NET METERING IN MASSACHUSETTS - Rexel Energy Solutions
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Interconnection and Net Metering in Massachusetts Nathan Phelps Economist Massachusetts Department of Public Utilities
Transcript of NET METERING IN MASSACHUSETTS - Rexel Energy Solutions
Interconnection and Net Metering
in Massachusetts
Nathan Phelps
Economist
Massachusetts Department of Public Utilities
Comments reflect my personal observations, and do not necessarily reflect the position of the Commonwealth of Massachusetts, the Department of Public Utilities, or the DPU Commissioners
DISCLAIMER
9/6/12 SLIDE 2 MA DEPARTMENT OF PUBLIC UTILITIES
Outline
Background
Basics
D.P.U. 11-75
o DPU Mission Statement
o The Department is responsible for oversight of investor-owned electric power, natural gas, and water industries in the Commonwealth; developing alternatives to traditional regulation; monitoring service quality; regulating safety in the transportation and gas pipeline areas; and for the siting of energy facilities. The mission of the Department is to ensure that utility consumers are provided with the most reliable service at the lowest possible cost; to protect the public safety from transportation and gas pipeline related accidents; to oversee the energy facilities siting process; and to ensure that residential ratepayers' rights are protected
o Commission
o Ann G. Berwick, Chair
o Jolette A. Westbrook, Commissioner
o David W. Cash, Commissioner
9/6/12 SLIDE 3
DEPARTMENT OF PUBLIC
UTILITIES (DPU)
MA DEPARTMENT OF PUBLIC UTILITIES
Outline
Background
Basics
D.P.U. 11-75
INTERCONNECTION
9/6/12 MA DEPARTMENT OF PUBLIC
UTILITIES SLIDE 4
o Interconnection is the process by which an electricity generating facility is integrated into the electricity grid
o Interconnecting facility cannot impact:
o Safety;
o Reliability; or
o Power Quality
9/6/12
INTERCONNECTION:
BIG PICTURE
SLIDE 5 MA DEPARTMENT OF PUBLIC UTILITIES
Outline
Background
Basics
D.P.U. 11-75 Engineering,
Engineering, and
Engineering
o For the distribution companies, interconnection is normally for distributed generation (“DG”)
o Interconnection is technology neutral
o NOTE: Interconnection does not determine how the owner of the facility will be compensated for the output of the facility
9/6/12
INTERCONNECTION:
BIG PICTURE CONT.
SLIDE 6 MA DEPARTMENT OF PUBLIC UTILITIES
Outline
Background
Basics
D.P.U. 11-75
o Interconnection process is uniform for all four distribution companies in MA
o Municipal light districts do not have to follow the standardized interconnection process
o There is also an interconnection process at ISO-NE
THE PROCESS IN MA
9/6/12 MA DEPARTMENT OF PUBLIC UTILITIES SLIDE 7
Outline
Background
Basics
D.P.U. 11-75
Engineering Terms
o For Projects:
o 10 kW or less on single-phase radial service w/inverter
o 25 kW or less on three-phase radial service w/inverter
o 15 kW or less on spot network w/inverter may apply
o Inverters must be IEEE 1547 compliant and tested at a national lab
SIMPLIFIED PROCESS
9/6/12 MA DEPARTMENT OF PUBLIC UTILITIES SLIDE 8
Outline
Background
Basics
D.P.U. 11-75
Translation
o Applies to small projects (e.g. residential) with approved equipment
Very Quick
Process…
Normally
o Expedited
o Facilities that pass screens on radial circuits
o Standard
o All other projects
EXPEDITED/
STANDARD
9/6/12 MA DEPARTMENT OF PUBLIC UTILITIES SLIDE 9
Outline
Background
Basics
D.P.U. 11-75
Translation
o Expedited = complicated
o Standard = very complicated
Can take a
very long
time
Engineering Terms
o Expedited
o Facilities that pass screens on radial circuits
o Standard
o All other projects
