Chief Hosa Road Golden 4

Colorado 80401 5

Q What is your occupation 6

A I am the founder and President of Millennium Energy LLC a consulting firm founded in 1998 7

that provides technical economic marketing and regulatory support services for renewable 8

energy projects programs and initiatives throughout the country I am also a principal and 9

cofounder along with Chris Robertson and Jill Cliburn of Strategic Solar Solutions LLC This 10

firm is aimed at facilitating strategic solar development 11

Q Please summarize your educational background and professional experience 12

A I received a bachelorrsquos degree in Environmental Science from the University of California at 13

Berkeley in 1987 14

Since founding Millennium Energy I have worked to the support development of 1

renewable energy programs and projects for such clients as the US Department of Energy 2

National Renewable Energy Laboratory National Rural Electric Cooperative Association Los 3

Angeles Department of Water and Power City of San Diego and the US Naval Facilities 4

Engineering Command to name a few In addition I have provided project-consulting services 5

to Johnson Controls Inc including serving as the lead consultant on the development of the 6

largest customer-sited photovoltaic system in California and in the Federal sector at the time of 7

its construction 8

Before founding Millennium Energy LLC I was a Senior Associate at NEOS 9

Corporation where I specialized in technical and economic analysis of energy efficiency and 10

renewable energy projects and provided technical assistance to utilities in the areas of renewable 11

energy project development strategic planning energy project RFP development economic 12

development environmental compliance and regulatory policy analysis In addition I provided 13

consulting support in the development and implementation of Integrated Resource Planning 14

requirements for the Western Area Power Administration 650+ wholesale power utility 15

customers 16

Q Have you previously testified before a regulatory agency or tribunal 17

A Yes I provided expert analysis support to the State of Hawaiirsquos Consumer Advocate as part of 18

that statersquos first demand side management proceedings undertaken by the Public Utilities 19

Commission in the early 1990s 20

MR ROBERTSON 21

A My name is Chris Robertson My business address is 3707 NE 16th

Avenue Portland OR 1

97212 2

A I am working in this proceeding in consultation with Millennium Energy LLC Currently I am 4

the Vice President for Public Affairs of Peak Sun Silicon in Salem Oregon a high technology 5

start-up company focused on commercializing a new source of electronic-grade silicon for the 6

solar energy industry I also am the principal of Chris Robertson amp Associates LLC a Portland 7

Oregon consulting practice dedicated to the design of strategic innovations in energy and 8

environmental management and sustainable development In 2004 I initiated the Electric Solar 9

Utility Network project a consulting and learning organization that worked with utilities the 10

solar industry and stakeholders to develop distributed-solar business models to support utility 11

deployment of solar resources This led to the formation of Strategic Solar Solutions LLC in 12

which I am a principal and cofounder along with Joe Bourg and Jill Cliburn This firm is aimed 13

at facilitating strategic solar development 14

A I received a bachelorrsquos degree in Design from Southern Illinois University in 1974 and an MA in 16

Human Ecology from the Governorsrsquo State University in 1976 I also have taken energy and 17

economics classes at the Sangamon State University (University of Illinois) in 1986-89 18

Before my current positions I served as the Program Manager for the Portland Energy 19

Conservation Inc (1989-90) where I designed and developed utility energy efficiency 20

programs focused on the New England Demand Side Management collaborative process In the 21

late 1980s I served as the Energy Services manager for Springfield Illinois City Water Light amp 22

Power where I directed CWLP RampD on distributed photovoltaics plus energy efficiency in 23

residential construction I also founded and co-directed Shawnee Solar a regional no-profit 1

energy agency (1978-84) where I designed the research public policy education and technology 2

demonstration programs 3

I have published numerous articles on energy efficiency the role of renewable energy in 4

electric utilities and related topics 5

A Yes In the early 1990s I provided expert testimony in cases related to electric utility demand-7

side management program planning design and evaluation These included Detroit Edison 8

Boston Edison Commonwealth Electric and Boston Gas In addition I provided expert analysis 9

of electric andor gas energy efficiency program designs and negotiation support for some 18 10

DSM collaboratives These were mostly structured as settlement negotiations in the context of 11

litigation before the regulatory agencies 12

MS CLIBURN 13

A My name is Jill K Cliburn My business address is 45 Crazy Rabbit Drive Santa Fe New 15

Mexico 87508 16

A I am working in this proceeding as a consultant to Millennium Energy LLC Currently I am the 18

president of Cliburn and Associates LLC in Santa Fe New Mexico which is focused on 19

helping utilities nationwide adopt sustainable energy technologies and practices I am also a 20

principal and cofounder along with Joe Bourg and Chris Robertson of Strategic Solar Solutions 21

LLC in Portland Oregon This firm is aimed at facilitating strategic solar development 22

A I received a BSJ from Northwestern University in 1977 with a major in advertising I also 1

studied energy economics in the masterrsquos program at Sangamon State University (University of 2

Illinois) in Springfield in the early 1980s I have been active in professional development 3

organizations including the American Solar Energy Society Association for Energy Services 4

Professionals American Demand-Side Management Professionals and others 5

I founded my independent consulting practice in 1988 near Washington DC and have 6

continued to serve a national client base This includes developing methodologies training 7

programs best-practice assessments and policy recommendations for demand-side management 8

and energy-services programs and for renewable energy programs including solar wind and to 9

a lesser degree biomass This includes extensive work in 2004-2007 for the Electric Solar 10

Utility Network project at Chris Robertson amp Associates 11

My firm has been a subcontractor to the US DOE Wind Powering America program 12

specifically to assist in market development in the electric cooperative and public power sectors 13

I have also worked directly with utility trade associations (APPA NRECA EEI) and their 14

members state regional and federal energy programs such as Western Area Power 15

Administration and policy projects such as the Southwest Energy Efficiency Project 16

Consulting firms such as CH2M Hill Aspen Systems Xenergy Nexus Energy and others have 17

contracted for my expertise in best-practices and policy assessment and utility training 18

Before establishing my consultancy I served as Program Coordinator for the Energy 19

Services Exchange of the American Public Power Association (1986-88) Community Programs 20

Coordinator and Manager of Energy Services for Springfield City Water Light and Power 21

(1982-85) and State Solar Office Coordinator of the Illinois Department of Energy and Natural 22

Resources (1978-80) 23

I have published many articles and produced training formats that earned awards and 1

national recognition 2

A No 4

SCOPE OF TESTIMONY 5

Q On whose behalf are the three of you testifying in this proceeding 6

A We are testifying on behalf of the Sierra Club 7

Q What is the purpose of your testimony 8

A The purpose of our testimony is to demonstrate that a carefully designed strategy for utility 9

investments in solar energy resources could significantly reduce the cost of service for 10

Wisconsin Power and Light (―WPL) including capital and operating expenditures while 11

improving environmental performance and supporting grid modernization efforts The testimony 12

will define a strategic solar value analysis using WPLrsquos broadly outlined supply and demand-13

side requirements It will estimate total economic benefits and will provide recommendations for 14

utility solar research development and deployment Our testimony will more briefly discuss 15

ways to improve current customer-focused solar programs to enhance the overall objective of 16

developing solar resources that meet WPL cost service and policy goals 17

Q In brief what is the relationship between your testimony and the concerns of this rate case 18

A A robust strategic solar program would address all the cost drivers that Alliant Energy has 19

identified for the proposed WPL rate increase including the increasing cost of generation 20

infrastructure transmission infrastructure distribution infrastructure fuels and related risks 21

environmental compliance and the direct costs of customer solar program incentives and rates 22

The ten-year program that we propose offers net benefits of about $38 billion largely due to fuel 23

cost savings It would displace a significant amount of risk-laden high-cost natural gas with a 1

fuel-free solar resource and it would conserve natural gas for other important uses by the utility 2

and by Wisconsin industries and heating customers It would also save on the order of 175 3

million tons of CO2 4

These potential benefits are important in light of WPLrsquos current filing which offers no 5

significant departure from business-as-usual and thus portends more rate hikes and greater risks 6

at every turn as fuel costs infrastructure costs and environmental compliance costs continue to 7

rise While this proposal looks beyond immediate two-year timeframe for this rate case it would 8

be imprudent to delay this program which supports utility rate stabilization at the same time as 9

it supports many state policy goals 10

Q Please provide the main topics of this testimony and which of the experts has provided 11

each 12

A This testimony was collaboratively produced by the three expert witnesses named above Each 13

provided research and input for the discussion on each topic Those topics include 14

1 Context for Utility Distributed PV Development 15

2 Fit of the PV Resource 16

3 Reducing Peak and Intermediate Load Fuel Costs 17

4 Value of Avoided Power Plants 18

5 Value of Avoided Distribution System Costs 19

6 Renewable Energy Credits and Environmental and Carbon Reduction Benefits 20

7 Procurement Methods that Add Value 21

8 Total Benefits in the Analysis 22

9 Recommendations for WPL Distributed PV Strategy 23

10 Rate Impacts 1

11 Existing Programs Discussion and Recommendations 2

Mr Bourg provided all the spreadsheet analysis provided as Exhibits ___ through ___ 3

JDB 1-5 and is best able to present any clarifications on the analysis that may be needed He 4

may call upon Ms Cliburn and Mr Robertson for specific details relating to parts of the 5

discussion in particular Ms Cliburn on the status of the utility-solar market and on the existing 6

WPL programs discussion and Mr Robertson on the distribution system cost discussion and the 7

business models discussion 8

Q What characteristics define ldquostrategic distributed solarrdquo 9

A We are primarily addressing solar photovoltaics (―PV) though we will briefly discuss solar 10

water heating and other solar thermal technologies in a strategic context Strategic distributed 11

PV (―DPV) is a solar resource deployed on land or rooftops at or near utility load centers or 12

substations and distribution lines that serve load centers Strategic DPV is designed to utility 13

specifications for location scale orientation and operation to deliver value to the utility system 14

It may be directly owned by the utility or purchased under terms that deliver a range of values 15

that address utility-specific goals It may also be defined in contrast to solar PV that is installed 16

by customers primarily for their own benefit (environmental values bill savings net metering 17

tax credits and incentives reliability etc) though often with secondary utility- and public-18

benefits 19

Research efforts sponsored by US DOE state research agencies the solar industry 20

advocacy groups EPRI individual utilities and collaboratives of these have produced lists of 21

quantifiable values that apply to DPV ranging from nine general categories to more than 200 22

specific values1 Most of this research takes a broad perspective assuming primarily customer-1

owned solar However in our work we focus on a relatively short list of benefits in four 2

categories (shown in Table 1) which accrue specifically from strategic utility DPV2 3

TABLE 1

Sources of Value for Utility DPV and Those Reviewed for This Analysis

Peak and Intermediate Load Values Policy-Driven Values

Distribution investment deferral REC value amp RPS compliance costs

Transmission investment deferral Avoided rebate costs per solar deployed

Generation capacity Avoided net metering per solar deployed

Generation reserve Grid modernization

Natural gas savings

Purchased power Risk Management Values

Environmental Grid reliability amp outage prevention

Line losses Natural gas fuel price volatility

Reactive power amp voltage support Natural gas availability

Operating reserves Financial

Scheduling and dispatch Carbon mandate or cost

Regulation amp frequency response Insuranceclimate risk

Transmission congestion relief Share price amp fiduciary duty

Generation portfolio cost

Business Model Values

Tax investor participation

PV system portability

Costs and benefits of solar spread more evenly across the rate base

Green development partnership at public or customer sites

= quantified in this testimony

Source Robertson and Cliburn for ASES 2006 = discussed qualitatively in this testimony

Methodologies exist to account for most of these utility DPV benefits However in this 5

testimony we will discuss primarily the peak and intermediate load value of DPV plus other 6

aspects of generation value related to natural gas savings renewable energy credit value 7

1 Summaries of PV value studies in ―Photovoltaics Value Analysis (NRELSR-581-42303) Navigant Consulting for US

DOE National Renewable Energy Laboratory February 2008 and ―Utility Solar Business Models Emerging Utility

Strategies and Innovation (SEPA 03-08) J Nimmons for Solar Electric Power Association May 2008 2 ―Discovering the Distribution Capacity Value of Solar J Bourg J Cliburn and C Robertson Forum Presentation

Proceedings of the American Solar Energy Society San Diego May 2008 and ―Utility-Driven Solar Energy as a Least-Cost

Strategy to Meet RPS Policy Goals C Robertson and J Cliburn Proceedings of the American Solar Energy Society

Denver July 2006

procurement-related values and (in general terms) utility risk management The discussion of 1

solar peak and intermediate load value is highly relevant to this rate case both as it pertains 2

directly to WPL and as it pertains to MISO which dispatches generation for the region We 3

estimate these values based on utility data we total their likely values and provide 4

recommendations to complete the research and development (―RampD) necessary for WPL to 5

move forward with a significant high-value solar acquisition plan 6

Q What is the typical scale for strategic DPV 7

A We will describe planning and design for DPV in greater detail later in this testimony In 8

general the scale is defined by strategic needs such as avoiding high cost generation and 9

purchased power meeting a specific target for peak load reduction or deferring a distribution 10

upgrade on a specific circuit The important distinction lies between this approach which 11

delivers utility system benefits and a typical customer-driven PV approach which primarily 12

seeks to offset energy needs at the customer site While Automated Metering Infrastructure 13

(―AMI) and other smart grid technologies open the door for strategic operation of many very 14

small DPV systems we anticipate this approach to be introduced through the deployment of 15

DPV projects in the 100 kW to 5 MW range 16

Q Can you summarize your recommendations for WPL in terms their total impact on WPL 17

utility territory 18

A Yes The majority of our recommendations focus on using solar DPV to displace natural gas 19

used to serve peak and intermediate loads Displacing the natural gas that would be needed to 20

meet WPLrsquos forecasted load growth of 23 per year is a transitional strategy which brings 21

significant economic and environmental benefits to the utility its customers and its 22

stakeholders while beginning to develop the vast long-term market potential of DPV To 23

initiate this program we recommend a 10 MW pilot program supported by RampD within the 1

immediate 2009-2010 timeframe of this rate case Following incremental deployments through 2

2012 WPL would be positioned to meet its forecasted peak demand growth of 23 per year 3

through an integrated DPV program According to this schedule solar deployment would total 4

517 MW over ten years 5

Q What are the costs and benefits of this DPV program 6

A The net capital investment to develop this resource at the level we recommend would be about 7

$21 billion The net cost savings to WPL and its customers likely exceeds $38 billion We did 8

not evaluate all the potential costs and benefits We believe these numbers are conservative in 9

each direction so the costs could well be lower and the benefits greater The DPV investment 10

avoids emissions of 175 million tons of carbon dioxide over the life of the solar resource 11

Additionally since the DPV resource has zero fuel cost it will hedge the risk of fuel price 12

escalation and volatility 13

Q Are your recommendations for WPL limited to setting deployment targets 14

A No Central to this strategy is an RampD agenda that will help WPL to work with the Commission 15

and interested parties to refine its understanding of solar as a cost-effective peaking and 16

intermediate resource to address technical market and policy issues and to guide program 17

design and implementation A refined DPV analysis can guide WPL in adapting its solar 18

development plan in an environment of rapidly changing technologies policies and costs For 19

example if WPL were to simultaneously implement strong energy-efficiency and DSM 20

measures that suppress annual load growth then the utility could target its DPV strategy to begin 21

to impact not only load growth but also some percentage of the established peak load This 22

would go a long way in supporting the proposed Global Warming Task Force targets for 1

emissions reductions 2

Another area where the utility would have to be mindful of changing technologies and 3

costs is in specific regard to solar resources Our analysis uses all-in costs for one-MW scale 4

DPV at todayrsquos prices This is conservative as the solar industry has demonstrated consistently 5

falling costs along the lines of 20 for every doubling of PV industry capacity for the past 40 6

years PV manufacturing breakthroughs with related cost declines are also likely Assuming 7

solar costs continue to decline relative to rising fuel costs the utility will have to grow its solar 8

program to match increasing solar cost-effectiveness Yet the key point is that DPV is a highly 9

favorable investment at todayrsquos prices for the applications that we discuss There is no reason 10

for WPL to delay these investments or to delay establishing a long-term value-based solar 11

investment plan 12

Q What action do you propose the Commission take 13

A We propose that the Commission authorize a properly funded carefully designed collaborative 14

research and development effort involving WPL with the Commission state agencies MISO 15

and other interested parties as described in this testimony to guide WPL in making prudent 16

investments in solar DPV 17

Q How does your analysis relate to the Commissionrsquos view on using renewable energy 18

resources to support Wisconsin energy policy goals and its view that in some 19

circumstances renewables may be favored over lower-cost combustion fuels 20

A In our analysis presented in this testimony we demonstrate that very large investments in DPV 21

resources will be less costly than the alternative which is continuing to burn natural gas fuel to 22

meet peak and intermediate loads on the system Because the benefits are so large we believe 23

that it would be imprudent not to aggressively pursue this strategy But effective planning for a 1

resource of this magnitude is critical That is why we recommend that as a prudent first step the 2

