Clouds cast over 2 solar projects
Public-private partnerships in Bend, Redmond caught up in inquiry
By Peter Sachs / The Bulletin - June 13, 2008
Two Central Oregon solar power projects could find themselves in the dark now that a power company has asked the state to clarify laws related to such ventures.
While Pacific Power says it just wants to ensure customers are being treated fairly, environmental groups and solar companies say the appeal casts dark clouds over an industry that’s just starting to get plugged in.
Solar panels are slated for the Redmond Airport and the downtown Bend parking garage in deals between the respective cities and private companies.
Since governments don’t pay taxes, the federal and state tax credits available for installing new solar systems aren’t particularly helpful. But by partnering with private companies, everyone can win, said Jeremiah Baumann, the program director of the nonprofit group Environment Oregon.
The cities provide space for the solar panels and get reduced-cost electricity from them without having to come up with money for the panels. The solar companies get the tax breaks.
But lucrative federal tax credits could expire at the end of the year. And even if the state Public Utilities Commission rules in favor of the projects, it could take up to two months to reach that decision. That could make it hard for solar companies to finish by the end of the year to get the tax credits before they expire.
“It’s unfortunate timing and, as far as we can tell, there is no problem, so we’re wondering what problem PacifiCorp is trying to solve,” said Rachel Shimshak, the director of the nonprofit Renewable Northwest. PacifiCorp is the parent company of Pacific Power.
So far the public-private model has worked well in fostering solar projects around the state, Baumann said.
“Threatening that model makes everybody just get scared to death,” he said.
Pacific Power has asked the state PUC to make sure the public-private arrangements between local governments and solar companies are following the laws. Art Sasse, a Pacific Power spokesman in Portland, said the current rules need to be more clear and no projects should be jeopardized as a result of the PUC’s review.
“We are going to have clarity here in a really quick fashion,” Sasse said.
The underlying issue for Pacific Power relates to what’s known as “net metering.” Solar installations, if they generate enough power, can actually turn a home or business electric meter backward, in effect letting that person sell electricity back to the power company. But some power companies are growing concerned that with too large of an installation – solar or otherwise – that begins to look like another, less-regulated private utility, Baumann said.
Sasse said with private companies involved, a host of new questions need to be answered.
“The law doesn’t cover them so there’s no clarity around service and price,” he said.
The Bend solar array, slated for installation across the entire top of the parking garage, would generate 200 kilowatts of electricity. The city is partnering with Bend-based SunEnergy to provide and install the panels.
Bend Downtown Manager Jeff Datwyler said while he knows little about Pacific Power’s concerns, he didn’t expect it to have much of an effect on the parking garage solar project.
“We’re shooting for this construction season to get it built, so I sure hope there’s nothing to put the project at risk,” Datwyler said.
Doug Parsons, the CEO of SunEnergy, was hesitant to comment on the issue, though he said he believes the state laws Pacific Power is calling into question are already perfectly clear.
“The unfortunate short-term consequences of this issue on the Oregon solar industry are substantial,” Parsons wrote in an e-mail Thursday.
Redmond Airport’s array will be installed as part of the terminal expansion. It would generate about 57 kilowatts.
Redmond City Manager Mike Patterson said the city has already received grant money from Pacific Power for the airport solar project.
Bend’s parking garage project also is getting money from Pacific Power to help fund its construction.
“We’re anxious to make sure that they succeed,” Sasse said.
But Baumann said the uncertain fate of federal tax credits is already having a “chilling effect” on companies wanting to partner with local governments for solar projects.
“To make a solar power project, you’ve got a bunch of different financing pieces that have to happen,” he said. “(Solar companies) also don’t want to install the project and have the rug pulled out from them and not get paid.”
