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Net Metering and Interconnection A Policy Perspective

Net Metering and Interconnection A Policy Perspective. Brad Klein Staff Attorney Envt’l Law & Policy Center March 28, 2007. Policy and market mechanisms affecting distributed generation (DG). Diagram from Dick DeBlasio, NREL (2004). Interconnection Basics.

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Net Metering and Interconnection A Policy Perspective

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  1. Net Metering and Interconnection A Policy Perspective Brad Klein Staff Attorney Envt’l Law & Policy Center March 28, 2007

  2. Policy and market mechanisms affecting distributed generation (DG) Diagram from Dick DeBlasio, NREL (2004)

  3. Interconnection Basics • Interconnection = the physical connection between the customer-sited generator and the utility grid. • Interconnection problems one of the “principal obstacles” to effective adoption of DG (NREL, 2000) • Redundant and excessive technical requirements (e.g. safety studies, equipment testing and approval, engineering analysis, transmission studies, system upgrades) • Uncoordinated and expensive procedural requirements, fees, and application process delays • Insurance and indemnification requirements.

  4. Standardized Interconnection Rules • Establish clear and uniform technical requirements & approval procedures • FERC Small Generator Interconnection Procedures (Orders 2006 a & b) • Apply to “small” generators = 20 MW and under • Generally apply to transmission level interconnections • State rules • Usually administered by state utility commission • Generally apply to distribution level interconnections • “Model” state rules: e.g. IREC (2005); MADRI (2005); ELPC

  5. Interconnection Rules – important elements • Standardized technical requirements • Often based on IEEE 1547 and UL 1741 standards • “Expedited” review pathways • “plug & play” for small (e.g. <10 kW) pre-certified equipment • Streamlined review if pass technical screens • Separate pathway for non-exporting applications (e.g. CHP) • Clear fees and timelines • Standardized application forms and interconnection agreements • No discriminatory / redundant requirements (e.g. external disconnect switches, additional insurance requirements)

  6. States with Standardized Interconnection Rules Standards for net-metered systems only Standards for net-metered systems and other DG (November 2006)

  7. Net Metering – basics • Economic arrangement to simplify the reconciliation of value of customer produced power. • “True” net metering: 1:1 offset of power consumed by power produced (contrast to “dual” metering as in MO)

  8. Net Metering – Policy considerations • Eligible technologies? • Wind, solar, biomass, digesters, fuel cells, etc? • System size caps? (2 MW is now “best practice”) • Aggregate caps? • often limited to 0.1% to 5% of utility max peak load • Metering considerations • Flat rate, time of use, who pays? • Reconciliation of NEG? • Monthly, annual, carry forward, utility give-back? • Treatment of RECs?

  9. Net Metering www.dsireusa.org February 2007 NH: 25 MA: 60 RI: 25 * CT: 100 100 VT: 15/150 100 * * 50 100 * 40 * 25 30 * 10/400 20 * 25/100 * 25 * * 500 no limit * PA: 50/1,000/2,000 NJ: 2,000 DE: 25 MD: 500 DC: 100 VA: 10/500 * 40 * * 150 * * 25 2,000 10 25 * 1,000 15 * 20/100 * * 100 25/100 10 10/100 8,000 * 50 25/100 10 50 Net metering is available in 41 states + D.C. State-wide net metering for all utility types * State-wide net metering for certain utility types (e.g., IOUs only) Net metering offered by one or more individual utilities #s indicate system size limit (kW); in some cases limits are different for residential and commercial as shown

  10. Net Metering – Best Practices • Max system capacity > 2 MW • All renewables eligible (+ CHP) • All utilities must participate • All customer classes eligible • No limit on aggregate capacity • Annual reconciliation of NEG, or no expiration • Interconnection standards • No application fees, special charges, or tariff changes • Customer retains RECs

  11. Energy Policy Act of 2005 • Section 1254: Interconnection PUCs and certain nonregulated utilities must “consider” an interconnection standard. Must complete “determination” by 8/8/07. • Section 1251: Net Metering PUCs and certain nonregulated utilities must “consider” a net-metering standard. Must begin “consideration” by 8/8/07. Must complete “determination” by 8/8/08. (The other new PURPA standards relate to fuel diversity; fossil fuel generating efficiency; and time-based metering and communications – see EPAct §§ 1251-52)

  12. EXAMPLES • Iowa-- interconnection • Iowa Utility Board Docket NOI-06-4 • Issue: Should standards apply to Rural Electric Cooperatives? • Illinois -- interconnection • Illinois Commerce Commission Docket 06-0525 • Issue: How should standards be implemented? • Statewide administrative rule? • utility tariff? • utility website? • Missouri – See Warren Wood’s presentation at 1:30

  13. Resources • IREC: www.irecusa.org • Tracking state “consideration” of EPAct standards • Model net metering and interconnection rules • State-by-state tables of state rules & policies • DSIRE: Database of State Incentives for Renewables and Efficiency – www.dsireusa.org

  14. Contact information: Brad Klein Staff Attorney bklein@elpc.org 312-673-6500 www.elpc.org

  15. Thanks to: • Chris Cook, SunEdison LLC / IREC • Rusty Haynes, N.C. Solar Center, N.C. State University • Brad Johnson, ACN Energy Ventures / NREL

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