Commission establish a properly funded carefully designed research and development 3

collaborative 4

Q Are there any other recommendations that you would like to summarize 5

A Our testimony also anticipates a growing market for customer-driven solar programs such as the 6

Focus on Energy Rewards Program the Second Nature program the Advanced Renewable 7

Tariff (―ART) and new solar water heating programs For example we recommend that the 8

proposed cap of 200 kW on solar acquisitions through such customer programs should be more 9

than tripled to 683 kW within the next two years We also recommend that WPL form a 10

working group within the RampD program described above to begin immediately to prepare 11

expanded PV and solar thermal programs for implementation in 2011 12

TOPIC 1 13

Context for Utility Distributed PV Development 14

Q Are the solar targets for WPL comparable to solar targets proposed by the solar industry 15

and by other states 16

A For the most part they are not comparable Recommendations for strategic solar acquisitions by 17

WPL are specific to that utility its needs and its economics This value-based approach is 18

fundamentally different from a typical benchmarking approach which would map historically 19

successful goals and strategies from other places directly onto WPL 20

Still it is useful to put the goals for WPL in a context of accelerating solar development 21

nationwide The US PV market has grown sharply throughout this decade averaging more than 22

40 per year Annual market growth in 2007 reached 47 and is expected to be even greater 23

this year Increasing investment in the solar industrymdashon the order of more than a billion dollars 1

in venture capital invested last yearmdashindicates that the solar products and expertise needed for a 2

significant WPL solar initiative will be available at competitive prices 3

Every year more states are increasing solar policy support and solar growth numbers 4

Table 2 States with Large and Fast-Growing Markets for Grid-Connected PV supports this 5

observation and the following relevant points 6

1 The leading solar states today in terms of current market growth rates and 7

cumulative PV installed include Colorado Connecticut Oregon New Jersey and New York 8

which are outside Americarsquos ―sun belt Wisconsin like these other northern latitude locations 9

has more than adequate solar resources to support robust solar development 10

2 Established state solar strategies such as incremental goals and commitments to 11

state-funded rebates are often outstripped by the demand in the marketplace Utilities in 12

Colorado and Nevada among other states are ahead of schedule to meet solar goals while 13

customer p programs in states such as California and New Jersey have been oversubscribed year 14

after year In Wisconsin too solar projects are already in the queue anticipating ART funding 15

that will quickly exhaust the proposed 200 kW cap 16

3 Established approaches have been useful in building solar markets but they are 17

already evolving and expanding to support greater and more cost-effective market growth In 18

particular in each of the leading solar states named in Table 2 regulators have recently 19

supported a growing role for utilities developing ways to increase solar capacity value capture 20

distributed-resource values and distribute benefits more equitably To advance RampD and utility-21

solar deployment several states have effectively used distributed-resource collaboratives such as 22

the Mid-Atlantic Demand Response Collaborative and DOE-funded Solar Electric Power 23

Association (―SEPA) Solar Capacity Workshops Such efforts in states and nationwide have 1

accelerated solar market growth or promise to do so as new utility solar programs play out 2

TABLE 2

States with Large and Fast-Growing Markets for Grid-Connected PV

PV installed

in 2007

market

growth

Cumulative

installed PV

capacity

Goals and Comments

Colorado 125 1150 145

Small solar set-aside (04) within 20 by 2020 RPS With its

Jan 08 RFP for 24 MW of solar Xcel Energy will meet about

one-fourth of that target CO utilities are also demonstrating

DPVsmart grid functionality

Nevada 146 556 187

Solar set-aside (PV and CSP) 5 within 20 by 2015 RPS

Utilities have already met the solar goal through 2014 but strong

growth in PV continues

Hawaii 24 243 187 Triple-digit growth expected to continue in 08 as PV is less

expensive than other generation resources

Connecticut 18 157 28

Includes state and regional collaboration on distributed resource

RampD including a pending project to demonstrate the capacity

value of PV

Oregon 11 120 28

Data for Portland General Electric and Pacific Power territories

only PV supported by a business energy tax credit aimed

economic development 25 by 2025 RPS distributed

generation including DPV will provide 8 of service by that

New York 44 52 151 2 set-aside for distributed renewables (customer-sited) within

24 by 2013 RPS Utility DPV RampD with stateutility support

Arizona 28 33 186

Overall goal 15 renewables by 2025 one-third of which (about

2000 MW) must be distributed generation Utility leadership in

capturing the capacity value of PV

California 871 25 3270

3000 MW solar by 2017 within 33 by 2030 RPS Utility DPV

RampD with stateutility support Policy planning underway to

support more utility DPV

All Others

250 Various 679

Includes New Jersey (435 MW cumulative) where state

programs were stalled during revision

Average 1517 47 4712

Context Focus on Energy reports Wisconsin PV market growth

since 2002 averaging 80 per year Cumulative PV installed

statewide ~1 MW

Sources Clean States Energy Alliance Clean Edge LLC and Co-op America Foundation

Q Please provide specific examples of how an expanding utility role has accelerated solar 4

market growth or promises to do so 5

A We will discuss five recent examples and provide brief comments on others 1

1 Duke Energy Carolinas announced in May that it would own and operate 20 MW 2

of PV distributed across as many as 850 sites North Carolina The total cost of the project is 3

estimated at $100 million including incentives to customers who allow the utility to use their 4

roof space Project drivers include helping the utility meet state RPS requirements and providing 5

experience with solar technology which the company expects to play an increasingly greater role 6

in its portfolio Duke Carolinas recently also announced a power purchase agreement with solar 7

developer Sun Edison for a centrally sited 16 MW PV project 8

2 In July San Diego Gas amp Electric (SDGampE) filed an application with the 9

California Public Utilities Commission to build own and operate 52 MW of distributed PV on 10

its system within the next five years In addition SDGampE expects to work with customers to 11

jointly build 25 MW of DPV mostly in 1 to 2 MW increments Likely sites include open areas 12

and parking lots as well as local government and solar industry facilities According to the 13

utility PV tracking-system design and siting will improve energy production and peak capacity 14

value relative to typical PV installations by about 40 and 65 percent respectively This project 15

follows on a series of smaller solar projects that the utility has completed to research and 16

demonstrate DPV and integrated solar load management and energy-efficiency strategies 17

3 In March Southern California Edison submitted plans to the California PUC to 18

own and operate 250 MW of DPV that will be sited in 1 to 2 MW increments on leased customer 19

sites including roof space leased from large facility management firms As a distributed power 20

plant it will not require transmission service It will be designed to maximize peak generating 21

capacity introducing technical enhancements as the project unfolds over about 5 years SCE 22

intends to streamline design procurement and installation to achieve an average cost per 1

installed peak watt that is less than half the average cost for most solar projects today 2

4 A new Massachusetts state law supported by N-Star National Grid and other 3

utilities abolishes an earlier prohibition on utilities owning solar resources in that state Now 4

utilities are encouraged to purchase solar PV directly to set design standards that maximize 5

strategic solar value and to provide attractive lease-to-own programs for residential customers 6

who could not afford the upfront costs of typical solar rebate programs Massachusettsrsquos utilities 7

are also encouraged to enter into power purchase agreements for MW-scale PV in an effort to 8

meet an accelerated state RPS 9

5 In August Portland General Electric announced plans to work with the Oregon 10

Department of Transportation to install the first solar project on a median of a major US 11

highway The project will run for several hundred yards along the median of Interstate 5 near 12

Interstate 205 It demonstrates an innovative business model which will allow taxable investors 13

to utilize tax-credit incentives while it positions Portland General Electric to eventually take 14

ownership of the solar generating asset The Department of Transportation will pay a highly 15

competitive rate to the utility for green power produced from the project This procurement 16

model is explained in more detail in testimony below 17

Other innovative utility solar projects have emerged in recent months too Several 18

utilities including Xcel Energy have incorporated PV into local smart grid projects developing 19

and demonstrating ways to enhance PV value to customers and benefits to the grid Lakeland 20

Electric in central Florida is currently negotiating with vendors to buy up to 24 MW of 21

distributed solar PV a total that represents 5 percent of its total generating portfolio 22

Q As the Commission has requested that your testimony be focused on Wisconsinrsquos situation 1

and this rate case please comment briefly on how the trend toward utility-driven PV 2

specifically impacts WPL 3

A The experts on our team have been tracking this trend since its foundations were laid Several 4

strategic utility PV projects were done in the late 1980s and 1990s During that time the 5

Wisconsin Commission (―PSC) considered PV in its plans to increase the role of strategic 6

distributed generation3 However strategic utility PV did not take hold at that time We believe 7

the examples provided suggest not only that strategic utility DPV is now viable in a range of 8

locations but also that the conceptmdashwith many variationsmdashhas reached a tipping point A study 9

released by the National Renewable Energy Laboratory (―NREL) in February 2008 concluded 10

that the growth of DPV ―would eventually become a material and operational concern with the 11

earmarks of a disruptive technology but that it was also an opportunity for utilities as ―the full 12

benefits of an extensive distributed PV resource are not likely to be realized without some degree 13

of utility control and possibly ownership4 Notably nearly all of the utility initiatives we cited 14

above came to light in the six months since that NREL study was released 15

Wisconsin had about 1 MW of PV at yearend 2007 according to Focus on Energy5 It 16

has sustained a solar development growth r ate of 80 since 2002 which suggests megawatts 17

more of solar before the end of the decade Yet this growth does not begin to reflect the extent 18

3 The Wisconsin Public Service Commission ―Report to the Legislature on the Development of Distributed Electric

Generation in the State of Wisconsin (05-EI-122) Madison December 2000 includes PV cost and benefits discussion and

suggests ―An appropriate incentive program to promote DG from the utility perspective should encourage the utility or its

customer to install DG units dispatched by the utility or used by the customer primarily to satisfy its own peak demand needs

Such a program should also encourage siting of these units in locations where their presence helps hellip the distribution

system 4 ―Photovoltaics Business Models (NRELSR-581-4230) National Renewable Energy Laboratory February 2008

5 Calculation provided by Niels Wolter Focus on Energy in correspondence 7808 It includes rebate-funded installations

and an estimate of non-funded installations

of Wisconsin solar development that would be possible through greater engagement of utilities 1

beginning with this DPV strategy for WPL 2

TOPIC 2 3

Fit of the PV Resource 4

Q Have you performed analyses to determine the coincidence of DPV output with WPL peak 5

demand 6

A Yes We performed an analysis that demonstrates the fit of the DPV resource within WPLrsquos 7

peak demand profile We reviewed the daily summer peak demand profile for WPL as well as 8

the daily generation profiles of DPV in the peak summer months to determine the overall 9

coincidence of PV output with WPL peak demand Coincidence is defined as the degree to 10

which the hourly PV output matches the hourly profile of system demand in terms of magnitude 11

and duration In the case of WPL system loads the hourly PV output increases proportionately 12

to the increases in system demand and is available for the duration of the peak demand period 13

with the exception of the evening shoulder period This result is quite expected as peak loads 14

are typically driven by increased air conditioning loads as local temperatures rise throughout the 15

day Similarly rising temperatures are typically driven by increased solar irradiance which is 16

the ―fuel of the PV resource Hence there is a high correlation or coincidence of utility system 17

peak loads and the output of solar resources 18

To demonstrate this point we performed analyses of the WPL system peak day in 2007 19

(August 1) and the generation output of various PV system configurations modeled with Typical 20

Meteorological Year (―TMY) data from Madison Wisconsin TMY data is comprised of 21

hourly historic meteorological data collected over a 30-year period (1961-1990) providing 22

average hourly values that are used to predict the expected output of a PV system for any given 23

day and hour of the year While Madison is not served by WPL it is the closest weather data set 1

available to the WPL service area and it should be noted that PV system output is very 2

consistent throughout the state In performing this analysis we plotted WPLrsquos peak day hourly 3

system demand against the hourly output of several system configurations of 250 MW of solar 4

installations We chose the 250 MW PV system size for several reasons 1) it represents 5

approximately 10 of the system peak demand 2) it was necessary to select a significantly sized 6

PV resource to graphically illustrate its impacts on system load and 3) it represents a significant 7

portion of the PV capacity additions we are recommending in this testimony After plotting the 8

daily peak load profile and hourly PV capacity output we plotted a modified peak day load 9

profile demonstrating the impacts of the PV generation 10

Q Could you please describe the results of this analysis 11

A Yes Exhibit___ JDB-1 provides the calculations and graphic summaries of these analyses As 12

seen in this exhibit we performed analyses of four different PV system configurations 1) a 13

fixed-tilt 45-degree due south facing system 2) a single-axis tracking system 3) a fixed-tilt 45-14

degree southwest facing system and 4) a fixed-tilt 45-degree due west facing system We 15

modeled all four of these systems to demonstrate the impacts of PV system design and 16

orientation on the coincidence with daily peak loads 17

All four of these PV system configurations have generally similar impacts on reducing 18

peak system loads particularly between the hours of 10 AM and 5 PM However there are 19

distinct differences among the design configurations and the magnitude and duration of their 20

peak load impacts The 45-degree fixed-tilt system facing due south is designed to maximize the 21

PV systemrsquos energy output over the course of a year It reaches peak output at ~1 PM before 22

leveling off production until about 5 PM Orienting this same system 45 degrees to the west 23

extends peak production by about an hour until ~2 PM and extends the duration of the output 1

into the shoulder period until nearly 7 PM Rotating the orientation an additional 45 degrees to 2

due west extends the peak production output of the system until nearly 4 PM and extends 3

shoulder period production until after 7 PM There are tradeoffs associated with varying the 4

orientation of the PV system For example as the orientation shifts further west extending the 5

peak production period of the system later into the day the magnitude of peak production 6

decreases In addition the further the system is oriented away from due south the larger the 7

penalty in terms of reducing annual energy production 8

A key point of this analysis in addition to demonstrating the high coincidence factor with 9

WPLrsquos system peak demand profile is that there are tradeoffs between system design for peak 10

capacity output and for annual energy production Careful consideration must be applied in the 11

utility DPV planning process to design systems for maximum economic value which may be 12

different than system design for maximum energy output over the course of a year 13

Q Did you perform similar analyses for any other PV system configurations 14

A Yes We also included an analysis of the coincidence of a horizontal single-axis tracking 15

systemrsquos output on a typical summer day with the WPL peak day load profile While single-axis 16

tracking systems are slightly more expensive than fixed-tilt systems (less than 10 additional 17

cost) they avoid the design tradeoffs associated with fixed-tilt systems As seen in Exhibit___ 18

JDB-1 the magnitude of peak production is approximately equal to or greater than the fixed-tilt 19

options and the duration of this systemrsquos output is longer Production of a single-axis tracking 20

system begins at 6 AM and extends peak production through 4 PM before production drops off 21

through 7 PM This extended duration of peak production is due to the fact that the tracking 22

system follows the sun over the course of the day to optimize the angle of incidence on the solar 23

panels to maximum hourly system output While single-axis tracking systems provide the best 1

design solution in terms of production capability and the best fit with system peak loads they are 2

not suited to all potential applications such as rooftops and landfills 3

For a graphic summary of the hourly output profiles of the various PV system 4

configurations please refer to Exhibit___ JDB-1 page 7 and the graph entitled ―Comparative 5

Capacity Output of PV Configurations 6

Q How does the incremental cost of a single-axis tracking system compare to the cost of a 7

fixed-tilt system 8

The difference in cost between a single-axis tracking system and a fixed-tilt system is minimal 9

The standard metric for valuing PV installation costs is in terms of $kW (DCp) or ―dollars per 10

kilowatt of DC system nameplate capacity Turnkey installation costs of a fixed-tilt PV system 11

currently average around $6500 per kW These costs include component costs of PV modules 12

inverters mounting structures balance of system components (wire connectors conduit 13

concrete footings concrete inverter pads) and laborinstallation costs These costs are 14

essentially the same for a single-axis tracking system except for the additional cost of the tracker 15

assemblies (which replace the mounting structures) and actuators which add about $500 per kW 16

to the cost of a fixed-tilt system for an average cost of $7000kW 17

Q Your analysis of PV system output duration indicated that solar generation does not fully 18

extend into the shoulder periods of WPLrsquos peak day load profile with most system 19

configurations dropping off production after 4 PM Does the DPV strategy include any 20

solutions for addressing loads during these shoulder periods of the day 21

A Yes A DPV strategy integrated with demand-side management measures such as energy 22

efficiency load control and demand response can extend the reduction of peak loads into the 23

shoulder periods This strategy is discussed in greater detail below In addition the use of these 1

demand-side strategies can firm variations that might occur in PV output during the systemrsquos 2

peak production hours 3

Q Do you have any additional recommendations related to the deployment of DPV to mitigate 4

any variations in PV production during these times 5

A Yes We recommend a PV siting strategy known as geographic diversity This involves siting 6