o Simplified Process = $0
o Expedited & Standard Process = $3/kW
o Minimum of $300
o Maximum of $2,500
APPLICATION COSTS
9/6/12 MA DEPARTMENT OF PUBLIC UTILITIES SLIDE 10
Outline
Background
Basics
D.P.U. 11-75
o Studies can be: o Time consuming; and
o Costly
o Cost is borne by applicant
INTERCONNECTION STUDIES
9/6/12 MA DEPARTMENT OF PUBLIC UTILITIES SLIDE 11
Outline
Background
Basics
D.P.U. 11-75
o Utility Upgrade Costs
o Applicant pays for all necessary upgrades
o Can be very costly
o Witness Tests
o Depending on the interconnection process, applicant may have to pay for the Distribution Company to inspect the facility
o Relatively inexpensive
OTHER COSTS
9/6/12 MA DEPARTMENT OF PUBLIC UTILITIES SLIDE 12
Outline
Background
Basics
D.P.U. 11-75
1. Submit Application
2. Complete Studies (if needed)
3. Signed Interconnection Service Agreement (“ISA”)
4. Utility Upgrades (if needed)
5. Witness Test
INTERCONNECTION
MILESTONES
9/6/12 MA DEPARTMENT OF PUBLIC UTILITIES SLIDE 13
Outline
Background
Basics
D.P.U. 11-75
o CEC & DOER commissioned an interconnection report (“KEMA Report”)
o The KEMA report was submitted to the DPU
o DPU opened an investigation in order to address interconnection issues
o Interconnection Working Group is expected to submit a report to the DPU shortly
D.P.U. 11-75:
INTERCONNECTION NOI
9/6/12 MA DEPARTMENT OF PUBLIC UTILITIES SLIDE 14
Outline
Background
Basics
D.P.U. 11-75
o Transparency
o Application Volume
o Interconnection Costs
o State v. federal jurisdiction
o Process review and redesign
o High amounts of DG on circuits
o Dispute resolution
o Interconnection Education
o Network Interconnections
o Organization and staffing of Distribution Companies
ISSUES IN D.P.U. 11-75
9/6/12 MA DEPARTMENT OF PUBLIC UTILITIES SLIDE 15
Outline
Background
Basics
D.P.U. 11-75
Objective
“[E]nsure an efficient and effective
interconnection process that will foster
continued growth of distributed generation
in Massachusetts”
D.P.U. 11-75 at 2-3
NET METERING
9/6/12 MA DEPARTMENT OF PUBLIC
UTILITIES SLIDE 17
o Net metering in MA since 1982 o ≤ 30 kW systems
o Expanded in 1997 o ≤ 60 kW systems
o Significantly revised by the Green Communities Act in 2008
o Further amended by Session Law in 2010
o Recently amended by Session Law in 2012
HISTORY OF NET METERING
IN MASSACHUSETTS
9/6/12 SLIDE 18
Outline
History
Basics
Key Qs
MA DEPARTMENT OF PUBLIC UTILITIES
o Net metering is an incentive program to encourage customers to install distributed generation
o Customers offset own electricity usage
o Customers are compensated for any electricity they generate and don’t use
9/6/12
NET METERING:
BASIC CONCEPT
SLIDE 19
Outline
History
Basics
Key Qs
MA DEPARTMENT OF PUBLIC UTILITIES
o If consumption exceeds generation, customer pays for net kWh consumed
o If generation exceeds consumption, customer receives credit on bill for net excess generation
NET METERING:
BASIC CONCEPT (CONT.)
9/6/12 SLIDE 20
Outline
History
Basics
Key Qs
MA DEPARTMENT OF PUBLIC UTILITIES
o Illustrative Example
o PV System generates 60,000 kWh/month
o School months
o Electricity usage = 80,000 kWh
o School is charged for 20,000 kWh
o Summer months
o Electricity usage = 10,000 kWh
o School is credited for 50,000 kWh
NET METERING EXAMPLE:
SOLAR PV FACILITY ON SCHOOL
9/6/12 SLIDE 21
Outline
History
Basics
Key Qs
= Excess Generation
MA DEPARTMENT OF PUBLIC UTILITIES
o Net metering system can be bigger than your load
o No minimum load is required
o Load can be “parasitic”
http://www.panoramio.com/photo/13362450 9/6/12
Wind Turbine at
Jiminy Peak
Mountain Resort
Hancock, MA
SLIDE 22
Outline
History
Basics
Key Qs
HOW “BIG” OF A FACILITY?
