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LIPA to delay parts of compensation plan for solar customers

A compromise will delay the start of a new method to calculate the value of solar for commercial customers from Jan. 1 to May 1.

LIPA will delay by four months elements of a new plan to compensate commercial customers for new solar energy installations following widespread criticism by solar-industry companies last month.

LIPA trustees on Tuesday will be asked to approve an amended introduction for its so-called value of distributed energy resources plan, which now will take effect May 1 instead of Jan. 1 for commercial customers, according to updated LIPA information and the group, Long Island Solar Energy Industry Association.

LIPA trustees also will be asked to approve the authority’s 2018 budget, which includes an average monthly increase in delivery and related charges of $7.41 for typical customers, LIPA has said. The utility also projects that power-supply charges could decrease an average $3.35 a month next year, although the decrease may vary with fuel costs. In all, LIPA projects the average monthly customer bill next year will increase to $158.61 compared with $155.26 this year, or around 2 percent a month.

LIPA projects total revenue for 2018 to decline to $3.52 billion, a reduction of $61 million from budgeted 2017 levels. LIPA projects sales of electricity to decline by 0.7 percent over the next two years, reflecting customer efficiency measures and additional rooftop solar.

The largest portion of the 2018 bill increase, or $2.57 a month, will be seen in the delivery portion of bills, most of that part of a state-approved three-year rate increase. Bills also will see a $2.39 increase in the revenue decoupling charge, which allows LIPA to recoup costs when sales fall below projections because of increased green energy and other factors. There’s also a $1.92 increase in the delivery service adjustment, accounting for higher-than-projected storm costs in 2017. The efficiency and renewables charge will increase an average 53 cents a month, LIPA said.

For the solar compensation program, LIPA will assure contractors it will work over the next several months to improve online tools needed for companies to calculate how the new plan will affect their businesses as they decide to install solar or other green-energy technologies. Calculators developed by the state to facilitate that analysis were harshly criticized by solar companies during LIPA hearings last month.

Concerns had been that the new plan added uncertainty and complexity to a current system called net metering that has been widely successful. Long Island leads the state in solar energy installations with 40,000.

Under net metering, excess energy produced by solar systems is banked as a credit at the full value that LIPA charges customers for energy — around 19 cents a kilowatt-hour. Under the new plan, LIPA would use a set of variables to determine the value, including the location of the solar array, its environmental benefits and the overall value of the system in reducing demand.

Consumers with systems already installed would keep the current system, while new systems installed after January would use the existing net metering plan for 20 years. The new plan would apply primarily to commercial systems installed after April 1, 2018 — around 100 projects, LIPA said.

Arthur Perri, who leads a steering committee of the Long Island solar group and is director of sales of CED Greentech Long Island, an installer in Ronkonkoma, said the changes being offered by LIPA “will make a big difference.”

“It’s a substantial change,” he said, allowing companies to finalize contracts already underway without disruption.

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