PV systems throughout a utilityrsquos entire service area which has the effect of maximizing output 7

of the collective PV installations and minimizing risks associated with the occurrence of passing 8

cloud cover For example if 25 MW of PV were sited within a 5-mile radius or in one single 9

location a passing cloud would likely have the effect of significantly reducing generation output 10

If these same 25 MWs were geographically dispersed in say 2 MW increments throughout the 11

WPL service area passing clouds may impact the production of one or two smaller systems at a 12

time but the overall production of the collective systems would not be subject to large variations 13

in output 14

TOPIC 3 15

Reducing Peak and Intermediate Load Fuel Costs 16

Q Please explain how investments in distributed PV can reduce WPL costs related to peak 17

and intermediate load operations 18

A The following analyses include calculations for PV dispersed throughout the WPL service 19

territory using both fixed-tilt and single-axis tracking DPV scenarios with all-in costs of $6500 20

per kW and $7000 per kW respectively The daily generation profile of PV is highly coincident 21

with the WPL systemrsquos daily load profile particularly in the summer season and summer season 22

shoulder months We assume the daily peak and intermediate loads that would be served by the 23

solar resource would otherwise be served with power generated by natural gas fired combustion 1

turbines obtained from WPL owned generation power purchase agreements and MISO spot and 2

day-ahead market purchases Typically gas fired generation during the peak hours of the day is 3

the most expensive source of power and as MISO system demand increases less efficient and 4

higher cost generating units are brought on-line to meet rising system demand for power Thus 5

as demand increases so does the marginal cost of power PV generation sited within utility load 6

centers directly reduces the power required from this high marginal cost natural gas-fired 7

generation Distributed PV also offsets generation from natural gas intermediate load and peaker 8

units whose output is required to overcome transmission and distribution system line losses 9

Based on DPVrsquos ability to reduce power requirements from natural gas fired generation units 10

both fuel savings and fuel-related cost savings from avoided power purchases could be realized 11

Furthermore every MWh of PV generation can provide a greater than one-to-one offset of 12

equivalent natural gas fired generation Saving natural gas is significant because rising gas cost 13

is one of the drivers of WPLrsquos proposed rate increase 14

Q Have you examined the historic price trends and volatility associated with natural gas 15

prices as part of your testimony 16

A Yes We reviewed the Energy Information Administrationrsquos (―EIA) historic prices for a) 17

monthly delivered prices of natural gas for power production in the US from 2002 through 18

February of 2008 and b) WPLrsquos annual average cost of natural gas in its generation fleet from 19

1998-2007 Exhibit___ JDB-2 provides a graphic comparison of this pricecost data for the 20

2002-2008 period including trend lines for each data source Examination of the historic 21

pricecost data shows that natural gas prices have been highly volatile over the last six years 22

with an overall trend toward higher highs and higher lows This upward trend in natural gas 23

prices has far exceeded industry analyst forecasts with US average natural gas prices increasing 1

over 300 and WPL natural gas costs increasing nearly 260 over the six-year analysis period 2

This equates to a year-over-year average price increase of 51 for US natural gas and a 43 3

increase for WPL The impacts of these rising costs and the nature of natural gas price volatility 4

present significant risks to WPLrsquos ability to effectively plan for future power needs to efficiently 5

recover costs of fuel for generation resources and to provide stable rates for its customers This 6

risk is acknowledged by WPL in its application for authority to adjust electric and natural gas 7

wherein it states ―Fuel costs have continued to be a highly volatile element of WPLrsquos overall 8

costs to supply electric service to its retail customers as well as an ever-increasing proportion of 9

total costs6 10

Q Have you examined natural gas price forecasts as part of your testimony 11

A Yes We collected and reviewed US price forecasts for delivery of natural gas for electric 12

power production from three sources 1) the EIA Annual Energy Outlook (AEO 2008 with 13

Projections to 2030 2) the California Public Utilities Commission US Natural Gas Forecast 14

developed under its Market Price Referent Proceeding and 3) a statistical forecast of natural gas 15

prices developed by Dr Andy Bardwell7 We also requested a 30-year natural gas forecast from 16

WPL but were only provided forecasts for the 2009 and 2010 test years as WPL would not 17

provide forecasts beyond 2010 as part of this proceeding 18

While we recognize that attempting to forecast natural gas prices over 30 years is subject 19

to a high degree of uncertainty and margin of error we believe it is prudent planning to review a 20

range of probable forecasts based on sound methodologies The purpose of examining these 21

forecasts was to determine the range of cost savings that could be accrued from a distributed PV 22

6 Exhibit___(MWS-1) Docket 6680-UR-116 Page 2 of 17

7 Expert Witness Testimony to Colorado PUC Docket 07A-447E

plant displacing natural gas fired peaking units over the 30-year expected life of the solar 1

resource The EIA AEO 2008 forecast was selected as a conservative base case scenario as a) 2

it is an updated forecast of the AEO 2007 forecast that was approved as the ―low price scenario 3

in the Governorrsquos Task Force on Global Warming Report b) the EIA natural gas forecasts have 4

proven to be historically low and c) WPL was paying two times as much in 2006 and 2007 than 5

the EIA forecast for any year through 2030 6

The California PUC forecast was selected as a mid-price scenario and Dr Bardwellrsquos 7

forecast was designated the high price scenario To aid in our analysis of potential natural gas 8

cost savings from PV we determined the average forecasted price of natural gas over the next 30 9

years for each of the three scenarios as follows 10

EIA AEO 2008 Forecast $667Million BTU (―mmBTU) 11

CA PUC Forecast $916mmBTU 12

Dr Bardwell Forecast $1267mmBTU 13

For reference the EIA lists the market price for delivery of natural gas for electricity production 14

as $940mmBTU in February 2008 15

Q Did you calculate the potential natural gas and associated cost savings accruing from 16

investments in distributed PV generation 17

A Yes We developed a spreadsheet model which is included as Exhibit___ JDB-3 to quantify 18

potential natural gas and natural gas cost savings from PV generation over its expected 30-year 19

life Natural gas savings were calculated for avoided natural gas generation and line losses For 20

simplicity we modeled the savings based on a 1 MW nameplate capacity PV system the results 21

may be scaled linearly to approximate the results for any size system or for a combination of 22

systems Utilizing PVWatts a National Renewable Energy Laboratory PV output simulation 23

tool it was determined that a fixed-tilt (45-degree) due-south facing PV system in Madison 1

would generate 1260 MWh per year and a horizontal single axis tracking system would 2

generate 1449 MWh per year 3

In calculating the natural gas savings from avoided natural gas generation peaking and 4

intermediate load units it was assumed that each MWh would offset gas-fired generation energy 5

requirements on a one-to-basis Thus a 1 MW PV fixed tilt PV system would displace 1260 6

MWh of natural gas generation and a single axis tracking system would displace 1449 MWh 7

per year For this analysis we did not differentiate whether the displaced natural gas from PV 8

generation would be derived from WPL generation units or units owned by other entities 9

supplying WPL with electricity via power purchase agreements or the MISO spot market This 10

is due to the fact that MISO controls the dispatch of WPL natural gas fired generating units and 11

we were unable to obtain or determine the loading order of WPL and other MISO area 12

generating units Therefore we assumed that MISO-dispatched natural gas generation is similar 13

in vintage and efficiency as the WPL gas generation fleet which has a weighted average heat 14

rate of 13567 BtukWh We believe this to be a valid assumption as the weighted average is 15

biased towards lower heat rate higher efficiency units with higher hours utilization relative to 16

the high marginal cost higher heat rate units that DPV would displace 17

An important element of this analysis is the recognition that DPV generation that offsets 18

non-WPL natural gas units in the MISO area provides monetary benefits to WPL and the entire 19

MISO membership When DPV is deployed on a significant scale as we propose in this 20

testimony then the solar resource would displace power generation from a high marginal cost 21

unit operating on the MISO system andor defer or eliminate the need for generation from that 22

unit altogether This provides two distinct benefits 1) it provides downward pressure on 23

locational marginal prices and 2) it avoids burning natural gas in the least efficient highest 1

marginal cost units This strategy is the core of deregulation philosophy allowing for 2

competition among generation sources to encourage greater efficiency and lower costs for all 3

members of the power pool Therefore the aggregate natural gas savings within the MISO 4

power pool would provide cost savings benefits to WPL in the form of lower spot market prices 5

and purchased power costs 6

Q Please describe your analysis of the value of natural gas savings 7

A In estimating the gross value of natural gas savings we analyzed two DPV system types 1) a 45 8

degree fixed tilt south facing system and 2) horizontal single axis tracking system The 11 9

offset of DPV generation to natural gas generation results in estimated annual natural gas savings 10

of 17096 Million BTU (―mmBTU) from the fixed tilt system and 19652 mmBTU from the 11

tracking system Applying the natural gas price forecast scenarios detailed previously to the 12

estimated annual natural gas savings over 30 years the potential natural gas cost savings from a 13

1 MW PV fixed tilt system were determined to be 14

Low Natural Gas Price Scenario $3421568 15

Mid Natural Gas Price Scenario $4698786 16

High Natural Gas Price Scenario $6496001 17

Similarly the potential natural gas cost savings from a 1 MW PV single axis tracking 18

system were determined to be 19

Q Did you analyze related savings accruing from avoided line losses on the transmission and 1

distribution system 2

A Yes One of the benefits of DPV is that generation is provided at the load center which directly 3

displaces line losses that would have occurred if the same amount of energy were delivered to 4

the load center via the transmission and distribution system For example 1 MWh delivered to 5

the load center would require 1054 MWh of natural gas generation to account for line losses 6

(based on the annual average line loss factor of 54 provided by WPL) With distributed PV 7

the additional 0054 MWh of natural gas generation is avoided Applying the avoided annual 8

line loss factor (54) to the output of a 1 MW fixed tilt PV system results in additional natural 9

gas savings over 30 years on the order of 10

Similarly the avoided line loss natural gas cost savings from a 1 MW PV single axis 14

tracking system were determined to be 15

We believe these estimates of natural gas cost savings from avoided line losses to be 19

conservative as the line loss factor of 54 provided to us by WPL was an average loss factor 20

for the entire year WPL does not currently maintain information on hourly line losses It is 21

common for transmission and distribution line losses to exceed 15 during peak hours of the 22

day coinciding with the generation profile of PV resources Sarah Else WPL Director of 23

Renewable Energy Resources cited this data from the Energy Information Administration in her 1

prepared testimony to suggest the potential role of PV to help improve WPL system efficiency8 2

Q What is the overall impact of the potential natural gas cost savings from distributed PV 3

and how does it relate to the investment cost of developing PV resources 4

A The overall impact of natural gas cost savings from investments in PV is significant and its 5

relation to overall PV development costs is compelling Continuing with the 1 MW PV 6

examples DPV energy output from a fixed tilt system over 30 years could provide cost savings 7

from avoided natural gas-fired generation for avoided gas-fired generation and line losses in the 8

following range 9

Similarly the overall natural gas savings from a single axis tracking system were 13

determined to be in the following range 14

Based on the assumptions utilized in this analysis each MWh of DPV generation 18

provides 1054 MWh of avoided natural gas generation These natural gas cost savings 19

irrespective of which gas price scenario is utilized represent a significant proportion of overall 20

PV development costs Today a fixed tilt PV system in the 1 MW range can be installed for a 21

turnkey cost of ~$6500 per kW The cost savings from this type of system from avoided natural 22

8 Supplemental Direct Testimony of Sarah Else Docket 6680-UR-116 February 22 2008 page 22 at line 5

gas fired generation alone provides benefits in the range of $3600 to $6850 per kW which 1

equates to 55-105 of the total capital cost of the PV system A single-axis tracking PV 2

system costs slightly more than a fixed tilt system and can be installed for a turnkey cost of 3

~$7000kW and provides natural gas savings benefits in the range of $4150 to $7850 per kW 4

or 59-112 of the systemrsquos capital cost over its 30 year life PV systems can have a majority 5

if not all of their capital costs paid for through natural gas savings alone 6

Q Please explain the relationship among PV generation natural gas savings and avoided 7

MISO purchases 8

A Our analysis focused on the role of distributed PV in the WPL resource mix WPL obtains its 9

electrical resources from its own generation facilities (coal natural gas and wind) and purchased 10

power including MISO day ahead and MISO spot purchases Depending on the season and time 11

of day PV will directly offset WPL generation primarily natural gas during the summer months 12

and MISO day ahead and spot purchases As mentioned previously PV generation offsets 13

marginal intermediate load following and peaking power plants on the MISO system which we 14

assume are natural gas fired combined andor single cycle combustion turbines 15

By building PV generation into its low voltage distribution system WPL will directly 16

avoid MISO purchased power costs at the margin These costs include energy capacity 17

ancillary services (scheduling and dispatch reactive supply and voltage control regulation and 18

frequency response and operating reserves) and the costs of wheeling purchased power in 19

addition to the avoidance of line losses discussed previously 20

As PV is deployed on a large scale these avoided purchased power costs will be 21

significant Large-scale PV deployment can have the effect of stabilizing or even reducing 22

locational marginal prices (―LMP) This is due to the fact that PV will reduce MISO-wide 23

system demand during peak and intermediate load periods thus reducing the need for power 1

from higher marginal cost units which are predominately older natural gas fired generation units 2

Not burning natural gas in MISO-dispatched higher-marginal-cost units will also save natural gas 3

for more beneficial uses 4

Q Were you able to quantify the impacts of offset power purchases from DPV on MISO 5

Locational Marginal Prices and overall cost reductions to WPL 6

A No we were not MISO LMP prices are hourly prices that are dependent on a myriad of 7

variables including weather unscheduled plant outages load variability and host of others 8

which make forecasting of LMP prices nearly impossible without a Production Cost Model 9

loaded with WPL and MISO system data Rather we suggest as part of our recommended RampD 10

agenda that WPL perform production cost modeling incorporating DPV resources to determine 11

the offset quantities and costs of WPL generation and purchases and that WPL work with MISO 12

in determining the impacts on LMP at increasing levels of DPV deployment 13

TOPIC 4 14

Value of Avoided Power Plants 15

Q Might this strategy impact natural gas plant investments 16

A We have proposed that the PV resource be used to offset all future growth in the peak demand 17

as forecasted by WPL If PV is developed at that rate then it will avoid the construction of 18

additional natural gas-fueled combustion turbines on the MISO system We assume these 19

combustion turbines would cost on the order of plus or minus $1 million per MW While these 20

turbines may not be on the WPL system these cost savings will accrue to MISO dispatched 21

power resources 22

This is a round number estimate and is not meant to be more precise A more precise 1

estimate would require assessing the timing of the plant deferral estimating the increasing cost 2

of turbine deployment (inflation in steel concrete and other commodities as well as regulatory 3

costs) and the effect of discounting a future investment 4

TOPIC 5 5

Value of Avoided Distribution System Costs 6

Q Please explain how PV investments can produce cost savings in the distribution systemrsquos 7

capital investment program 8

A Peak demand growth drives marginal investment in the distribution system Distribution 9

infrastructure components that are near capacity limits on the peak will require investment to 10

upgrade their capacity If peak demand growth can be managed and the distribution components 11

are able to serve the underlying base and intermediate loads for some number of years without 12

being upgraded to serve a growing peak then substantial capital investment can be deferred or 13

avoided 14

As an example assume a 10 MW feeder is peaking at 96 MW and growing at about 2 15

percent (200 kW) per year Under standard practice the utility might re-conductor that feeder so 16

it would support a 15 or 20 MW peak demand Assuming constant load growth this would 17

provide 25 to 50 years of distribution capacity for the load to grow into 18

An alternative investment strategy would be to install several hundred kW of distributed 19

PV capacity each year to serve loads on that feeder This ―pay as you go strategy would keep 20

the peak load from exceeding the capacity of the line for some years depending on how the 21

underlying loads grow The deferred cost of the distribution capacity upgrade helps to pay for 22

the PV investment though it does not pay for all of it These incremental PV investments avoid 23

the financial risk of overbuilding the distribution system which could become stranded assets if 1

load growth slows or declines 2

Q What are the relative risks of these two approaches to upgrading the distribution system 3

A Under the standard practice the risk is that the new upgraded feeder would be permanently 4

overbuilt if load growth slows or declines Several factors that could cause such reversal 5

include 6

A much greater emphasis on energy efficiency as a response to climate policy which 7

would affect the loads across the peak intermediate and base-loads 8

Demand destruction due to changing economic conditions 9

Widespread installation of customer-driven PV and solar hot water systems 10

Widespread adoption of other technologies that allow much greater control of the 11

system peak and underlying loads 12

Under the PV scenario the converse risk is faster than forecasted growth of intermediate 13

and base-load demand Within limits this risk can be averted by a contingency plan to deploy 14

more PV faster This is feasible as PV is relatively quick to site and build Yet if growth 15

persists beyond the forecasted magnitude the utility could require the feeder to be upgraded 16

earlier than planned This would reduce the deferred or avoided-cost of the infrastructure made 17

possible by the PV capacity hence reducing the overall economic value of PV on that circuit 18

