“We can avoid that $100 million investment in transmission lines, distribution lines, in capital infrastructure…”

How can a utility like Long Island Power Authority avoid all that new capital expenditure? Find out in this interview with Vice President of Environmental Affairs Michael Deering, recorded via Skype on November 25, 2013.

Customer-Powered Utility

The first question we asked Michael was why one of the largest municipal utilities in the country was looking to its customers for power generation. The answer was simple: 1) for the environmental value of solar energy but more importantly, 2) for the economy. To generate jobs and economic development on Long Island.

Solar Programs Helping Meet Peak Demand

The Long Island Power Authority isn’t new to customer-owned solar. They launched their first solar rebate program in 2001, and now have solar on over 7300 homes and businesses on Long Island. They’ve added another ~50 megawatts (MW) with a few utility-scale projects, and then launched the feed-in tariff program in 2012. In total, the utility will have 170 MW of solar installed by the end of 2014, sufficient to meet about 3% of its peak demand.

Limited Line Capacity Means High Value for Local Solar

LIPA isn’t a typical municipal utility. It’s literally at the “end of the line,” and that limited import capacity puts a premium on locally generated energy. The new iteration of the feed-in tariff program, launched in 2013, asks for 40 of the 100 MW to be developed on the south fork of Long Island (Montauk). If they can attract the investment, the utility will pay an additional 7¢ per kilowatt-hour for energy from those solar projects because the energy will help defer big investments in transmission and power plants to serve growing peak demand.

What’s Next?

LIPA has plans to procure more large-scale renewable energy through a 280 MW request for proposal (RFP) in 2014 as well as a third wave feed-in tariff program, focused on non-solar renewable energy technologies, with a total capacity of 20 MW.

You can learn more about feed-in tariff programs from our 2012 report or about the way utilities are valuing solar power from our series on Minnesota’s value of solar law.