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Net Metering and Interconnection Requirements Net Metering and Interconnection Requirements

Net Metering and Interconnection Requirements - PowerPoint Presentation

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Net Metering and Interconnection Requirements - PPT Presentation

IMUA 2015 Annual Conference May 8 2015 Delia Patterson General Counsel APPA Agenda Define what I mean when I use the term distributed generation DG Provide you with an overview of some of APPAs DG resources ID: 597459

interconnection net systems metering net interconnection metering systems power customers small costs utility solar policies cost cont rate distribution customer distributed generation

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Net Metering and Interconnection Requirements

IMUA 2015 Annual Conference

May 8, 2015Delia PattersonGeneral Counsel, APPASlide3

Agenda

Define what I mean when I use the term “distributed generation” (DG)

Provide you with an overview of some of APPA’s DG resourcesDiscuss Net Metering Discuss Interconnection Standards and AgreementsSlide4

What are DG Systems?

DG refers to power produced at the point of consumption

small-scale energy resources that typically range in size from 3 kilowatts (kW) to 10 megawatts (MW) or largerA typical household’s peak demand is about 3.5 kW, so the smaller resources are used by residential customers, while the larger systems are typically used by commercial and industrial customers More than 90 percent of installed distributed generation in the United States today is solar In addition to PV, DG can include small wind turbines, combined heat and power (CHP), fuel cells, microturbines, and other sources Slide5

DG Education and Tools

APPA is concerned about the impact of DG on members if not properly managed

DG (esp. solar PV) is a major focus of APPA programming; we want members to learn from those on the front lines (CA, AZ)APPA has several publications on different aspects of DG issuesSlide6

DG PublicationsSlide7

DG Publications

(cont.)Slide8

DG Webinar Series

February 26, 2015 - May 7, 2015

All webinars take place from 2 – 3:30 p.m. Eastern. The series includes the following five webinars, which can be taken individually or as a series for a discounted rate:Distributed Generation: A Primer – Feb. 26Distributed Generation: Implications for Public Utilities – March 12Understanding the Potential Value of Community Solar – April 2Solar Rooftop Impact on Retail Rate Recovery – April 21Solar Engagement Options for Public Power Utilities – May 7More information at http://www.publicpower.org/Events/Event.cfm?EventID=174077Recordings of past webinars are available. Slide9

More DG Resources at PublicPower.org

www.publicpower.org/distributedresourcesSlide10

NET METERINGSlide11

What is Net Metering?

Net metering rules generally provide consumers with certain DG the ability for the meter to roll forward when customer

consumes and roll backwards when the customer exports power (“netting” effect on consumer bills)Currently, 43 states plus D.C. have implemented net metering policies (policies vary significantly by state)Under most net-metering programs, the customer is both charged and credited at the utility’s full retail rate of electricitySlide12

Utility Cost Under-Recovery Is Becoming an Issue . . .

As penetration of solar PV has increased in some states (California, Arizona, New Jersey, Minnesota), cost under-recovery has become a battleground issue

Since net metering generally does not account for time of usage, it potentially over-compensates distributed generators and credits them with a value of generation that is higher than the utility’s avoided cost If the utility’s rate structure recovers fixed costs of service (e.g., transmission, distribution, power supply) in volumetric rate, those costs are not recoveredNet meters allow customers to under-pay fixed costs Slide13

Net Metering in Illinois

Legislation enacted in 2007 (with changes in 2011 and 2012

)IOUs and Alternative Retail Electricity Suppliers must offer net meteringPublic power and coops not required Net metering available to customers generating electricity using solar, wind, dedicated energy crops, anaerobic digestion of livestock or food processing waste, hydropower, fuel cells and microturbines powered by renewable fuelsSystems up to 40 kW are eligible for net meteringAny net excess during a billing period is carried over as a kWh credit to the following billing periodCredits expire at the end of an annualized periodSlide14

Net Metering in Illinois (cont.)

For customers taking service under a time-of-use (TOU) tariff, if the customer is a net generator during any discrete TOU period, the net kWh produced is valued at the same price per kWh as the utility would charge for retail kWh sales during that same time of use period.

Dual metering available for systems greater than 40 kW but no greater than 2 MW (generally less favorable to customers than net metering)Slide15

Should Current Net Metering Policies Be Updated?