Q Can you recommend a cost-effective strategy to hedge against the risk that load growth on 19

a selected circuit could be quicker than anticipated 20

A One risk management strategy would be to design the PV installation to be portable If load 21

growth outstrips its usefulness on one circuit it could be moved to serve another peak load 22

management opportunity The additional labor costs would be greatly offset by the ability to 1

capture deferral or avoided cost values at multiple sites over the PV systemrsquos 30-year useful life 2

Q Are there additional concerns related to the design and operation of PV deployed to 3

address distribution system capacity needs 4

A Yes The PV system must be designed and operated in a way that assures that the PV together 5

with integrated demand response load control or energy storage will provide a highly available 6

and highly reliable resource during the peak hours when it is needed While the general 7

correlation between the solar resource and peak and intermediate loads is sufficient to produce 8

significant fuel cost savings and integrated demand-side measures increase this value a close 9

correlation is required to capture the value a distribution deferrals Planning criteria to address 10

this need include 11

PV capacity siting ndash The capacity must be on the correct circuit and there may be sites 12

that are superior from engineering operations and safety perspectives Some projects may be 13

sited at substations but many other locations (utility-owned or leased from customers) would 14

also be used 15

Timing ndash The capacity must be constructed in time and consistently year-to-year to 16

enable distribution planners to continuously defer the upgrade 17

Scale ndash The added PV capacity has to be large enough each year to offset annual peak 18

load growth 19

PV output matched to the peak hour ndash The capacity has to be oriented to serve the 20

distribution plannerrsquos interest To meet a summer peak this could mean deploying both fixed-21

and single-axis tracking PV systems to match maximum PV output with the late afternoon and 22

early evening peak demand hours 23

PV operations and maintenance ndash The PV system including panels inverters and 1

other equipment must be kept in good working order This is not difficult a well-designed 2

preventive OampM program will help assure that the resource will be available when needed on 3

peak 4

Distribution grid integration ndash Like any distributed resource DPV must be integrated 5

into the grid in ways that manage safety and reliability issues Research and demonstration of 6

integration methods and tools by US DOE regional utility collaboratives and others indicates 7

that a significant amount of DPV can be added to the local grid today9 8

High availability ndash On the WPL system the solar resource will readily address peak 9

hours in the afternoon early evening peak hours present a greater challenge Furthermore 10

depending on the geographic diversity of systems and specific weather conditions (eg passing 11

clouds) PV output can vary The utility will need one or more alternatives in its distribution 12

deferral plan to virtually ―firm the solar resource 13

Q Please explain ways to effectively firm the solar resource and whether such strategies have 14

been proven 15

A Extensive work has been done on this topic by the US DOE California Public Interest Energy 16

Research Program (―PIER) SEPA and associated utilities confirming that PV integrated with 17

relatively simple demand-side strategies can be a highly available resource for meeting peak 18

demand on utility grids10

This approach uses one or more dispatchable resources such as 19

demand response automated load control thermal energy storage or electric energy storage 20

9 A series of useful studies have been published under the DOE Renewable Systems Interconnection (RSI) project beginning

in 2007 Fourteen relevant studies under this effort are referenced in ―Renewable Systems Interconnection US DOE in

collaboration with EPRI NREL and Sandia National Laboratory (draft October 2007) 10

See PHOTOVOLTAIC CAPACITY VALUATION METHODS Solar Electric Power Association Report 02-08 Tom

Hoff Clean Power Research Richard Perez State University of New York at Albany JP Ross Sungevity Mike Taylor

Solar Electric Power Association The process to develop this report involved extensive utility involvement including

representation from Wisconsin

located on the targeted circuit This can be as simple as air conditioner cycling lighting controls 1

and other proven cost-effective strategies We are aware of projects in locations from California 2

(sponsored by PIER) to Massachusetts (sponsored by the MassTech Collaborative) that are 3

demonstrating such PV firming strategies Further real-time monitoring and control systems 4

that are designed to modulate customer loads in response to real time events such as passing 5

clouds over PV systems are on the market today 6

Q Is the advanced metering infrastructure (AMI) that Alliant proposes compatible with the 7

DPV program that you propose 8

A Yes Based on product literature and testimony provided by WPL the AMI program that WPL 9

is currently deploying is compatible with a PV-integrated distribution-level load control strategy 10

As utilities gain more experience operating smart grids PV other distributed generation storage 11

and load control may be orchestrated to serve this need Our recommendations include specific 12

RampD to help WPL match its specific AMI capabilities to these needs 13

Q Can you estimate the value of distribution project deferrals for WPL 14

A Yes A 2001 study by staff at the Regulatory Assistance Project (―RAP) of 124 utilities during 15

1995-1999 found average annual distribution plant investment of $64 billion per year 16

translating ―into an annual revenue requirement increase per year on the order of $1 billion to 17

$15 billion11

(Italic and bold in original) These investments are driven by peak demand 18

growth that pushes the distribution system beyond its rated capacity 19

The RAP authors constructed a statistical estimate of the economic value of deferring 20

upgrades to the distribution system for each utility in the study Their data were from the 1995-21

99 FERC Form 1 reported by each utility plus a detailed distribution system construction budget 22

DISTRIBUTION SYSTEM COST METHODOLOGIES FOR DISTRIBUTED GENERATION September 2001 Wayne

Shirley et al The Regulatory Assistance Project

from Commonwealth Edison (―Com Ed) The distribution expenses were allocated to two 1

groups lines and feeders expenses were grouped together and substation and transformer 2

expenses were grouped together Using standard deviations in the Com Ed data set high-cost 3

and low-cost project estimates for each utility were statistically derived Deferral value tables 4

were developed for each utility that indicate the present value of deferring distribution projects 5

for each year over a thirty-year period 6

Lines and feeder projects are inherently more expensive than substation and transformer 7

projects and thus had greater deferral value In addition where the feeders are underground or 8

have otherwise challenging construction issues such as rough terrain and long distances the 9

costs for line and feeder construction skyrocketed 10

For WPL the results of the RAP study are presented as Exhibit___ JDB-4 The results 11

are useful in estimating a plausible value for deferring ―high-cost distribution system upgrade 12

projects For example Table 3 presents the values of deferring high-cost wires and feeders 13

projects in $kW NPV for several selected years 14

TABLE 3

Value of Investment Deferral for WPL High-Cost

Wires and Feeders Projects for Select Years

Years deferred NPV $kW

5 $465

10 $722

15 $861

20 $935

Source Regulatory Assistance Project

Q How can WPL use this information strategically to plan PV system investments 16

A We expect that WPL will have a population of lines and feeders and substations and transformers 1

that need to be upgraded each year to serve peak demand growth Those are the parts of the 2

distribution infrastructure where PV investments can be strategically targeted and the economic 3

value of deferring or avoiding distribution system upgrades will be greatest 4

WPL also will have lines and feeders and substations and transformers that have been 5

upgraded andor that have plenty of surplus capacity These would have no deferral value Still 6

PV might be planned and implemented years later on these distribution components after the 7

higher value strategic installations have been addressed Also given the high marginal cost of 8

MISO energy that PV offsets these non-strategic parts of the distribution system may still be 9

considered for solar development to offset high cost generation resources from the MISO grid 10

A third area for development of this strategy will be in connection with WPLrsquos emerging 11

smart grid program The utility can gain valuable experience now optimizing distribution grid 12

design and operation in relation to DPV 13

Q Could you provide an example where a utility found benefits in its distribution system from 14

distributed energy resources such as PV 15

A Yes For example a 2004 study funded by the California Energy Commissionrsquos Public Interest 16

Energy Research Program (―PIER) analyzed Silicon Valley Powerrsquos distribution system12

Peter Evans used AEMPFAST13

software to identify high value locations where distributed 18

energy resources such as distributed generation load management and capacitors could be 19

installed to improve the performance of the distribution system 20

The study concluded that distributed energy resources on specific high value locations in 21

the distribution system produced network benefits from the local circuit all the way up to 22

California Energy Commission PIER Project 500-01-039 Distributed Energy Resources Benefits for the Power Delivery

Network SVMG Energy Summit IV May 2004 Peter Evans 6509484546 infoNewPowerTechcom 13

httpwwwotiicomaempfasthtm

regional transmission Benefits included reduced real power losses at 3 times the systems 1

average loss rate reduced reactive power consumption reduced voltage variability and potential 2

avoidable or deferrable network upgrades The study found these benefits to be demonstrable 3

and quantifiable This and other research has informed current demonstration projects including 4

projects in Boulder Colorado San Diego California and Marshfield Massachusetts14

Q Please summarize the research you recommend that would be required to initiate this 6

strategy 7

A A number of research tasks will be recommended One is to identify locations on the 8

distribution system (lines and feeders substations and transformers) that meet the criteria for 9

deferral such as steady slow load growth or construction constraints and reliability concerns A 10

concurrent project would engage WPL engineering staff to review PV integration research and 11

tools currently available so that they could prioritize PV investments to address those needs and 12

constraints The result should be a prioritized project list that defines the strategic PV 13

investments on a year-by-year project-by-project basis Potential locations for PV installations 14

should be identified and mapped These could include utility properties rights of way 15

brownfields public facilities customer rooftops and parking areas and other locations on the 16

circuits of interest 17

TOPIC 6 18

Renewable Energy Credits and Environmental and Carbon-Reduction Benefits 19

Q Are there quantifiable environmental benefits from the utility DPV strategy that yoursquove 20

described 21

―N-Star Tries for Zero Load Growth in Massachusetts Town Restructuring Today online edition

(wwwrestructuringtodaycom) April 4 2008

A Yes there are environmental compliance benefits in terms of REC values on the compliance or 1

voluntary (green tag) market and there are avoided costs associated with the reduction of 2

regulated emissions In addition there are avoided costs associated with reduced greenhouse gas 3

emissions though these values will be primarily realized in the future 4

Q Please explain your analysis of the value of RECs that the solar strategy would make 5

possible 6

A A REC represents the environmental attributes of one MWh of renewable energy generation 7

RECs are used by utilities in some states to comply with Renewable Portfolio Standards This is 8

the compliance market They are also bought and sold in voluntary markets 9

There is no requirement in the Wisconsin RPS for a fraction of renewable energy 10

development to be from solar energy In other states this is sometimes called a ―carve-out for 11

the solar resource and it creates an in-state compliance market for solar RECs The New Jersey 12

solar carve-out legislatively capped solar REC value at $300 per MWh RECs have traded at 13

nearly that value in the New Jersey compliance market 14

RECs are a surrogate for the value of avoided emissions of NOx SOx mercury and 15

particulate matter as well as greenhouse gases We think the future value of solar RECs will 16

undoubtedly increase due to growing RPS policies growing voluntary green power markets and 17

the introduction of carbon and other emissions trading which will increase the value of solar 18

RECs 19

Since a solar carve-out does not exist in Wisconsin we looked at the voluntary market for 20

solar RECs and estimated the voluntary REC values for low- medium- and high-value 21

scenarios based on current markets The dollars per MWh values we used are $10 for the low 22

$20 for medium and $30 for the high REC value scenario We then multiplied the number of 23

MWh produced by one MW of PV for one year by each of the assumed REC values Table 4 1

provides the annual value for both types of solar system designs (fixed-tilt and single- axis 2

tracking) in Wisconsin for each of the assumed REC values 3

TABLE 4

Annual Voluntary Market Solar REC Values for One MW PV

Low Medium High

Fixed Tilt $12600 $25200 $37800

Single Axis $14490 $28980 $43470

We escalated these values at 35 per year and multiplied by the thirty-year life of the PV 5

system to arrive at the following 6

TABLE 5

Lifecylce Voluntary Market Solar REC Economic Value 35 Escalation Over 30 Years

Low Medium High

Fixed Tilt $616276 $1232552 $1848828

Single Axis $708717 $1417435 $2126152

Whether the solar REC market or the carbon market will evolve in a way that produces 8

much higher values is open to speculation What can be said with some certainty is that the 9

value of saved carbon will continue to increase particularly in the event of carbon cap-and-trade 10

or carbon tax regulation and electric generators will probably have to offset their carbon 11

emissions or pay for carbon credits in the open market 12

Q What are the carbon dioxide savings associated with the PV designs that you evaluated 13

A We evaluated the annual energy production of both fixed-tilt and single-axis tracking PV 1

systems We then multiplied the annual energy production by the weighted average heat rate of 2

WPLrsquos natural gas fired generators and by 10538 to account for TampD line losses The result is 3

the amount of natural gas in million BTUs that the PV resource offsets annually We then 4

divided the total mmBTU of gas by the CO2 coefficient 117 pounds of CO2 per mmBTU This 5

provided the total pounds of CO2 and that number was divided by 2000 to yield tons of reduced 6

CO2 per PV MW per year The result of this calculation is 7

Fixed tilt system = 10539 tons of reduced CO2yearMW 8

Single-axis tracker = 12115 tons of reduced CO2yearMW 9

Q Were you able to quantify the dollar value of these savings 10

A We developed estimates of the dollar savings attributable to carbon reduction from avoided 11

natural gas generation resulting from PV production We utilized a low medium and high 12

scenario for values of carbon in our analysis based on the values selected by Xcel Energy in 13

Minnesota for use in its resource planning process These values are $9 $20 and $40 per ton of 14

CO2 Using these values as a base we escalated the value by 35 per year over the 30 year life 15

of the PV system resulting in a range of carbon values for a 1 MW PV system of 16

Fixed tilt system 17

Low carbon cost ($9ton) $ 585000 18

Mid-range carbon cost ($20ton) $1295000 19

High carbon cost ($40ton) $2590000 20

Single-axis Tracking System 21

It is important to note that these carbon values are speculative since no market currently 2

exists to facilitate trading However it is prudent business practice to examine realistic values 3

for carbon to gauge its impact on resource planning decisions in the event that carbon emissions 4

are regulated in the future It is also important to not ―double count RECs and carbon values 5

Q Is this a conservative analysis 6

A Yes It is based on the weighted average heat rate of the gas-fired generators The actual CO2 7

savings will be greater because the PV capacity will offset at the margin the least efficient of the 8

gas generator fleet Some of these marginal generators have heat rates considerably greater than 9

the weighted average Additionally we believe line losses would likely be greater than WPLrsquos 10

average of 538 percent particularly on hot days 11

Q Are there other environmental benefits associated with implementation of a DPV strategy 12

A Yes The fuel source for PV is the sun and the resource is emission-free One reflection of this 13

is a streamlined permitting process for PV plants which can be highly valuable relative to 14

process for permitting other kinds of generation Solar PV also offers an increasingly important 15

benefit because it does not require cooling towers or reservoirs This conserves water and 16

protects water ecosystems 17

In addition as significant levels of PV are implemented it would eliminate the need for 18

generation from older dirtier generation facilities This translates into additional savings from 19

avoiding the need to upgrade older facilities with environmental control technologies As 20

detailed in WPLrsquos application in this rate case multi-emissions air quality compliance costs are 21

estimated at $150M in 2009 $180M in 2010 and $300-$400M in the years 2011 through 2018 22

While the PV deployment strategy detailed in this testimony will not have impacts on these 23

environmental costs during the 2009 and 2010 test years significant build-out of PV generation 1

could reduce the $300-400M in planned environmental compliance expenditures through 2018 2

Large-scale implementation of PV as part of an emissions-reduction strategy is directly in line 3

with WPLrsquos plan to invest in emissions-reduction technologies as its primary compliance 4

strategy rather than to rely on purchases of emission allowances 5

It should also be noted that all of WPLrsquos multi-emission control plans and costs that are 6

detailed in its application under this docket are directed at SOx NOx and mercury emissions 7

and are proactive in anticipating future regulations of these pollutants In the same manner 8

WPL should proactively address anticipated future regulations and costs related to carbon which 9

are widely anticipated WPL should consider the high value of PV in addressing current and 10

future environmental regulatory requirements 11

Q Can DPV provide immediate environmental benefits within the WPL service area 12

A Yes in addition to reducing environmental costs of compliance the DPV strategy can also 13

directly reduce levels of criteria pollutants including offsetting NOx emissions from the high 14

heat rate natural gas plants its displaces on the margin NOx is a precursor to both ozone and 15

fine particulate matter Wisconsin will be subject to significant reduction measures for these 16

criteria pollutants as more counties are facing nonattainment status under the new 8-hour ozone 17

and fine particulate matter national ambient air quality standards For example Dane County 18

(Madison) has violated the PM25 24-hour standard of 35 micronsm3 for each of the past three 19

years and is expected to be designated as a nonattainment area later this year by the EPA 20

According to the FEIS for Alliantrsquos proposed Nelson Dewey power plant several counties in 21

WPLrsquos service territory including Dane County and possibly Columbia and Grant Counties are 22

facing nonattainment status As such DPV can play a direct role in reducing the emissions that 1

are the precursor to the criteria pollutants that are facing increasing regulation in the region 2

