On February 17, 2010, PUC Staff submitted a proposal that would essentially provide a net-metering-like option for systems sized 0-10 kW and 10-100 kW.  Instead of receiving a retail rate, these customers would receive an incentive payment for 100% of the kWhs produced, up to their monthly onsite usage.  Excess kilowatt-hours would be rolled over and banked for future usage.  Different rates would be paid for the two tiers of system sizes.  The proposal includes a bid process for systems sized 100-500 kW that would pay a volumetric incentive, up to a set price ceiling. Staff’s proposal also includes a MW allotment for different system sizes: 12 MW of the 25 should be reserved for small systems, 8 MW for medium and 5 MW for large scale systems.  This option, among other proposals on the table, diffuses the FERC-preemption issue by splitting up the incentive into an avoided-cost payment and a REC purchase.

Another proposal, put forth by solar developers, suggests both a bid and net-metering option for systems over 10 kW, while systems under that size would be offered only the net-metering option. Yet another removes the net-metering option entirely and would require the premium REC payment for 100% of electric generation from all systems.  While most proposals require the utility to directly contract with the utility customer for these contracts, one of these proposals suggests that the utility should also be able to contract directly with third-party providers.

The PUC was legislatively required to establish incentive rates by April 1, 2010 but due to the complexity surrounding the FERC issue, the new deadline for establishing rates has been moved to July 1, 2010.  Much more information is available on the OPUC’s Docket UM 1452 page.

This rule applies to utility customers with onsite renewable resources, cogeneration, fuel cells, and microturbines. There is no limit to the number of participants that can opt for net metering.

The predominant change in the rules allows systems up to one MW to become eligible for net metering (previously the limit was 100 kW).  In respect to how net excess generation is carried over, these unusally convoluted rules differ slightly for customers of competitive electricity suppliers and those of standard offer service providers.  In essence though, for systems up to 100 kW, excess kWh generation during a billing period will be expressed as a dollar value, for the full retail distribution rate, on the customer-generator’s next bill. For customers with systems between 100 kW and one MW, this rollover credit does not include any distribution-related credit (in other words, it rolls over at around the avoided cost rate, rather than the retail rate). These bill credits carry forward indefinitely, until they are used by the customer. 

For more information, see D.C. PSC Formal Case No. 945.  Comments are due within 30 days after the 2/26 publication in the D.C. Register.

• An increase in the aggregate participation limit from 0.1% of utility’s total load to 1% of the utility aggregate customer peak demand
• Net excess generation during a billing period carries over at the full retail rate for up to 12 months and excess kWhs at the end of the annual period are reconciled at the utility’s avoided cost rate
• System size limits are 25kW for residential, 500kW for commercial and 2MW for industrial customers
• Customer owns RECs associated with generation
• Virtual meter aggregation is allowed for meters within two miles of properties owned or leased by a customer within two miles of the customer’s property. For these arrangements, excess credits will be applied first to the meter through which the facility supplies electricity to the distribution system, then prorated equally to the remaining meters on the account

There are also several red flags associated with this proposal, which are not in keeping with many other state rules or what IREC considers best practices:

• Customer must pay for construction or upgrades to the electric utility system, should they be required in order to interconnect the facility, which could be cost-prohibitive
• Net metering is allowed for not only renewable resources but “alternative” sources including waste coal, natural gas, tire-derived fuel and other non-renewable sources
• All systems are required to have a redundant utility external disconnect switch
• Customers must maintain at least $100,000 of liability insurance or such amount of coverage reasonably deemed necessary by the utility to protect its plant and other customers
• Rules are vague regarding interconnection fees, terms and charges

Comments on this proposal must be filed with the PSC by April 5, 2010.

Fast Track Level 1 review: systems 10 kW or less

Expedited Level 2 review: systems 2 MW or less

Level 3 review: interconnection requests to area networks and radial distribution circuits where power will not be exported (area networks: systems and aggregate load on any area network must be less than or equal to 50 kW and use reverse power relays and/or other protection functions.  Radial distribution: Individual system and aggregate load must be 10 MW or less and use reverse power relays)

Level 4 review: Any other interconnections under 10 MW that do not fall under levels 1-3.

The rule proposal indicates that utilities will need to submit standard applications for interconnection requests, standard agreements required by the interconnection rules and a schedule of fees for processing interconnection requests, all of which must be filed with and approved by the commission.

Currently, the state’s interconnection and net metering rules were intertwined, applying to systems up to 50 kW in capacity that generate electricity using hydropower, wind or solar energy. While these appear to have a much wider coverage than the state’s current rules, the proposal omits any language about liability insurance requirements. The proposal also requires a utility external disconnect switch for all interconnections, even for small inverter-based systems.