Yes

Because of the way many net metering policies were designed, net-metered customers often receive the full retail electricity rate, even though it could cost less for the utility to produce or buy on the wholesale marketUpdates may be needed to ensure all customers have safe, reliable and affordable electricitySlide16

Tips for Creating/Updating Your Net Metering Policy

Adopt policies that support renewables w/o shifting costs between consumers

Ensure appropriate compensation to consumers for their net excess generation at reasonable ratesEnsure customer generators pay an appropriate share of system costs, protecting other consumers from cost-subsidiesSlide17

Tips for

Creating/Updating

Your Net Metering Policy (cont.)If net metering policies are adopted, impose appropriate limits:They should only apply to small residential generators (<10 kW) that use intermittent renewable energy They should only be permitted up to a small percentage (e.g., 0.1%) of the utility’s historic peak loadSlide18

Interconnection Standards and AgreementsSlide19

Federal Interconnection Procedures and Agreement

FERC’s Small Generator Interconnection Procedures (SGIP) and Small Generator Interconnection Agreement (SGIA) adopted in 2005 (Order No. 2006) and revised in 2013 (Order No. 792)

Governs FERC-jurisdictional interconnections up to 20 MW (but sets standard for the industry . . .)Generally do not apply to distribution-level interconnection unless specifically adopted at the state or local levelSlide20

Federal Interconnection Procedures and Agreement (cont.)

Order No. 792 is FERC’s response to the rapid increase in solar PV development and related changes in interconnection technology

Provides generators more flexibilityOrder No. 792 changes:Customers can now request a pre-application report regarding a point of interconnection to help that customer select the best site for its small generating facilityIncreased Fast Track eligibility from 2 MW to 5 MW (available only to inverter-based systems)Slide21

Federal Interconnection Procedures and Agreement (cont.)

Revised supplemental review process, which is the next

step if a small generator fails the Fast Track screensPerformed at discretion of Interconnection Customer3 new screens – 100% of minimum load; power quality and voltage; and safety and reliability Customers may comment on required upgradesSlide22

Illinois Commerce Commission Interconnection Standards

For DG up to 10 MW

(including CHP), the rules set 4 levels of review for interconnection requests, which are eligible for expedited review:Tier 1: inverter-based systems up to 10 kWTier 2: systems up to 2 MW, connected to a radial distribution network or a spot network serving one

customer

Tier

3:

systems

up to 50 kW, connected to an area network and from which power will not be exported, or certified, non-exporting systems up to 10 MW, connected to a radial distribution

network

Tier

4:

systems

up to 10 MW that do not meet the criteria for inclusion in a lower tier, including all systems using non-certified components and those that require additional construction by the utility in order accommodate the

facilitySlide23

Illinois Commerce Commission Interconnection Standards (cont.)

For

DG systems (including CHP) >10 MW, an interconnection feasibility study and a system impact study will be required A standard interconnection agreement form is available from the utility, and fees and insurance requirements will be determined on a case-by-case basisSlide24

Then there is PURPA . . .

Section 210 of the Public Utility Regulatory Policies Act applies to

all utilities (including yours)PURPA established 2 types of Qualifying Facilities (QFs)Small power production facilities Primary source is biomass, waste or renewableNo bigger than 80 MWCogeneration facilitiesProduces steam/heat for industrial purposes and electric energyAny sizeSlide25

Then there is PURPA . . . (cont.)

PURPA provides QFs the right to sell power to electric utilities at avoided cost rates unless the utility is

exemptNegotiated rates and net metering permittedQFs have the right to receive supplementary, backup, maintenance and interruptible powerQFs also have the right to interconnect and wheelUtility entitled to interconnection costs, which must be set at a non-discriminatory basisInterconnection costs include the reasonable cost of connecting, switching, metering, upgrades to distribution, safety provisions, and administrative costs incurred by the utility directly related to interconnecting the QFSlide26

Interconnection Agreements

The purpose of interconnection agreements is to ensure consumers installing DG are addressing the following and other issues up front:

Certification of the reliability and safety of the proposed DG facility and physical interconnection equipmentThe need for costs of any distribution system upgrades required to integrate the DG facilityResponsibility and requirements for the control, operations, and maintenance of the DG facility and related equipmentMetering and payment for any net energy exports to the systemInspection rightsLiability and indemnificationInsuranceSlide27

Questions

Delia Patterson

American Public Power Associationdpatterson@publicpower.org202-467-2993 (office)301-529-4480 (cell)