TOPIC 7 3

Procurement Methods That Add Value 4

Q Are there any specific procurement methods that can add value to the overall strategic 5

utility DPV plan 6

A Yes As stated in the opening section of this testimony utilities are beginning to procure solar 7

resources through new business models beyond simply accepting customer-owned PV as it 8

appears on the system The first step in this evolution has been increased use of power purchase 9

agreements whereby utilities have established purchase contracts with solar independent power 10

producers We believe a next-step development model that uses the Federal Investment Tax 11

Credit (―ITC) and five-year accelerated depreciation under the Modified Accelerated Cost 12

Recovery (―MACRS) is an especially good fit for utility DPV 13

Q Please define the ITC and five-year accelerated depreciation under MACRS 14

A The Federal ITC is a 30 tax credit on the capital cost of installing a solar energy system 15

MACRS is an accelerated depreciation schedule where the solar asset is depreciated on Federal 16

income taxes over a 5-year term MACRS depreciation is worth on its face about 29 of the 17

capital cost of the solar asset though investors discount the depreciation asset because it flows 18

over a five-year period Depending on investor economic requirements the MACRS could be 19

worth on the order of 20 in present value 20

The 30 ITC is scheduled to expire at the end of 2008 and will revert to a 10 ITC 21

unless it is extended by Congress Under that current legislation utilities are prohibited from 22

directly using the ITC for solar projects However most observers in the industry expect this or 23

the next Congress to extend the 30 solar ITC for up to eight years and possibly to enable 1

utilities to use the ITC directly For the purpose of the following discussion we assume the 30 2

ITC and the associated accelerated MACRS will be extended and that it may or may not apply 3

directly to utilities 4

Q Please describe how WPL could make use of the ITC and MACRS 5

A Many solar energy systems today are developed using a structured project finance model called a 6

―third-party flip This project finance structure was adapted from the wind industry and is now 7

used in the solar industry In these transactions a Limited Liability Company (―LLC) is created 8

to develop one or more solar projects The LLC includes two membersmdasha developertax-equity 9

investor and the eventual owner which in this case could be the utility Each party contributes 10

capital to the deal 11

In the first six years the tax-equity investor receives 99 of the cash and tax benefits of 12

the business and the other party 1 percent Sometime in the sixth year the ownership 13

structure flips the tax-equity investor receives 5 of the cash flow and the utility receives 95 14

At that point the utility has an option to buy out the tax equity investor at the solar systemrsquos fair 15

market value times the tax-equity partnerrsquos ownership percentage 16

The benefit of using this model for solar project finance is that it can enable the utility to 17

acquire solar energy capacity at an attractively discounted cost We consulted one expert in the 18

solar industry who has closed project financings using this method She estimated that capital 19

cost savings on the order of 50 could be realized15

We would be more conservative for the 20

purpose of our testimony and estimate that the utility could acquire solar energy capacity at a 21

40 reduction in the capital cost 22

Personal communication July 23 2008 with Sandra Walden Principal Commercial Solar Ventures LLC Portland

Oregon As an example CSV recently closed third-party tax-equity financing for the Portland Habilitation Centerrsquos 07 MW

solar roof project

Q Can you give a more precise estimate of the capital cost savings the utility could expect 1

A No The actual number depends on the exact design of the system the details of the financing 2

structure and the rate of return required by the tax equity investor A detailed pro forma 3

supported by legal accounting and tax opinions is required to establish the exact details Yet it 4

is clear that a third party tax-equity finance model could yield a substantial discount to the capital 5

cost 6

Q Then what would it be worth in the range that you have estimated 7

A Assume the cost of installing a MW of solar capacity in a fixed-tilt array is $65 million If third-8

party flip financing produces a net 40 discount then the reduction in capital cost is $26 9

million That is the effective cost of the PV capacity after the tax equity financing is $39 10

million For a single axis tracking system we assume the installed cost is $7 million the value of 11

the 40 discount is $28 million and the net cost is $42 million If the discount is greater than 12

40 then the value will be proportionately greater for each 13

Q What next steps do you recommend with regard to this issue 14

A The question of how to most cost-effectively finance and access the ITC should be considered as 15

a high priority part of the RampD program we will propose The RampD budget should be sufficient 16

to retain legal accounting and tax representation to provide verification of the specifics of the 17

assumptions for the project finance structure and to assist the Commission in vetting this model 18

Q Have you examined whether Wisconsin Law and regulation permits this type of project 19

finance structure 20

A No We assume that research on the Wisconsin legal and regulatory requirements will be part of 21

the collaborative RampD phase If barriers exist in Wisconsin law or regulation then those barriers 22

should be identified and addressed 23

TOPIC 8 1

Total Benefits in the Analysis 2

Q Please summarize the costs and benefits of the solar resource that you analyzed in this 3

testimony 4

A Table 6 summarizes the costs and benefits of the solar resource that we analyzed for this 5

testimony We calculated the annual energy and peak day capacity values of two types of solar 6

designs south facing fixed-tilt and single-axis tracking systems We then calculated several 7

categories of avoidable costs that the DPV could offset and we identified low medium and high 8

value scenarios for most of them The numbers in the Table are rounded to highlight significant 9

digits 10

TABLE 6

Summary of PV Costs and Benefits

1 MW Scale $ millions 30 year WPL

---------- PV System Design -----------

Fixed Tilt Single Axis Tracker

PV System Capital Costs $65 $70 Less 3rd party ITC and MACRS $26 $28 Net PV Installed Cost $39 $42

PV System Benefits Fixed Tilt System Single Axis Tracker

Value Scenario Value Scenario

Low Medium High Low Medium High

Natural Gas Savings $36 $49 $69 $41 $57 $79

Avoided gas turbine $10 $10 $10 $10 $10 $10

Distribution system Wires amp feeders $01 $05 $10 $01 $05 $10

Transformers amp substations $00 $01 $01 $00 $01 $01

Solar RECs $06 $12 $18 $07 $14 $21

Subtotal Benefits $53 $77 $108 $59 $87 $121

Net Benefits $14 $38 $69 $17 $45 $79 Benefit cost ratio 136 197 277 140 207 288

Q What are the results of your analysis 2

A The benefits substantially outweigh the costs of the solar energy systems even in the low 3

economic value scenario For both types of PV systems the benefits in the high value scenario 4

exceed the costs by nearly 3 to 1 with BC ratios of 277 and 288 respectively When scaled to 5

the 517 MW PV resource we recommend the net capital investment for the strategy described is 1

about $21 billion and the net benefits are about $38 billion CO2 savings amount to an 2

estimated 175 million tons We conclude that the solar resource appears to be robustly cost-3

effective 4

Q Do you view the results presented in Table 6 as conservative and if so why 5

A Yes the results are conservative for several reasons 6

In our view the low gas price scenario is unrealistic We included it because it is based 7

on the Annual Energy Outlook of the Energy Information Administration Gas price 8

forecasts from that source historically have been low compared to prices in the market in 9

fact the EIA computes that its natural gas price forecasts have an average absolute 10

percent difference of 635 percent compared to the actual prices over the last 25 years It 11

may well be that the Medium and High gas price forecasts we used are also low 12

depending on a wide variety of factors We note that the Japanese are now paying $20 13

per million BTU for liquefied natural gasmdashmore than three times the AEO forecast more 14

than double the medium forecast and more than $7mmBTU above the high forecast that 15

we considered 16

The gas savings are based on the weighted average heat rates of the WPL gas-fired 17

generation fleet not the heat rate of the marginal gas turbine that the PV resource offsets 18

This understates the quantity of gas saved at the margin and hence understates the value 19

of the gas savings under all of the scenarios 20

The value of solar RECs is most likely an incomplete reflection of the value of carbon 21

offsets We think the value of zero-carbon energy resources going forward will increase 22

significantly beyond the value given in the table 23

Numerous utility benefits summarized in Table 1 in the Scope of Testimony above are 1

potentially quantifiable but were not reviewed for this analysis Including additional net 2

benefits would increase the benefitcost ratios and make the results even more robust 3

Our analysis uses all-in costs for one-MW scale DPV at todayrsquos prices This is 4

conservative as the solar industry has demonstrated consistently falling costs along the 5

lines of 20 for every doubling of PV industry capacity for the past 40 years Moreover 6

PV manufacturing breakthroughs resulting in dramatic cost declines are highly likely in 7

both solar modules and inverters Product lifetimes of greater than thirty years have been 8

demonstrated Yet we point out that DPV is a highly favorable investment at todayrsquos 9

prices for the applications that we discuss There is no reason for WPL to delay these 10

investments or to delay establishing a long-term value-based solar investment plan 11

Q Are there additional benefits from this program that may not accrue directly to WPL but 12

are recognized as public benefits 13

A Yes There are numerous public benefits from this program It would directly support 14

Wisconsinrsquos Task Force on Global Warming consensus goals including to increase the 15

Wisconsin RPS goal to 25 by 2025 and to reduce carbon emissions to 1990 levels by 2025 It 16

would support numerous other state environmental goals especially in terms of air quality 17

Because the solar DPV strategy is integrated with demand-side strategies supports smart 18

grid development and complements other renewable resources it will drive initiatives in these 19

areas as well Ultimately the finely tuned integration of all these strategies will help to redefine 20

utility energy services for the 21st century 21

The continuing role for customer-owned solar resources is discussed later in this 22

testimony While utility DPV business models are different from the typical customer-driven PV 23

business model the two are in many ways mutually supportive Customer-driven solar will 1

benefit from the utilityrsquos massive investment in the solar industry and from the call for a large 2

well-trained solar work force According to a study for Vote Solar by University of California 3

Berkeley PV created 20 manufacturing jobs and 13 installation and maintenance job-years per 4

MW installed16

We did not complete a rigorous review of job creation for this testimony but 5

there is widespread evidence that PV has strong economic development potential for Wisconsin 6

It is also likely that customers from the commercial industrial agricultural and 7

residential sectors will all have opportunities to participate in helping to meet utility solar goals 8

often by leasing roof space or land and sometimes through power purchase agreements 9

Customers who cannot host solar cost-effectively at their sites will be de facto participants 10

sharing in the initial costs and the continuing benefits of this universal strategy This strategy is 11

highly compatible with community goals 12

Q Are any factors omitted that would drive the results in the opposite direction 13

A Yes We did not include the cost of financing the PV systems the cost of land to site them or 14

other tax effects such as deductibility of fuel for federal income tax purposes These would all 15

need to be included in detailed pro formas and comparisons necessary to implement specific 16

projects With regard to land costs we note that these could range from near zero if using 17

existing utility land and rights of way public land or brownfields to higher costs if leasing 18

commercial real estate such as rooftops or parking lots We also did not include the costs of 19

implementing load management or demand response programs to firm the PV resource during 20

peak demand hours WPLrsquos AMI investments and ramped-up DSM efforts will support that 21

capability though some additional investment may be needed 22

―Job Creation Studies in California for Vote Solar by J Ban-Weiss D Larsen et al for Vote Solar Fall 2004

We also did not include maintenance or system repair costs Maintenance of PV systems 1

is typically less than one-half of one cent per kWh of production New generations of long-lived 2

inverters are coming on the market for the utility sector which will further reduce maintenance 3

and repair costs 4

TOPIC 9 5

Recommendations for WPL Distributed PV Strategy 6

Q Please summarize your recommendations as a result of this analysis 7

A Our analysis indicates that meeting peak demand growth is a transitional strategy for WPL 8

which brings significant economic benefits to the utility its customers and its stakeholders 9

while beginning to develop the long-term market potential of DPV To initiate this program we 10

recommend a process for refining this analysis and providing needed research led by WPL 11

working with MISO the PSC the state public-benefits program and other stakeholders That 12

process will swiftly move toward pilot program implementation and full-scale DPV deployment 13

We anticipate deployment of 10 MW of PV by 2010 followed by 25 MW in 2011 and 50 14

MW in 2012 At that point we believe WPL will be positioned to meet its forecasted peak 15

demand growth of 23 per year through an integrated DPV program Based on that 16

assumption deployment in 2013 will be 77 MW Total DPV deployment over 10 years would 17

be 517 MW Table 7 summarizes the 10-year deployment schedule 18

We also recommend an RampD program that would be central to the WPL deployment 19

strategy We believe the RampD process outlined here will guide WPL working with the 20

interested parties to develop its own targets for the appropriate timeframes based on the value 21

of solar as a cost-effective peaking and intermediate resource As this strategy evolves in a 22

changing market and policy environment it may be feasible to achieve more than suppressing 1

peak growth DPV may begin to reduce the historic peak 2

TABLE 7

Suggested 10-year Deployment Schedule for WPL DPV

Implementation Year Incremental Solar Mega Watts Total Solar MegaWatts

2009-2010 10 MW 10 MW

2011 25 MW 35MW

2012 50 MW 85 MW

2013 77 MW 162 MW

2014 84 MW 246 MW

2015 86 MW 332 MW

2016 91 MW 423 MW

2017 94 MW 517 MW

Q Do you recommend specific strategies for WPL to acquire and deploy these solar 4

resources 5

A This DPV capacity may be acquired and deployed in a number of ways 6

Utility investments (through Alliant Energy) to develop solar capacity tied into the 7

low-voltage distribution system to offset spot purchases from MISO 8

Utility investments (through Alliant Energy) tied into the high voltage transmission 9

system and selling into MISO 10

Purchases of customer-owned solar resources via feed-in tariffs for residential 11

commercial industrial customers and third-party developers of solar capacity on the 12

Power purchase agreements with independent power producers on the distribution 14

system 15

Q Can you describe the RampD program that is needed to support this strategy 1

A Yes We recognize that the utility cannot implement a plan of this scale and complexity without 2

sufficient RampD time and attention Also the Commission is likely to require a significant due 3

diligence effort We recommend a collaborative to include WPL PSC staff MISO the public 4

benefits program and other interested parties and stakeholders Their task will be to design 5

implement and evaluate necessary RampD and pilot implementation and to foster DPV 6

deployment in a timely and cost-effective manner 7

During the first two yearsmdashthe term of this rate casemdashthe emphasis will be upon forming 8

the collaborative and completing due diligence RampD The Wisconsin Distributed Generation 9

Collaborative may provide some resources and models for this effort though we believe it 10

should not directly involve other utilities in order to simplify funding and direction The work-11

plan should develop an in-depth understanding of the role of strategic solar in the utility resource 12

mix identify and resolve key questions and issues associated with PV deployment compile all 13

required utility system and cost data and perform economic-engineering analyses and build the 14

capability within the utility and among the stakeholders to efficiently acquire and deploy the PV 15

resource and account for costs and benefits The recommended pilot program is of significant 16

scale and should be initiated early within the 2009-2010 horizon Field experience is critical to 17

solar deployment on a large scale 18

Q Can you offer details of research topics for this effort 19

A Yes We recommend research in six topic areas 20

1 PV Resource Fit 21

Perform PV system design optimization analyses to maximize PV system value for the 1

utility based on optimal orientation and mounting schemes module types scale timing 2

integration with load management and other firming techniques 3

Perform system integration analyses and reference existing research to model and remedy 4

or accommodate solar resource variability in the seasonal daily hourly and minute-to-5

minute timeframes 6

2 Distribution System Value Analysis 7

Conduct utility distribution system analyses to identify substations feeders and 8

circuits where the PV resource can provide economic and engineering value 9

Identify implementation issues including any regulatory barriers cross-departmental 10

project management issues etc and devise solutions 11

3 Distribution System Integration including demand-side firming 12

Conduct technical and market-based research on the integration of PV with other non-13

carbon resources including load control demand-side management and energy 14

efficiency This should include integration with smart grid design and operation 15

Integrate WPL AMI system with best available technologies for PV system 16

communications and control in a field test setting 17

4 Regional Resource Integration including MISO 18

Conduct production cost modeling utilizing WPLrsquos and MISOrsquos existing models and 19

inputs to analyze hourly seasonal annual and multi-year impacts of increasing levels 20

of PV deployment in various strategic design configurations including load 21

reductions of conventional generation coal and natural gas fuel and cost savings and 22

capital cost savings from deferral or avoidance of future power plant construction 1

costs 2

Develop standardized monitoring and evaluation (―MampE) and capacity valuation 3

protocols to provide for consistent and accurate analysis of PV impacts on the WPL 4

system and MISO work with MISO staff on this task 5

5 Solar Resource Acquisition and Marketing 6

Explore and develop strategies for alternative financing and ownership options of PV 7

including third party tax-leveraged ―flip or ―lease-to-own mechanisms and utility-8

owned third party owned and customer owned options 9

Based on completed RampD efforts and identified options for strategic PV deployment 10

develop model RFPs RFQs and other procurement documents 11

Conduct research to identify high value markets for solar RECs including markets 12

outside of the WPL service area and Wisconsin which may have a higher monetary 13

value to maximize returns on investment from PV capital expenditures Integrate 14

this research with emerging carbon regulations 15

6 Pilot Program Development and Implementation 16

Implement significantly scaled PV as pilot project to demonstrate the potential for 17

distribution system capital cost deferral or avoidance on feeders or circuits identified 18

as a high value opportunities for this strategy Conduct periodic MampE and report to 19

the collaborative 20

Implement significantly scaled PV on the low voltage system to displace MISO 21

dispatched resources Conduct periodic MampE and report to the collaborative 22

Publish results of collaborative RampD agenda activities and proceedings and develop 1

recommendations for future deployment of PV 2

Q What is the timeframe for completing this research agenda 3

A We believe much of this research will be useful within the early years of pilot program 4

expansion and early DPV deployment and that funding must begin under this 2009-2010 rate 5

case review We recommend full speed in initiating this agenda RampD is anticipated at minimum 6

five years with evaluation and fine-tuning funded to support continuous improvement 7