MA DEPARTMENT OF PUBLIC UTILITIES
o 220 C.M.R. § 18.02:
o Host Customer means a Customer with a Class I, II, or III Net Metering Facility that generates electricity on the Customer’s side of the meter
o Intentionally broad definition
KEY QUESTION:
WHO CAN BE A HOST CUSTOMER?
9/6/12 SLIDE 23
Outline
History
Basics
Key Qs
MA DEPARTMENT OF PUBLIC UTILITIES
SLIDE 24
School Distribution
Company
Muni
Acct
Outline
History
Basics
Key Qs
HOST CUSTOMER EXAMPLE
Name on Account =
Host Customer
o Generation is tracked on a meter in kWh, but credits are a monetary amount
o Excess generation (kWh) results in net metering credits
o Net metering credit = $ credit
o Credits offset charges on electricity bills
o Credits never expire (they “rollover”)
KEY QUESTION:
WHAT IS A NET METERING CREDIT?
9/6/12 SLIDE 25
Outline
History
Basics
Key Qs
MA DEPARTMENT OF PUBLIC UTILITIES
9/6/12 SLIDE 26
Outline
History
Basics
Key Qs
WHAT IS A NET METERING CREDIT?
(CONT.)
o Credits for wind, solar, and agricultural facilities are close to the retail rate
Units Class I
Class I-
Wind,
Solar, and
AG
Class II Class III
≤ 60 kW ≤ 60 kW>60 kW - ≤
1 MW
>1 MW -
≤2 MW
Customer Charge $/month
Distribution Charge ¢/kWh *
Transmission Charge ¢/kWh
Transition Charge ¢/kWh
System Benefit Charge
DSM (EE) ¢/kWh
RE ¢/kWh
Supply Basic Service ¢/kWh
GenerationAverage Monthly Clearing
Price at the ISO-NE¢/kWh
Credit Calculation
Delivery
* Only applies to municipal or governmental Class III
Facility Size or Unit Size (Govt)
MA DEPARTMENT OF PUBLIC UTILITIES
o Calculation of credits depends on the Host Customer’s rate class o Look at your electric bill
o Illustrative Example: o Excess of 100 kWh
o Components of rate class = $0.10/kWh
o Credit = $10
EXAMPLE: CALCULATION OF
NET METERING CREDITS
9/6/12 SLIDE 27
Landfill in Easthampton, MA
Electricity (kWh) x Rate ($/kWh) = NMC ($)
Outline
History
Basics
Key Qs
MA DEPARTMENT OF PUBLIC UTILITIES
o Option 1 o Use the credit for the Host Customer’s electric
bill
o Option 2 o Host Customer can allocate credits to different
accounts (yours or other customers)
o Thus, generation in one location can offset electricity costs in another location (a.k.a. virtual net metering)
KEY QUESTION:
WHAT CAN A HOST CUSTOMER DO WITH
NET METERING CREDITS?
9/6/12 SLIDE 28
Outline
History
Basics
Key Qs
MA DEPARTMENT OF PUBLIC UTILITIES
9/6/12 SLIDE 29
WHAT CAN WE DO WITH
NET METERING CREDITS? (CONT.)
Outline
History
Basics
Key Qs Allocating
monetary credits to electric bills
MA DEPARTMENT OF PUBLIC UTILITIES
o Statute:
o 3% cap on “private” projects
o 3% cap on “public” projects
o Caps are based on the distribution company’s peak demand
o Small net metering systems are exempt from the net metering caps
KEY QUESTION:
HOW MUCH NET METERING IN MA?
9/6/12 SLIDE 30
Outline
History
Basics
Key Qs
MA DEPARTMENT OF PUBLIC UTILITIES
Increased
as of 8/3/12
o Soon, but not yet
o The DPU is required to implement a “System of Assurance”
o The System of Assurance will enable customers to know whether they will be able to net meter in the future
o Implementation is ongoing
IS THERE A NET METERING
“QUEUE?”