All comments must be received by March 31, 2010, at which time there will also be a public hearing to consider adopting these rules.

The new rate setting model is an important milestone in achieving a comprehensive set of policies in the landmark energy agreement signed in October 2008 by Governor Linda Lingle, the State Department of Business, Economic Development and Tourism, the State Consumer Advocate, and the Hawaiian Electric utilities as part of the Hawaii Clean Energy Initiative.

Under that agreement the utilities committed to much more aggressive clean energy goals including increasing the proportion of renewable energy in Hawaii from 25% by the year 2020 to 40% by the year 2030 (among the most aggressive goals in the nation), adding new energy efficiency goals, implementing a feed-in tariff to speed the addition of renewable energy projects, and pursuing a smart grid that includes advanced metering to give customers more options such as residential time-of-use electric rates. The concept of decoupling, which has been adopted for utilities in California, Vermont, New York and many other progressive jurisdictions, was also endorsed by other participants in the docket including environmental and renewable energy groups.

Under a decoupled system, the PUC approves a revenue level based on the services it authorizes the company to undertake on behalf of customers. Rates are then adjusted based on varying sales levels, allowing the utility to continue recovering the costs of providing those services, but not earn additional profit from higher sales. This model provides greater support for energy efficiency and conservation and achievement of Hawaii’s clean energy goals. The PUC’s decision requires the Consumer Advocate and the Hawaiian Electric utilities to propose a final decision and order within 30 days, detailing the components and implementation for decoupling. Other parties in the docket will be able to comment on this proposed order. The PUC must issue a final decision and order before decoupling can be implemented.

Source: Hawaiian Electric Industries

Source: Los Angeles Times Report

Notably, language added to the rule that allows customers to request payment for annual net excess generation (NEG), thereby providing a default option for the indefinite rollover of NEG.  It appears that this payment would be calculated at the utility’s Time-of-Use avoided cost rate.   If this payment would be less than $25.00, the utility may credit the customer’s account through monthly billing instead.  

Some language was also removed from the REC ownership provision but this revision left a bit of uncertainty regarding REC ownership of rollover credits. Customers maintain net metering RECs associated with energy “produced and consumed” by the customer but did not specify whether RECs are forfeited to utilities upon monthly rollover or whether they remain with the system owner. The 2009 law instead specified that the customer may retain ownership of all RECs produced by the system.

Lastly, the rules provide that customers with one or more grid grid-integrated electric vehicles may be credited in kWhs for energy discharged to the grid from the vehicle’s battery at the same kWh rate that customer pays to charge the battery from the grid, à la net-metering.

Specifically, the bill eliminates the peak load limitation on the size of non-residential solar and wind systems that are eligible to participate in the net metering program. Non-residential solar and wind systems will now be allowed up to 25 kilowatts with the interconnection charges capped at $350 and $750 for solar and wind, respectively. For systems above 25 kilowatts, up to the overall cap of 2,000 kilowatts, the customer would be responsible for additional interconnection charges. Amendment of the net metering law for non-residential customers was an important recommendation from the State Energy Plan as a means to support the development of in-state energy supplies. The amendment also supports ‘45 by 15,’ the goal set by Governor Paterson for the State to meet 45 percent of its electricity needs by 2015 through increased energy efficiency and renewable energy. The ‘45 by 15′ clean energy goal would reduce the amount of electricity used in 2015 by 15 percent below forecasted levels, while simultaneously meeting 30 percent of the State’s remaining electricity needs through renewable resources. Achievement of this goal would create an estimated 50,000 jobs in the State.

Source: NY Governor’s Press Release

The town would qualify as a customer under the terms of the net metering statutes but the main issue in question is whether the town would be prohibited from aggregating the electrical consumption at two separately metered buildings.   The draft decision ventured that, “the express language of the statute does not place any limitations or restrictions on the location or arrangement of the electricity that is delivered to the customer-generator.”  In other words, after a careful review of the statutes, DPUC staff determined that the legislature could have placed limitations that would require generation and consumption to take place at the same meter, if that were the legislature’s intent. 

The draft decision continued on to say that the town may use the total aggregated amount of electricity received at the middle school or any other properties or facilities owned by the town, regardless of their physical proximity to one another, so long as the properties or facilities are within the same utility service territory.  The decision concluded that, “Such an application of the statute would further advance the apparent intent of the legislature to promote the development and use of renewable sources in the state in that customers would be allowed and encouraged to develop and install Class I renewable sources at the most favorable and compatible locations, thus promoting the efficient use of Connecticut’s land, energy and other natural resources.”

The DPUC expects to deliver a final decision on Wednesday, February 24, 2010.

Source: DPUC draft decision on meter aggregation

February 2010 interconnection  state-by-state table