TOPIC 10 8

Rate Impacts 9

Q Are you able to characterize the rate impacts to WPL of this DPV strategy 10

A Yes During the first two years of the DPV implementation strategy which focuses primarily on 11

the RampD agenda the costs will outweigh the benefits This is because very little PV will be 12

deployed in the field initially These costs will be largely administrative research and planning 13

in nature In the context of other programs and services offered by the utility their impacts on 14

rates will be negligible However the important due diligence RampD efforts carried out by the 15

collaborative under this initial two-year budget will identify the highest value approach for 16

WPLrsquos strategic DPV program it will pay huge dividends as large-scale PV development occurs 17

in the following years 18

We have estimated costs to establish a collaborative and initiate RampD ramping up 19

quickly to approximately $1 million per year We based this on our cost estimates for key 20

research projects and on benchmarking data from a similar RampD program the Massachusetts 21

Technology Collaborative17

Refined budgets management plan and structure and a detailed 22

Personal communications Francis Cummings Policy Directory Renewable Energy Trust Massachusetts Technology

Collaborative August 6 2008

scope of work for the collaborative RampD agenda should be developed quickly to initiate the 1

collaborative should the Commission approve its creation 2

Further collaboration among separately funded and directed programs is likely to apply 3

especially in forward years For example this strategy is highly compatible with the US DOE 4

Solar America Initiative program its utility grid modernization program and other Federal 5

energy goals Yet it is important to view this endeavor as a program that WPL can pursue 6

beginning immediately with significant net benefits within a relatively short time 7

Based on the assessment of DPV costs and benefits detailed in this testimony it is 8

evident that the deployment of large-scale DPV costs far less than not doing it at all Should 9

natural gas prices continue to increase as expected the savings to WPL and its ratepayers will 10

only increase Decreasing WPL costs of natural gas generation and purchased power through a 11

DPV strategy will also have the impact of stabilizing or decreasing locational marginal pricing 12

from MISO This will provide retail rate stabilization support in addition to the stabilization 13

support provided from reduced environmental costs deferred or eliminated distribution system 14

upgrades line losses and other benefits quantified or identified in this testimony 15

We cannot suggest that utility rates will go down in the foreseeable future thanks to a 16

variety of impacts such as increasing fuel prices regulatory changes rising commodity prices 17

for construction materials etc but solar DPV provides a hedge against most of these likely 18

costs As more DPV is deployed on the WPL system the benefits of this hedge increase 19

TOPIC 11 20

Existing Programs Discussion and Recommendations 21

Q How does the value-based utility solar strategy you have described relate to the solar 1

programs for WPL customers that have been reviewed or proposed by WPL in this rate 2

case 3

A Existing and proposed solar programs for WPL customers differ in character from the value-4

based utility DPV strategy For example customer-driven solar programs tend to address 5

smaller systems with higher unit costs These systems are usually not designed to address 6

strategic utility DPV On average they have capacity value and other strategic values but they 7

are not designed specifically for utility DPV Utility efforts to influence design such as 8

orientation for on-peak production or time-of-use net metering to improve the fit between 9

customer systems and strategic needs may be achieved through incentives to target markets 10

However at the present time a range of customer solar programs with broad appeal are also 11

important to the utility its customers and stakeholders and the solar industry 12

Q What are the broader program objectives for customer-driven solar programs 13

A These programs can enhance customer service support community goals and help to build the 14

infrastructure for a rapidly growing solar market in WPLrsquos service territory This includes 15

increasing access to solar and balance-of-system equipment attracting and preparing the solar 16

workforce preparing officials who work with zoning codes and standards fostering distributed 17

generation choices educating utility staff and customers and supporting a policy dialog A 18

broad and diverse customer-based solar program can help to advance these objectives 19

Q Are there measures that WPL should take to improve the overall value of its customer 20

solar programs 21

A Yes First in addressing these programs as a whole we recommend that each program design 22

include a value-based evaluation metric This should methodically estimate key values such as 23

solar capacity value marginal energy cost savings etc As a tool this protocol can help to cost-1

justify specific solar program investments and it can help to educate customers and stakeholders 2

about WPLrsquos growing commitment to strategic DPV 3

This protocol should be in addition to the value tests that are currently used to evaluate 4

Focus on Energy solar programs from the public-benefits perspective For example the 5

calculation that is currently used to estimate the capacity value of PV looks at PV production 6

over an average of three months of summer days and times rather than using data for actual peak 7

days and times when PV energy production would likely be greatest An improved (though not 8

overly complex) methodology should be developed and applied to all WPL customer-side PV 9

systems Likewise an appropriate methodology should be developed for solar thermal (water 10

heating) installations It should estimate applicable electric or gas utility benefits as well as 11

overall energy savings 12

Environmental benefits including Renewable Energy Credit (REC) values and carbon 13

offsets should be evaluated for all customer solar programs Whether or not these values have 14

currency today WPL should track them and anticipate growing REC and carbon-offset markets 15

Q Do you recommend specific methodologies for evaluating customer solar programs 16

A No A variety of methods varying in complexity and accuracy exist18

We suggest that WPL 17

work with Focus on Energy and others to review these options 18

Q Do you have any other recommendations that apply to all WPL customer solar programs 19

A Yes The collaborative effort led by WPL which we recommend to help plan and implement 20

utility DPV RampD recommendations should extend to improving customer solar programs too 21

Focus on Energy program planning and the efforts of the Wisconsin Distributed Generation 22

The simplified methodology could be customized based on the solar value analysis in this testimony or it could be based

on other works such as those cited by the Solar America Initiative Renewable System Integration project

www1eereenergygovsolarsolar_americarsihtml

Collaborative already provide some support to WPL for this approach We recommend a 1

customer-program working group within the larger utility solar-value RampD effort This group 2

can work on program design strategies evaluation protocols and troubleshooting Further the 3

overlap between utility resource planners and customer program staff in this effort will help 4

foster the integration of customer-side resources (not only solar generation but also load 5

management and energy efficiency) in meeting future utility resource needs 6

Q Do you support WPLrsquos proposal to enhance the Second Nature green power program with 7

the addition of more solar resources 8

A In general yes We recognize that Alliant Energy and WPL are making strides in green power 9

marketing The reported 33 annual growth rate in customer participation is greater than the 10

national average among utility green power programs The reported 27 growth rate for overall 11

sales of green energy lags most recently reported national average growth rate of 39 but it is 12

moving in the right direction Alliantrsquos current premium of 2 cents per kWh for 100 green 13

power about matches the average and median premiums charged nationwide 14

The addition of more solar resources to the wind and biomass in the green power 15

portfolio for WPL is appropriate According to company literature the Second Nature program 16

is intended to create an awareness of renewable energy and stimulate development of new 17

resources with a positive impact on the economy and the environment Wind is widely accepted 18

and by some measures cost-competitive with baseload conventional resources Solar is cost-19

competitive with peaking and intermediate resources and is therefore a good complement to 20

wind in this portfolio Inclusion of solar and other renewables also prepares the utility to 21

develop the most cost-effective and strategic resource mix possible both in its green power 22

portfolio and for the utility overall 23

The addition of solarmdashespecially locally sited solarmdashto the green power portfolio 1

enhances WPLrsquos green power marketing Of the top 10 utility green power programs in 2007 2

measured by total green energy sold four included solar in their portfolios19

The popularity of 3

solar in green power offerings has been underscored by at least three utilities that have successful 4

solar-only green power subscription programs A 12 MW solar project just completed by the 5

Sacramento Municipal Utility District (SMUD) in July is already nearing its limit of 800 to 1000 6

customer subscriptions 7

Q Are there changes that you would propose to the WPL proposal to add solar resources to 8

the Second Nature portfolio 9

A Yes The challenge for WPL is to increase the amount of solar in its Second Nature portfolio 10

while offering a competitive rate The proposed cap of 200 kW of new solar would increase the 11

total share of solar in the green power portfolio from 002 to 1 Alliant Energy and WPL 12

propose to do this while at the same time decreasing the Second Nature rate premium by 50 13

Instead we recommend that WPL increase the solar portion of the portfolio to 25 resulting in 14

a total increase in installed PV capacity of 683 kW by 2010 We acknowledge that as a result 15

the corresponding rate reduction would be approximately one-third instead of one-half While 16

this would put WPLrsquos Second Nature program at a price slightly higher than that of its neighbor 17

Madison Gas and Electric we believe the WPLrsquos program will still be attractive to customers 18

thanks to its inclusion of wind biomass and local solar resources 19

Q Are there other reasons why you conclude that it is important to increase the solar portion 20

of the Second Nature portfolio above the 1 level proposed 21

A Alliant Energy and WPL have proposed that the introduction of solar resources to the Second 22

Nature program will be tied to the introduction of the ART for customers who sell all their solar 23

wwweereenergygovgreenpowerresourcestablestoptenshtml

generation (up to 50 kW per installation) into the program The ART has been set at 25 cents per 1

solar kWh effective for 10 years for solar customers and available retroactive to 2007 2

According to Focus on Energy solar projects representing more than 110 kW are already in the 3

queue to participate on this rate when it becomes available20

Under the 1 solar cap in the 4

proposed ART more than half of the corresponding 200 kW solar ―buy through 2010 is already 5

spoken for It would be difficult to evaluate the ART as an experimental rate unless the utility 6

could actually see how a variety of new solar participants are drawn to it It is also important to 7

set a higher goal for the program if the Second Nature program is to achieve stated objectives 8

such as stimulating the development of new resources 9

Q Why did you choose 25 as a preferable two-year solar target for the WPL Second 10

Nature portfolio 11

A First we did an analysis pricing the solar resource at 25 cents per kWh and incorporating other 12

confidential resource costs provided by Alliant Energy The complete analysis is available 13

confidentially to appropriate parties in CONFIDENTIAL Exhibit___ JDB-5 We concluded that 14

the utility could increase the solar portion of its Second Nature portfolio to 25 and still reduce 15

the premium by about one-third This would preserve an adequate administrative and marketing 16

budget to build a commensurate degree of program participation 17

Q Do you have any additional comments on the proposed ART and Second Nature program 18

A The ART provides a useful performance-based framework for incentivizing solar It rewards 19

actual energy production rather than the size of a solar installation or its expected production 20

This encourages quality system design workmanship and maintenance By implementing the 21

ART now WPL and its customers will gain valuable experience with a performance-based 22

Correspondence with Neils Wolter Focus on Energy August 8 2008

incentive Yet the ART has some distinct characteristics that should be carefully examined in 1

this pilot period including 2

The ART value is based on only a general PV value analysis 3

Eligible projects must be in under 50 kW which is relatively small 4

Other incentives including the Focus on Energy Rewards may be pancaked with the 5

tariff 6

It is tied to the Second Nature green power program which is otherwise defined by 7

competitive wholesale resource acquisitions 8

Arguments can be made to keep or to change each of these characteristics the right 9

decisions will depend on fine-tuning program goals and on evaluating a pilot that is big enough 10

and well enough promoted to produce measurable results One question concerning whether the 11

ART should be tied to the Second Nature program is particularly important in the context of this 12

rate case If solar were acquired on the same wholesale basis as the wind in this portfolio then 13

the program would have more internal consistency and green power customers could support 14

considerably more solar for a lower cost We tested solar wholesale pricing scenarios 15

considering the cost advantages for solar that is competitively acquired on a larger scale 16

Assuming a power purchase agreement for solar energy from a MW-scale tax leveraged 17

development Alliant could acquire solar resources today for much less than the 25-cent per kWh 18

cost of ART If the solar resources in the Second Nature portfolio were acquired through 19

competitive procurement on a similar basis as the wind resources then customers could support 20

more solar for less cost 21

The ART or a more finely-tuned feed-in tariff may be an appropriate tool for stimulating 22

customer-owned solar through Second Nature or in some other program context We 23

recommend that WPL evaluate its usefulness to make the best fit possible between program 1

goals and incentives This evaluation should be completed before the next program revision 2

Q Please comment on WPLrsquos proposed solar loan and grant programs 3

A Their stated purpose to complement Shared Savings and utility-funded Focus on Energy 4

programs is commendable Proportionally WPL trails other regulated Wisconsin utilities on 5

kW installed through the Focus on Energy PV program21

so additional efforts are advised to 6

address market barriers 7

However the proposed solar loan program was not well detailed in the submitted 8

testimony Assuming the required 10-year payback calculation includes tax benefits and 9

additional Focus on Energy rewards then some solar PV projects and many business-scale solar 10

water heating projects would be eligible but WPL has not offered information to define the 11

target market or installed solar (kW and thermal) outcome The solar aspect of the loan program 12

should be better detailed before it is approved by the PSC 13

The proposed solar grant program is also based on projects with a simple payback of less 14

than ten years No detail was provided on the types of projects targeted or on the maximum 15

grant awards per project We advise care in setting grant-award guidelines in terms such as 16

need public education value innovation or replicability Also because grants and loans are not 17

performance-based incentives we suggest more collaboration with Focus on Energy in the final 18

program design to encourage cost-effective solar project outcomes 19

Q Are there any customer solar program areas that WPL did not adequately address 20

A Yes We believe solar water heating is an appropriate and potentially cost-effective option for 21

WPL customers which is not well addressed in its proposed plan Through its public-benefits 22

funding WPL supports Focus on Energy solar water heating education market-building and 23

2007 program data provided by Focus on Energy

incentives However according to Focus on Energy only one commercial solar water heating 1

system one residential solar water heating system and one residential solar water heating repair 2

received Reward support in 2007 This is a missed opportunity for WPL in terms of increasing 3

customer satisfaction and lowering bills electric peak-load reduction impacts natural gas 4

savings and other benefits similar to those we have described for DPV 5

New work on solar water heating business models including programs that focus on the 6

commercial sector or use third-party financing for aggregations of solar installations has 7

recently changed the overall economics for this technology both from the customer perspective 8

and from the utility perspective22

We recommend that WPL work with Focus on Energy to 9

review the cost-effectiveness of targeted utility solar water heating marketing efforts based on 10

improved solar thermal evaluation metrics as we have already mentioned in this testimony 11

above 12

We recommend that WPL set goals for more than tripling new solar water heating 13

installations annually to a total of 24 installations in WPL territory through 2010 This would 14

primarily involve marketing support for existing Focus on Energy programs and incentives We 15

also recommend that the utility review solar thermal business models including third-party 16

financing models and report on their cost-effectiveness for WPL in time for possible program 17

design and implementation in the 2011-2012 timeframe 18

Q Please summarize your recommendations for WPL customer solar programs and the rate 19

impacts of those recommendations 20

A Our recommendations for WPL customer solar programs include 21

J Bourg J Cliburn C Robertson ―Assessing the Strategic Value of Solar Water Heating to Electric Utilities

Proceedings of the American Solar Energy Society San Diego 2008 The US DOE utility solar water heating collaborative

(US H20) is also an excellent source of information

Establish a more refined value-based evaluation protocol for customer solar 1

programs 2

Increase the solar portion of the Second Nature program through 2010 from a cap of 3

200 kW to 683 kW while reducing the current green power premium by about 30 4

Include in the planned review of the ART pilot a detailed evaluation of the cost-5

effectiveness and market appeal of the ART compared to competitive procurement of 6

solar resources for Second Nature Also provide research and review stakeholder 7

input on the anticipated customer response and net cost for a renewable energy tariff 8

that could be applied broadly for WPL solar customers 9

Obtain Focus on Energy input to fine-tune WPL renewable resource loans and grants 10

that may apply to PV or solar water heating 11

Add cost-effective solar water heating marketing efforts with the aim of tripling the 12

program reach annually 13

Begin now to plan larger targeted and innovative customer solar programs including 14

PV and solar thermal which would complement the utilityrsquos growing investment in 15

strategic utility DPV efforts in time for the next program revision 16

The rate impacts for each of these recommendations in the 2009-2010 timeframe are near 17

zero They relate to administrative support for the RampD efforts that are recommended and they 18

relate to preparations including a relatively small research budget to design improved and 19

expanded programs 20

The significant increase in PV through the Second Nature program is more than 21

supported by the current green power rate and should result in a rate reduction of about one-22

third New solar thermal goals are tied to incentives and administrative funding that are within 23

