June 2009 IREC “Connecting to the Grid” Newsletter
Editor: Laurel Varnado NC Solar Center, NC State University HOW TO SUBSCRIBE The Connecting to the Grid newsletter is published electronically every month by the Interstate Renewable Energy Council, Inc. (IREC) and the North Carolina Solar Center at North Carolina State University. This is a free publication. Click here to subscribe. FORMAT While customer-sited net…
Editor: Laurel Varnado
NC Solar Center, NC State University
HOW TO SUBSCRIBE
The Connecting to the Grid newsletter is published electronically every month by the Interstate Renewable Energy Council, Inc. (IREC) and the North Carolina Solar Center at North Carolina State University. This is a free publication. Click here to subscribe.
While customer-sited net metering and interconnection are primarily state issues, they are also becoming important on a regional basis. This newsletter has been designed to capture any subtle, emerging regional trends. The state news is presented in geographic categories, primarily because the standard NERC and/or RTO/ISO regions do not always align with state boundaries. Please direct comments and questions about the newsletter to Laurel Varnado at [email protected].
Note: Scroll to the bottom of this page to download complete newsletter.
WHAT’S NEW AS OF JUNE 2009?
Note from the Editor – FAQ’s on REC Ownership
The topic of Renewable Energy Credits (RECs), a.k.a Green Tags or Tradable Renewable Energy Certificates, has spurred some serious dialogue in the net metering policy sphere over the past few months. In short, REC’s enable the environmental (non-power) attributes of renewable generation to be unbundled or considered separately from the associated energy commodity. Below I have compiled a list of questions frequently asked about RECs and provided some brief responses.
What constitutes a REC? One REC is almost always equal to one MWh of renewable generation; beyond that however, the exact make-up and definition of a REC varies by state. There has been considerable debate over whether a REC is synonymous with, or at least includes, a carbon emission reduction or whether the carbon piece can be unbundled and sold separately from the REC. Most state statutes do not specify this in their definition of a REC, leaving the definition somewhat ambiguous such as ‘environmental attribute of renewable generation’. Delaware and North Carolina specifically state that a REC does not include an emission reduction credit while several others (CO, NY, WA, AZ) declare that REC’s include all non-power attributes, including carbon emission reduction.
What’s the status with state net metering policies and REC ownership? State net metering policies are fairly equally divided between addressing and ignoring REC ownership. Currently, 22 states have laws that permit net metering customers to keep all or a portion of RECs, though some have creative caveats for the treatment of those credits. Over half of these 22 states confer outright ownership of all RECs to the customer-generator. A few have provisions in which customers must surrender RECs for a certain number of years when accepting investor-owned utility incentive payments (the utility is essentially paying for those RECs upfront). Others have alternative arrangements that require the utility to pay the customer for RECs or delineate a method by which the customer and utility may share customer-sited RECs. [See newsletter for complete article]
The legislative season is winding down in most states and we’ve seen quite a few updates to net metering and interconnection policies as a result. So far we’ve seen interesting developments with some common themes of allowing third-party participation in net metering and expanding net metering to larger sizes and more types of renewable generation. We’ve also seen more interest in allowing shared net metering systems. Here are the highlights from the legislative season:
Northeast: Recently Maine enacted LD 336, which allows shared ownership of net billing facilities up to 660 kW and includes Micro CHP as an eligible facility. Vermont made the legislative news this month by passing an energy bill (H.B. 446) that requires retail utilities to offer a Feed-in Tariff for renewable generators.
Mid-Atlantic: In May, Maryland enacted HB 1057 and SB 981, which clarify the definition of a net metering customer to include those working with third-party contractors, and add micro CHP as an eligible system type. Last month Virginia enacted HB 2155 which included provisions to allow utilities to approve higher system caps, allows customers on TOU tariffs to participate in net metering and specified customer ownership of RECs. Virginia also enacted H.B. 2171, which specifies that a farm, or aggregation of farms, operating a waste-to-energy facility may not be considered a public utility. Now that the SCC has adopted comprehensive interconnection rules, Virginia is really stepping up as a key policy player in the region.
Midwest: Last month Kansas and Nebraska made headlines by enacting state-wide net metering laws. The addition of these two states to the net metering map bring the nation’s total up to 42 state-wide net metering polices (plus a few other states in which utilities voluntarily offer programs). Minnesota also enacted a comprehensive energy bill that authorizes a community-based wind project and requires utilities to develop standard offer contracts for projects under 5 MW, among other things.
Southern: We have seen a whole slew of NM/IC bills try and then fail at state legislatures around the South. There has been some advancement; however, through other renewable energy policies like tax credits. Refer to DSIRE for more information on these.
Western: In April, Colorado enacted SB 51 which codifies that third-party developers are not public utilities so long as the systems they own supply no more than 120% of the customer’s average annual consumption and allows a customer to make a one-time election to have indefinite rollover of excess generation instead of an annual true-up at avoided cost rates. Nevada enacted a bill (AB 186) that specified third-party-owned systems are eligible for net metering. This was ruled upon last year through a Nevada PUC ruling but this legislative action strengthens the rule considerably.
Other: Hawaiian Governor Linda Lingle has so far signed legislation (HB 1270) which removes a statutory cap on rates paid to independent renewable energy power producers. On a related note, she has also signed legislation (SB 1260) that sews up a loophole that existed in the state’s air pollution laws, which allowed large polluters — such as power plants and refineries — to avoid paying per-ton penalties on excessive emissions.
State News in Detail:
Maine – Governor signs net metering bill, authorizing shared system net metering
New Hampshire – PUC schedules public hearing on proposed Net Metering rules
New York – DPS issues favorable order regarding standby charges for renewable generation
Vermont – Energy bill enacted, creating a Feed-in Tariff; Proposed net metering rules become effective
Maryland – Governor signs bill to expand definition of customer-generator for NM
Virginia – SCC adopts comprehensive interconnection procedures
West Virginia – Governor rejects net metering legislation
Kansas – Governor signs net metering legislation
Minnesota – Governor signs energy bill
Nebraska – Net metering bill signed into law
South Dakota – PUC approves Small Generator Interconnection Rules for systems up to 10 MW
Georgia – PSC wins DOE award to study barriers to solar energy deployment
North Carolina – NCUC approves NM tariffs
California – Report issued on FiT policy options
Nevada – Governor signs bill regarding 3rd party ownership of net metering
New Mexico – PRC opens docket to address NEG rollover for net metering
Washington – Community solar bill signed
Hawaii – Governor signs bill to lift avoided-cost payment cap for certain renewable generation
Xcel asks state PUC to rule on ownership of renewable energy credits
China eyes 20 % renewable energy by 2020
U.S. demand for residential solar rising in ’09
Schools Line Up to Install Solar Panels
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