9/6/12 SLIDE 31
Outline
History
Basics
Key Qs
MA DEPARTMENT OF PUBLIC UTILITIES
www.mass.gov/dpu
Nathan Phelps, Economist MA Department of Public Utilities
One South Station
Boston, MA
(617) 305-3707
Thank You
o Host Customer does not have to own:
o The net metering facility; or
o The property on which the facility is located
o Host Customer has
1. an account with the utility; and
2. a net metering facility “behind the meter”
WHO CAN BE A HOST CUSTOMER?
(FURTHER EXPLAINED)
6/25/12 SLIDE 33
Outline
History
Basics
Key Qs
MA DEPARTMENT OF PUBLIC UTILITIES
o Third-Party Ownership is permissible in MA o See 220 C.M.R. 18.09(5)
o Allows for power purchase agreements (PPAs) for distributed generation
o Very common for governmental projects in order to monetize federal tax credits and depreciation
KEY QUESTION:
CAN A 3RD PARTY OWN THE FACILITY?
9/6/12 SLIDE 34
Outline
History
Basics
Key Qs
MA DEPARTMENT OF PUBLIC UTILITIES
o 220 C.M.R. 18.06 states: o Distribution Companies shall not provide
Net Metering services to a Host Customer who is an electric company, generation company, aggregator, supplier, energy marketer, or energy broker, as those terms are used in M.G.L. c. 164, §§ 1 and 1F and 220 CMR 11.00
o Host customers must self-certify that they are not one of the above entities
ELIGIBILITY
6/25/12 SLIDE 35 MA DEPARTMENT OF PUBLIC UTILITIES
Outline
History
Basics
Key Qs
Additional
Information
o The next two slides are for illustrative and informational purposes only
o Each situation is different
o All customers – including Host Customers – are encouraged to seek independent professional advice on their options
DISCLAIMER
6/25/12 SLIDE 36
Outline
History
Basics
Key Qs
Additional
Information
MA DEPARTMENT OF PUBLIC UTILITIES
ILLUSTRATIVE EXAMPLE:
MODEL A
6/25/12 SLIDE 37 MA DEPARTMENT OF PUBLIC UTILITIES
Outline
History
Basics
Key Qs
Additional
Information
ILLUSTRATIVE EXAMPLE:
MODEL B
6/25/12 SLIDE 38 MA DEPARTMENT OF PUBLIC UTILITIES
Outline
History
Basics
Key Qs
Additional
Information
o 220 C.M.R. 18.01(1) states:
o The provision of Net Metering services does not entitle Distribution Companies to ownership of, or title to, the renewable energy or environmental attributes, including renewable energy certificates, associated with any electricity produced by a Net Metering facility
RENEWABLE ENERGY
CERTIFICATES (RECS)
6/25/12
= Customer gets the RECs SLIDE 39 MA DEPARTMENT OF PUBLIC UTILITIES
Outline
History
Basics
Key Qs
Additional
Information
MODEL SCHEDULE Z
6/25/12
Outline
Background
Basics
Key Issues
Future
Additional
Information
SLIDE 40 MA DEPARTMENT OF PUBLIC UTILITIES
MODEL SCHEDULE Z (CONT.)
6/25/12 SLIDE 41 MA DEPARTMENT OF PUBLIC UTILITIES
Outline
History
Basics
Key Qs
Additional
Information
MODEL SCHEDULE Z (CONT.)
6/25/12 SLIDE 42 MA DEPARTMENT OF PUBLIC UTILITIES
Outline
History
Basics
Key Qs
Additional
Information
MODEL SCHEDULE Z (CONT.)
6/25/12 SLIDE 43 MA DEPARTMENT OF PUBLIC UTILITIES
Outline
History
Basics
Key Qs
Additional
Information
MODEL SCHEDULE Z (CONT.)
6/25/12 SLIDE 44 MA DEPARTMENT OF PUBLIC UTILITIES
Outline
History
Basics
Key Qs
Additional
Information
MODEL SCHEDULE Z (CONT.)
6/25/12 SLIDE 45 MA DEPARTMENT OF PUBLIC UTILITIES
Outline
History
Basics
Key Qs
Additional
Information