WPLrsquos current proposed budget though additional budget support may be required in forward 1

years to support implementation of growing programs 2

Q Does this conclude your testimony 3

A Yes 4

Bourg Robertson and Cliburn provided a compelling argument in Wisconsin that clearly applies in Michigan as well that the use of utility developed distributed photovoltaic solar capacity could create a ldquofeasible and prudent alternativerdquo to the proposal by Consumers Energy to build a new baseload coal fired power plant The use of distributed solar PV as a lynchpin for an integrated approach to addressing any identified need should have been raised and thoroughly examined by Consumers Energy especially based on the attention this approach has received the proximity of Wisconsin to Michigan and Michiganrsquos relative solar advantage over Germany which is successfully using solar photovoltaics as part of an integrated strategy to meet their current and future energy needs Michigan has an additional incentive to see Consumers pursue this kind of utility based solar plan because we are home to both Hemlock Semiconductor and United Solar Ovonics and a utility based distributed solar PV program would create both jobs and demand in state for a growing part of our statersquos manufacturing base Mr Bourg recently provided a presentation on this concept to members of the Michigan Public Service Commission staff and if additional information is needed or the staff have questions that you would like to raise with Mr Bourg we are happy to arrange an opportunity for that discussion Thank you for consideration of this information and please let me know if you have additional questions Sincerely Anne WoiwodeState Director Attachments WPLsummarypdf Sierra Club WPL ndash Direct Testimony of Sierra Club Bourg Robertson Cliburnpdf Sierra Club WPL ndash Exhibits 1-4 and public version of Exhibits 5pdf ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Anne Woiwode State Director Sierra Club Michigan Chapter109 E Grand River Ave Lansing MI 48906517-484-2372 annewoiwodesierracluborg Support Sierra Club Michigan Chapter Go to httptinyccMISierraClubSupport to make your donation Is it fair to call climate denial a form of treason Isnrsquot it politics as usual Yes it is mdash and thatrsquos why itrsquos unforgivable Paul Krugman NYT 62909

Briefing Paper

BEFORE THE

____________________________________________________________________________________

DIRECT TESTIMONY OF

August 11 2008

____________________________________________________________________________________

INTRODUCTION 1

MR BOURG 2

Colorado 80401 5

Berkeley in 1987 14

its construction 8

customers 16

MR ROBERTSON 21

97212 2

MS CLIBURN 13

Mexico 87508 16

A No 4

each 12

10 Rate Impacts 1

benefits 19

TABLE 1

Natural gas savings

Denver July 2006

investment plan 12

collaborative 4

TOPIC 1 13

TABLE 2

PV installed

in 2007

market

growth

Cumulative

installed PV

capacity

Goals and Comments

Colorado 125 1150 145

Nevada 146 556 187

value of PV

Oregon 11 120 28

Arizona 28 33 186

All Others

250 Various 679

Average 1517 47 4712

statewide ~1 MW

TOPIC 2 3

demand 6

fixed-tilt system 8

in output 14

TOPIC 3 15

total costs6 10

following range 9

MISO purchases 8

TOPIC 4 14

power resources 22

TOPIC 5 5

avoided 14

include 6

also be used 15

load growth 19

peak 4

been proven 15

$15 billion11

TABLE 3

5 $465

10 $722

15 $861

20 $935

strategy 7

TOPIC 6 18

described 21

possible 6

RECs 19

TABLE 4

Low Medium High

Fixed Tilt $12600 $25200 $37800

Single Axis $14490 $28980 $43470

TABLE 5

Low Medium High

Fixed Tilt $616276 $1232552 $1848828

Single Axis $708717 $1417435 $2126152

TOPIC 7 3

utility DPV plan 6

solar roof project

cost 6

TOPIC 8 1

testimony 4

digits 10

TABLE 6

---------- PV System Design -----------

Solar RECs $06 $12 $18 $07 $14 $21

effective 4

we considered 16

MW installed16

and repair costs 4

TOPIC 9 5

TABLE 7

2009-2010 10 MW 10 MW

2011 25 MW 35MW

2012 50 MW 85 MW

2013 77 MW 162 MW

2014 84 MW 246 MW

2015 86 MW 332 MW

2016 91 MW 423 MW

2017 94 MW 517 MW

resources 5

system 15

minute timeframes 6

costs 2

TOPIC 10 8

Rate Impacts 9

TOPIC 11 20

case 3

solar programs 21

The popularity of 3

Nature portfolio 11

tariff 6

above 12

programs 2

A Yes 4

Arranged by Date

Anne Woiwode Electric Utility Case No U [892009]

Arranged by Sender

Anne Woiwode

Electric Utility Case No U [892009]

Arranged by Subject

Electric Utility Case No U-15996

Anne Woiwode [892009]

Briefing Paper

BEFORE THE

____________________________________________________________________________________

DIRECT TESTIMONY OF

August 11 2008

____________________________________________________________________________________

INTRODUCTION 1

MR BOURG 2

Colorado 80401 5

Berkeley in 1987 14

its construction 8

customers 16

MR ROBERTSON 21

97212 2

MS CLIBURN 13

Mexico 87508 16

A No 4

each 12

10 Rate Impacts 1

benefits 19

TABLE 1

Natural gas savings

Denver July 2006

investment plan 12

collaborative 4

TOPIC 1 13

TABLE 2

PV installed

in 2007

market

growth

Cumulative

installed PV

capacity

Goals and Comments

Colorado 125 1150 145

Nevada 146 556 187

value of PV

Oregon 11 120 28

Arizona 28 33 186

All Others

250 Various 679

Average 1517 47 4712

statewide ~1 MW

TOPIC 2 3

demand 6

fixed-tilt system 8

in output 14

TOPIC 3 15

total costs6 10

following range 9

MISO purchases 8

TOPIC 4 14

power resources 22

TOPIC 5 5

avoided 14

include 6

also be used 15

load growth 19

peak 4

been proven 15

$15 billion11

TABLE 3

5 $465

10 $722

15 $861

20 $935

strategy 7

TOPIC 6 18

described 21

possible 6

RECs 19

TABLE 4

Low Medium High

Fixed Tilt $12600 $25200 $37800

Single Axis $14490 $28980 $43470

TABLE 5

Low Medium High

Fixed Tilt $616276 $1232552 $1848828

Single Axis $708717 $1417435 $2126152

TOPIC 7 3

utility DPV plan 6

solar roof project

cost 6

TOPIC 8 1

testimony 4

digits 10

TABLE 6

---------- PV System Design -----------

Solar RECs $06 $12 $18 $07 $14 $21

effective 4

we considered 16

MW installed16

and repair costs 4

TOPIC 9 5

TABLE 7

2009-2010 10 MW 10 MW

2011 25 MW 35MW

2012 50 MW 85 MW

2013 77 MW 162 MW

2014 84 MW 246 MW

2015 86 MW 332 MW

2016 91 MW 423 MW

2017 94 MW 517 MW

resources 5

system 15

minute timeframes 6

costs 2

TOPIC 10 8

Rate Impacts 9

TOPIC 11 20

case 3

solar programs 21

The popularity of 3

Nature portfolio 11

tariff 6

above 12

programs 2

A Yes 4

Briefing Paper

BEFORE THE

____________________________________________________________________________________

DIRECT TESTIMONY OF

August 11 2008

____________________________________________________________________________________

INTRODUCTION 1

MR BOURG 2

Colorado 80401 5

Berkeley in 1987 14

its construction 8

customers 16

MR ROBERTSON 21

97212 2

MS CLIBURN 13

Mexico 87508 16

A No 4

each 12

10 Rate Impacts 1

benefits 19

TABLE 1

Natural gas savings

Denver July 2006

investment plan 12

collaborative 4

TOPIC 1 13

TABLE 2

PV installed

in 2007

market

growth

Cumulative

installed PV

capacity

Goals and Comments

Colorado 125 1150 145

Nevada 146 556 187

value of PV

Oregon 11 120 28

Arizona 28 33 186

All Others

250 Various 679

Average 1517 47 4712

statewide ~1 MW

TOPIC 2 3

demand 6

fixed-tilt system 8

in output 14

TOPIC 3 15

total costs6 10

following range 9

MISO purchases 8

TOPIC 4 14

power resources 22

TOPIC 5 5

avoided 14

include 6

also be used 15

load growth 19

peak 4

been proven 15

$15 billion11

TABLE 3

5 $465

10 $722

15 $861

20 $935

strategy 7

TOPIC 6 18

described 21

possible 6

RECs 19

TABLE 4

Low Medium High

Fixed Tilt $12600 $25200 $37800

Single Axis $14490 $28980 $43470

TABLE 5

Low Medium High

Fixed Tilt $616276 $1232552 $1848828

Single Axis $708717 $1417435 $2126152

TOPIC 7 3

utility DPV plan 6

solar roof project

cost 6

TOPIC 8 1

testimony 4

digits 10

TABLE 6

---------- PV System Design -----------

Solar RECs $06 $12 $18 $07 $14 $21

effective 4

we considered 16

MW installed16

and repair costs 4

TOPIC 9 5

TABLE 7

2009-2010 10 MW 10 MW

2011 25 MW 35MW

2012 50 MW 85 MW

2013 77 MW 162 MW

2014 84 MW 246 MW

2015 86 MW 332 MW

2016 91 MW 423 MW

2017 94 MW 517 MW

resources 5

system 15

minute timeframes 6

costs 2

TOPIC 10 8

Rate Impacts 9

TOPIC 11 20

case 3

solar programs 21

The popularity of 3

Nature portfolio 11

tariff 6

above 12

programs 2

A Yes 4

Arranged by Date


Arranged by Sender

Anne Woiwode


Arranged by Subject



BEFORE THE

____________________________________________________________________________________

DIRECT TESTIMONY OF

August 11 2008

____________________________________________________________________________________

INTRODUCTION 1

MR BOURG 2

Colorado 80401 5

Berkeley in 1987 14

its construction 8

customers 16

MR ROBERTSON 21

97212 2

MS CLIBURN 13

Mexico 87508 16

A No 4

each 12

10 Rate Impacts 1

benefits 19

TABLE 1

Natural gas savings

Denver July 2006

investment plan 12

collaborative 4

TOPIC 1 13

TABLE 2

PV installed

in 2007

market

growth

Cumulative

installed PV

capacity

Goals and Comments

Colorado 125 1150 145

Nevada 146 556 187

value of PV

Oregon 11 120 28

Arizona 28 33 186

All Others

250 Various 679

Average 1517 47 4712

statewide ~1 MW

TOPIC 2 3

demand 6

fixed-tilt system 8

in output 14

TOPIC 3 15

total costs6 10

following range 9

MISO purchases 8

TOPIC 4 14

power resources 22

TOPIC 5 5

avoided 14

include 6

also be used 15

load growth 19

peak 4

been proven 15

$15 billion11

TABLE 3

5 $465

10 $722

15 $861

20 $935

strategy 7

TOPIC 6 18

described 21

possible 6

RECs 19

TABLE 4

Low Medium High

Fixed Tilt $12600 $25200 $37800

Single Axis $14490 $28980 $43470

TABLE 5

Low Medium High

Fixed Tilt $616276 $1232552 $1848828

Single Axis $708717 $1417435 $2126152

TOPIC 7 3

utility DPV plan 6

solar roof project

cost 6

TOPIC 8 1

testimony 4

digits 10

TABLE 6

---------- PV System Design -----------

Solar RECs $06 $12 $18 $07 $14 $21

effective 4

we considered 16

MW installed16

and repair costs 4

TOPIC 9 5

TABLE 7

2009-2010 10 MW 10 MW

2011 25 MW 35MW

2012 50 MW 85 MW

2013 77 MW 162 MW

2014 84 MW 246 MW

2015 86 MW 332 MW

2016 91 MW 423 MW

2017 94 MW 517 MW

resources 5

system 15

minute timeframes 6

costs 2

TOPIC 10 8

Rate Impacts 9

TOPIC 11 20

case 3

solar programs 21

The popularity of 3

Nature portfolio 11

tariff 6

above 12

programs 2

A Yes 4

Briefing Paper

BEFORE THE

____________________________________________________________________________________

DIRECT TESTIMONY OF

August 11 2008

____________________________________________________________________________________

INTRODUCTION 1

MR BOURG 2

Colorado 80401 5

Berkeley in 1987 14

its construction 8

customers 16

MR ROBERTSON 21

97212 2

MS CLIBURN 13

Mexico 87508 16

A No 4

each 12

10 Rate Impacts 1

benefits 19

TABLE 1

Natural gas savings

Denver July 2006

investment plan 12

collaborative 4

TOPIC 1 13

TABLE 2

PV installed

in 2007

market

growth

Cumulative

installed PV

capacity

Goals and Comments

Colorado 125 1150 145

Nevada 146 556 187

value of PV

Oregon 11 120 28

Arizona 28 33 186

All Others

250 Various 679

Average 1517 47 4712

statewide ~1 MW

TOPIC 2 3

demand 6

fixed-tilt system 8

in output 14

TOPIC 3 15

total costs6 10

following range 9

MISO purchases 8

TOPIC 4 14

power resources 22

TOPIC 5 5

avoided 14

include 6

also be used 15

load growth 19

peak 4

been proven 15

$15 billion11

TABLE 3

5 $465

10 $722

15 $861

20 $935

strategy 7

TOPIC 6 18

described 21

possible 6

RECs 19

TABLE 4

Low Medium High

Fixed Tilt $12600 $25200 $37800

Single Axis $14490 $28980 $43470

TABLE 5

Low Medium High

Fixed Tilt $616276 $1232552 $1848828

Single Axis $708717 $1417435 $2126152

TOPIC 7 3

utility DPV plan 6

solar roof project

cost 6

TOPIC 8 1

testimony 4

digits 10

TABLE 6

---------- PV System Design -----------

Solar RECs $06 $12 $18 $07 $14 $21

effective 4

we considered 16

MW installed16

and repair costs 4

TOPIC 9 5

TABLE 7

2009-2010 10 MW 10 MW

2011 25 MW 35MW

2012 50 MW 85 MW

2013 77 MW 162 MW

2014 84 MW 246 MW

2015 86 MW 332 MW

2016 91 MW 423 MW

2017 94 MW 517 MW

resources 5

system 15

minute timeframes 6

costs 2

TOPIC 10 8

Rate Impacts 9

TOPIC 11 20

case 3

solar programs 21

The popularity of 3

Nature portfolio 11

tariff 6

above 12

programs 2

A Yes 4

Arranged by Date


Arranged by Sender

Anne Woiwode


Arranged by Subject



BEFORE THE

____________________________________________________________________________________

DIRECT TESTIMONY OF

August 11 2008

____________________________________________________________________________________

INTRODUCTION 1

MR BOURG 2

Colorado 80401 5

Berkeley in 1987 14

its construction 8

customers 16

MR ROBERTSON 21

97212 2

MS CLIBURN 13

Mexico 87508 16

A No 4

each 12

10 Rate Impacts 1

benefits 19

TABLE 1

Natural gas savings

Denver July 2006

investment plan 12

collaborative 4

TOPIC 1 13

TABLE 2

PV installed

in 2007

market

growth

Cumulative

installed PV

capacity

Goals and Comments

Colorado 125 1150 145

Nevada 146 556 187

value of PV

Oregon 11 120 28

Arizona 28 33 186

All Others

250 Various 679

Average 1517 47 4712

statewide ~1 MW

TOPIC 2 3

demand 6

fixed-tilt system 8

in output 14

TOPIC 3 15

total costs6 10

following range 9

MISO purchases 8

TOPIC 4 14

power resources 22

TOPIC 5 5

avoided 14

include 6

also be used 15

load growth 19

peak 4

been proven 15

$15 billion11

TABLE 3

5 $465

10 $722

15 $861

20 $935

strategy 7

TOPIC 6 18

described 21

possible 6

RECs 19

TABLE 4

Low Medium High

Fixed Tilt $12600 $25200 $37800

Single Axis $14490 $28980 $43470

TABLE 5

Low Medium High

Fixed Tilt $616276 $1232552 $1848828

Single Axis $708717 $1417435 $2126152

TOPIC 7 3

utility DPV plan 6

solar roof project

cost 6

TOPIC 8 1

testimony 4

digits 10

TABLE 6

---------- PV System Design -----------

Solar RECs $06 $12 $18 $07 $14 $21

effective 4

we considered 16

MW installed16

and repair costs 4

TOPIC 9 5

TABLE 7

2009-2010 10 MW 10 MW

2011 25 MW 35MW

2012 50 MW 85 MW

2013 77 MW 162 MW

2014 84 MW 246 MW

2015 86 MW 332 MW

2016 91 MW 423 MW

2017 94 MW 517 MW

resources 5

system 15

minute timeframes 6

costs 2

TOPIC 10 8

Rate Impacts 9

TOPIC 11 20

case 3

solar programs 21

The popularity of 3

Nature portfolio 11

tariff 6

above 12

programs 2

A Yes 4

Briefing Paper

BEFORE THE

____________________________________________________________________________________

DIRECT TESTIMONY OF

August 11 2008

____________________________________________________________________________________

INTRODUCTION 1

MR BOURG 2

Colorado 80401 5

Berkeley in 1987 14

its construction 8

customers 16

MR ROBERTSON 21

97212 2

MS CLIBURN 13

Mexico 87508 16

A No 4

each 12

10 Rate Impacts 1

benefits 19

TABLE 1

Natural gas savings

Denver July 2006

investment plan 12

collaborative 4

TOPIC 1 13

TABLE 2

PV installed

in 2007

market

growth

Cumulative

installed PV

capacity

Goals and Comments

Colorado 125 1150 145

Nevada 146 556 187

value of PV

Oregon 11 120 28

Arizona 28 33 186

All Others

250 Various 679

Average 1517 47 4712

statewide ~1 MW

TOPIC 2 3

demand 6

fixed-tilt system 8

in output 14

TOPIC 3 15

total costs6 10

following range 9

MISO purchases 8

TOPIC 4 14

power resources 22

TOPIC 5 5

avoided 14

include 6

also be used 15

load growth 19

peak 4

been proven 15

$15 billion11

TABLE 3

5 $465

10 $722

15 $861

20 $935

strategy 7

TOPIC 6 18

described 21

possible 6

RECs 19

TABLE 4

Low Medium High

Fixed Tilt $12600 $25200 $37800

Single Axis $14490 $28980 $43470

TABLE 5

Low Medium High

Fixed Tilt $616276 $1232552 $1848828

Single Axis $708717 $1417435 $2126152

TOPIC 7 3

utility DPV plan 6

solar roof project

cost 6

TOPIC 8 1

testimony 4

digits 10

TABLE 6

---------- PV System Design -----------

Solar RECs $06 $12 $18 $07 $14 $21

effective 4

we considered 16

MW installed16

and repair costs 4

TOPIC 9 5

TABLE 7

2009-2010 10 MW 10 MW

2011 25 MW 35MW

2012 50 MW 85 MW

2013 77 MW 162 MW

2014 84 MW 246 MW

2015 86 MW 332 MW

2016 91 MW 423 MW

2017 94 MW 517 MW

resources 5

system 15

minute timeframes 6

costs 2

TOPIC 10 8

Rate Impacts 9

TOPIC 11 20

case 3

solar programs 21

The popularity of 3

Nature portfolio 11

tariff 6

above 12

programs 2

A Yes 4

Arranged by Date


Arranged by Sender

Anne Woiwode


Arranged by Subject



BEFORE THE

____________________________________________________________________________________

DIRECT TESTIMONY OF

August 11 2008

____________________________________________________________________________________

INTRODUCTION 1

MR BOURG 2

Colorado 80401 5

Berkeley in 1987 14

its construction 8

customers 16

MR ROBERTSON 21

97212 2

MS CLIBURN 13

Mexico 87508 16

A No 4

each 12

10 Rate Impacts 1

benefits 19

TABLE 1

Natural gas savings

Denver July 2006

investment plan 12

collaborative 4

TOPIC 1 13

TABLE 2

PV installed

in 2007

market

growth

Cumulative

installed PV

capacity

Goals and Comments

Colorado 125 1150 145

Nevada 146 556 187

value of PV

Oregon 11 120 28

Arizona 28 33 186

All Others

250 Various 679

Average 1517 47 4712

statewide ~1 MW

TOPIC 2 3

demand 6

fixed-tilt system 8

in output 14

TOPIC 3 15

total costs6 10

following range 9

MISO purchases 8

TOPIC 4 14

power resources 22

TOPIC 5 5

avoided 14

include 6

also be used 15

load growth 19

peak 4

been proven 15

$15 billion11

TABLE 3

5 $465

10 $722

15 $861

20 $935

strategy 7

TOPIC 6 18

described 21

possible 6

RECs 19

TABLE 4

Low Medium High

Fixed Tilt $12600 $25200 $37800

Single Axis $14490 $28980 $43470

TABLE 5

Low Medium High

Fixed Tilt $616276 $1232552 $1848828

Single Axis $708717 $1417435 $2126152

TOPIC 7 3

utility DPV plan 6

solar roof project

cost 6

TOPIC 8 1

testimony 4

digits 10

TABLE 6

---------- PV System Design -----------

Solar RECs $06 $12 $18 $07 $14 $21

effective 4

we considered 16

MW installed16

and repair costs 4

TOPIC 9 5

TABLE 7

2009-2010 10 MW 10 MW

2011 25 MW 35MW

2012 50 MW 85 MW

2013 77 MW 162 MW

2014 84 MW 246 MW

2015 86 MW 332 MW

2016 91 MW 423 MW

2017 94 MW 517 MW

resources 5

system 15

minute timeframes 6

costs 2

TOPIC 10 8

Rate Impacts 9

TOPIC 11 20

case 3

solar programs 21

The popularity of 3

Nature portfolio 11

tariff 6

above 12

programs 2

A Yes 4

Briefing Paper

BEFORE THE

____________________________________________________________________________________

DIRECT TESTIMONY OF

August 11 2008

____________________________________________________________________________________

INTRODUCTION 1

MR BOURG 2

Colorado 80401 5

Berkeley in 1987 14

its construction 8

customers 16

MR ROBERTSON 21

97212 2

MS CLIBURN 13

Mexico 87508 16

A No 4

each 12

10 Rate Impacts 1

benefits 19

TABLE 1

Natural gas savings

Denver July 2006

investment plan 12

collaborative 4

TOPIC 1 13

TABLE 2

PV installed

in 2007

market

growth

Cumulative

installed PV

capacity

Goals and Comments

Colorado 125 1150 145

Nevada 146 556 187

value of PV

Oregon 11 120 28

Arizona 28 33 186

All Others

250 Various 679

Average 1517 47 4712

statewide ~1 MW

TOPIC 2 3

demand 6

fixed-tilt system 8

in output 14

TOPIC 3 15

total costs6 10

following range 9

MISO purchases 8

TOPIC 4 14

power resources 22

TOPIC 5 5

avoided 14

include 6

also be used 15

load growth 19

peak 4

been proven 15

$15 billion11

TABLE 3

5 $465

10 $722

15 $861

20 $935

strategy 7

TOPIC 6 18

described 21

possible 6

RECs 19

TABLE 4

Low Medium High

Fixed Tilt $12600 $25200 $37800

Single Axis $14490 $28980 $43470

TABLE 5

Low Medium High

Fixed Tilt $616276 $1232552 $1848828

Single Axis $708717 $1417435 $2126152

TOPIC 7 3

utility DPV plan 6

solar roof project

cost 6

TOPIC 8 1

testimony 4

digits 10

TABLE 6

---------- PV System Design -----------

Solar RECs $06 $12 $18 $07 $14 $21

effective 4

we considered 16

MW installed16

and repair costs 4

TOPIC 9 5

TABLE 7

2009-2010 10 MW 10 MW

2011 25 MW 35MW

2012 50 MW 85 MW

2013 77 MW 162 MW

2014 84 MW 246 MW

2015 86 MW 332 MW

2016 91 MW 423 MW

2017 94 MW 517 MW

resources 5

system 15

minute timeframes 6

costs 2

TOPIC 10 8

Rate Impacts 9

TOPIC 11 20

case 3

solar programs 21

The popularity of 3

Nature portfolio 11

tariff 6

above 12

programs 2

A Yes 4

Arranged by Date


Arranged by Sender

Anne Woiwode


Arranged by Subject



BEFORE THE

____________________________________________________________________________________

DIRECT TESTIMONY OF

August 11 2008

____________________________________________________________________________________

INTRODUCTION 1

MR BOURG 2

Colorado 80401 5

Berkeley in 1987 14

its construction 8

customers 16

MR ROBERTSON 21

97212 2

MS CLIBURN 13

Mexico 87508 16

A No 4

each 12

10 Rate Impacts 1

benefits 19

TABLE 1

Natural gas savings

Denver July 2006

investment plan 12

collaborative 4

TOPIC 1 13

TABLE 2

PV installed

in 2007

market

growth

Cumulative

installed PV

capacity

Goals and Comments

Colorado 125 1150 145

Nevada 146 556 187

value of PV

Oregon 11 120 28

Arizona 28 33 186

All Others

250 Various 679

Average 1517 47 4712

statewide ~1 MW

TOPIC 2 3

demand 6

fixed-tilt system 8

in output 14

TOPIC 3 15

total costs6 10

following range 9

MISO purchases 8

TOPIC 4 14

power resources 22

TOPIC 5 5

avoided 14

include 6

also be used 15

load growth 19

peak 4

been proven 15

$15 billion11

TABLE 3

5 $465

10 $722

15 $861

20 $935

strategy 7

TOPIC 6 18

described 21

possible 6

RECs 19

TABLE 4

Low Medium High

Fixed Tilt $12600 $25200 $37800

Single Axis $14490 $28980 $43470

TABLE 5

Low Medium High

Fixed Tilt $616276 $1232552 $1848828

Single Axis $708717 $1417435 $2126152

TOPIC 7 3

utility DPV plan 6

solar roof project

cost 6

TOPIC 8 1

testimony 4

digits 10

TABLE 6

---------- PV System Design -----------

Solar RECs $06 $12 $18 $07 $14 $21

effective 4

we considered 16

MW installed16

and repair costs 4

TOPIC 9 5

TABLE 7

2009-2010 10 MW 10 MW

2011 25 MW 35MW

2012 50 MW 85 MW

2013 77 MW 162 MW

2014 84 MW 246 MW

2015 86 MW 332 MW

2016 91 MW 423 MW

2017 94 MW 517 MW

resources 5

system 15

minute timeframes 6

costs 2

TOPIC 10 8

Rate Impacts 9

TOPIC 11 20

case 3

solar programs 21

The popularity of 3

Nature portfolio 11

tariff 6

above 12

programs 2

A Yes 4

Briefing Paper

BEFORE THE

____________________________________________________________________________________

DIRECT TESTIMONY OF

August 11 2008

____________________________________________________________________________________

INTRODUCTION 1

MR BOURG 2

Colorado 80401 5

Berkeley in 1987 14

its construction 8

customers 16

MR ROBERTSON 21

97212 2

MS CLIBURN 13

Mexico 87508 16

A No 4

each 12

10 Rate Impacts 1

benefits 19

TABLE 1

Natural gas savings

Denver July 2006

investment plan 12

collaborative 4

TOPIC 1 13

TABLE 2

PV installed

in 2007

market

growth

Cumulative

installed PV

capacity

Goals and Comments

Colorado 125 1150 145

Nevada 146 556 187

value of PV

Oregon 11 120 28

Arizona 28 33 186

All Others

250 Various 679

Average 1517 47 4712

statewide ~1 MW

TOPIC 2 3

demand 6

fixed-tilt system 8

in output 14

TOPIC 3 15

total costs6 10

following range 9

MISO purchases 8

TOPIC 4 14

power resources 22

TOPIC 5 5

avoided 14

include 6

also be used 15

load growth 19

peak 4

been proven 15

$15 billion11

TABLE 3

5 $465

10 $722

15 $861

20 $935

strategy 7

TOPIC 6 18

described 21

possible 6

RECs 19

TABLE 4

Low Medium High

Fixed Tilt $12600 $25200 $37800

Single Axis $14490 $28980 $43470

TABLE 5

Low Medium High

Fixed Tilt $616276 $1232552 $1848828

Single Axis $708717 $1417435 $2126152

TOPIC 7 3

utility DPV plan 6

solar roof project

cost 6

TOPIC 8 1

testimony 4

digits 10

TABLE 6

---------- PV System Design -----------

Solar RECs $06 $12 $18 $07 $14 $21

effective 4

we considered 16

MW installed16

and repair costs 4

TOPIC 9 5

TABLE 7

2009-2010 10 MW 10 MW

2011 25 MW 35MW

2012 50 MW 85 MW

2013 77 MW 162 MW

2014 84 MW 246 MW

2015 86 MW 332 MW

2016 91 MW 423 MW

2017 94 MW 517 MW

resources 5

system 15

minute timeframes 6

costs 2

TOPIC 10 8

Rate Impacts 9

TOPIC 11 20

case 3

solar programs 21

The popularity of 3

Nature portfolio 11

tariff 6

above 12

programs 2

A Yes 4

Arranged by Date


Arranged by Sender

Anne Woiwode


Arranged by Subject



its construction 8

customers 16

MR ROBERTSON 21

97212 2

MS CLIBURN 13

Mexico 87508 16

A No 4

each 12

10 Rate Impacts 1

benefits 19

TABLE 1

Natural gas savings

Denver July 2006

investment plan 12

collaborative 4

TOPIC 1 13

TABLE 2

PV installed

in 2007

market

growth

Cumulative

installed PV

capacity

Goals and Comments

Colorado 125 1150 145

Nevada 146 556 187

value of PV

Oregon 11 120 28

Arizona 28 33 186

All Others

250 Various 679

Average 1517 47 4712

statewide ~1 MW

TOPIC 2 3

demand 6

fixed-tilt system 8

in output 14

TOPIC 3 15

total costs6 10

following range 9

MISO purchases 8

TOPIC 4 14

power resources 22

TOPIC 5 5

avoided 14

include 6

also be used 15

load growth 19

peak 4

been proven 15

$15 billion11

TABLE 3

5 $465

10 $722

15 $861

20 $935

strategy 7

TOPIC 6 18

described 21

possible 6

RECs 19

TABLE 4

Low Medium High

Fixed Tilt $12600 $25200 $37800

Single Axis $14490 $28980 $43470

TABLE 5

Low Medium High

Fixed Tilt $616276 $1232552 $1848828

Single Axis $708717 $1417435 $2126152

TOPIC 7 3

utility DPV plan 6

solar roof project

cost 6

TOPIC 8 1

testimony 4

digits 10

TABLE 6

---------- PV System Design -----------

Solar RECs $06 $12 $18 $07 $14 $21

effective 4

we considered 16

MW installed16

and repair costs 4

TOPIC 9 5

TABLE 7

2009-2010 10 MW 10 MW

2011 25 MW 35MW

2012 50 MW 85 MW

2013 77 MW 162 MW

2014 84 MW 246 MW

2015 86 MW 332 MW

2016 91 MW 423 MW

2017 94 MW 517 MW

resources 5

system 15

minute timeframes 6

costs 2

TOPIC 10 8

Rate Impacts 9

TOPIC 11 20

case 3

solar programs 21

The popularity of 3

Nature portfolio 11

tariff 6

above 12

programs 2

A Yes 4

Briefing Paper

BEFORE THE

____________________________________________________________________________________

DIRECT TESTIMONY OF

August 11 2008

____________________________________________________________________________________

INTRODUCTION 1

MR BOURG 2

Colorado 80401 5

Berkeley in 1987 14

its construction 8

customers 16

MR ROBERTSON 21

97212 2

MS CLIBURN 13

Mexico 87508 16

A No 4

each 12

10 Rate Impacts 1

benefits 19

TABLE 1

Natural gas savings

Denver July 2006

investment plan 12

collaborative 4

TOPIC 1 13

TABLE 2

PV installed

in 2007

market

growth

Cumulative

installed PV

capacity

Goals and Comments

Colorado 125 1150 145

Nevada 146 556 187

value of PV

Oregon 11 120 28

Arizona 28 33 186

All Others

250 Various 679

Average 1517 47 4712

statewide ~1 MW

TOPIC 2 3

demand 6

fixed-tilt system 8

in output 14

TOPIC 3 15

total costs6 10

following range 9

MISO purchases 8

TOPIC 4 14

power resources 22

TOPIC 5 5

avoided 14

include 6

also be used 15

load growth 19

peak 4

been proven 15

$15 billion11

TABLE 3

5 $465

10 $722

15 $861

20 $935

strategy 7

TOPIC 6 18

described 21

possible 6

RECs 19

TABLE 4

Low Medium High

Fixed Tilt $12600 $25200 $37800

Single Axis $14490 $28980 $43470

TABLE 5

Low Medium High

Fixed Tilt $616276 $1232552 $1848828

Single Axis $708717 $1417435 $2126152

TOPIC 7 3

utility DPV plan 6

solar roof project

cost 6

TOPIC 8 1

testimony 4

digits 10

TABLE 6

---------- PV System Design -----------

Solar RECs $06 $12 $18 $07 $14 $21

effective 4

we considered 16

MW installed16

and repair costs 4

TOPIC 9 5

TABLE 7

2009-2010 10 MW 10 MW

2011 25 MW 35MW

2012 50 MW 85 MW

2013 77 MW 162 MW

2014 84 MW 246 MW

2015 86 MW 332 MW

2016 91 MW 423 MW

2017 94 MW 517 MW

resources 5

system 15

minute timeframes 6

costs 2

TOPIC 10 8

Rate Impacts 9

TOPIC 11 20

case 3

solar programs 21

The popularity of 3

Nature portfolio 11

tariff 6

above 12

programs 2

A Yes 4

Arranged by Date


Arranged by Sender

Anne Woiwode


Arranged by Subject



Documents

From: Anne Woiwode To