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Interconnection of Small Wind & Solar Systems to Distribution Utilities: A Cooperative Perspective. Patrick Parke Midwest Energy Hays, KS September 26, 2007. Outline. Governing statutes & regulations Interconnection tariff content (generic) Net metering. Governing Statutes. - PowerPoint PPT Presentation
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Interconnection of Small Wind & Solar Systems to Distribution Utilities:
A Cooperative Perspective
Patrick ParkeMidwest EnergyHays, KSSeptember 26, 2007
Outline
Governing statutes & regulations Interconnection tariff content (generic) Net metering
Governing Statutes
KSA 66-1,238 – Directed KCC to establish interconnection provisions for renewable sources
KSA 66-1,184 – Interconnection and buy-back KSA 17-4652 – Renewable generation coops FERC guidelines apply if the device is connected
to FERC-jurisdictional transmission lines or no KCC-approved guidelines are in place.
KSA 66-1,184 interconnection and buy-back provisions
Residential – 25 kW or less Commercial – 200 kW or less (previously 100) Appropriately sized for customer’s load Excess generation priced at 150% of system
average energy cost (Note: Customer gets value of full retail rate for every kWh displaced)
Dodge City CC/Cloud County CC – 1.5 MW Buy-back = 100% of system average energy cost
KSA 66-1,184 interconnection andbuy-back provisions (Cont.)
Annual bill credit/payment or when total = $25 Utility owns, supplies & maintains meter(s) Very general safety/protection guidelines Total connected capacity may be limited by
capacity of line or 4% of utility peak load Subject to KCC-approved tariffs or current FERC
procedures and regulations
Generic InterconnectionTariff Content
Applicability Process overview Technical requirements Cost responsibility Metering Boilerplate Sample agreements
Applicability
Who qualifies? Per KSA 66-1,184– Residential customers up to 25 kW– Commercial customers up to 200 kW– Schools (CCCC & DCCC) up to 1.5 MW
Utilities not prohibited from connecting larger systems
Process Overview – Series of steps largely dependent on generator size
Coops Utilizing FERC SGIA Model
Midwest Energy
10 kW Inverter Process Simplified (10 kW inverter)
Fast Track Process (those that pass certain screens)
Expedited (those that pass certain screens)
Study Process Standard
Typical Screens
Use of qualified inverter (UL 1741) Aggregate generation as % of annual peak
on that line segment % contribution to maximum fault current % of short circuit interrupting capacity Contribution to imbalances % voltage drop for motoring
Technical Requirements
Interconnection Operation Disconnection – For protection of people and
property on both sides of the meter.
Customers may not understand these provisions, but their vendors should!
Cost Responsibility: Interconnecting Customer
Review and study costs Interconnection equipment costs System modification costs May be a requirement of creditworthiness Minimal/no fees for smallest systems
– Midwest Energy, up to 10 kW = $0– SGIA model = $100
Utilities must provide cost estimates in advance (KSA 66-1,184)
Metering
KSA 66-1,184: Cost is utility’s responsibility For larger systems: Utility specific Meter type dependent on generator size and
contract provisions
Boilerplate
Definitions Insurance requirements Indemnifications Confidentiality provisions Notices Amendments Assignment Etc.
Typical Agreements
Combined Application & Agreement (10 kW category)
Review or Study Agreements Interconnection Agreement
Net Metering
Net Metering Definition
Customers use their own generation to offset consumption; electric meters turn backwards when electricity is generated in excess of actual load
Net Metering Definition (Cont.)
Net metering allows for the flow of electricity both to and from the customer through a single, bi-directional meter
Customers may receive retail prices for the excess electricity they generate, depending on the state
Avoided cost; average power cost or monthly market rate also used (per IREC)
Net Billing
A second meter measures electricity that flows back to the utility
Utility purchases the power measured by the second meter at rate reflecting variable energy cost (w/o capacity cost)
The amount that the utility pays the customer is netted against the amount that the customer owes the utility
Reasons Cited for Allowing Net Metering
Easy to administer – standard electric meter registers net flow (w/o TOU info)
Subsidy encourages investment in renewable energy technologies
Allows customers to "bank" their energy and use it a different time than it is produced, i.e., another subsidy, especially with wind
Components of Retail Service
When a utility sells electric energy to the customer, the utility is selling 3 services– Generation– Transmission– Distribution
With rare exceptions, all three services are “firm”, but wind is an intermittent resource
110 MW Gray County Wind Farm2005 Operating History
18% of year: output was 0 MW
32% of year: output was <10% capacity
66% of year: output was <50% capacity
22 occasions, the output dropped by 55 MW or more in a
ten-minute period; 4 occasions by more than 99 MW.
38 occasions, the output increased by 55 MW or more in a
ten-minute period; 1 occasion by more than 99 MW.
Wind is an intermittent energy source, not firm capacity
Net Metering Subsidy
Customer generation is non-firmCustomer does not own transmission or
distribution (T&D); significant portion of the costs in retail rates
Payment calculated using the firm retail rate is too high for intermittent power produced and absence of T&D functions
Net Metering Subsidy (Cont.)
Subsidy is paid by remaining customers I.e., a subsidy from those who cannot
afford generators to those who can; not everyone can afford a $30,000 - $40,000 wind machine and tower. (Bergey Excel)
Environmental benefits flow to all citizens; cost of net metering subsidy falls on customers of mostly rural systems
Kansas Coops Demonstrating Support for Renewable Energy
Concern with net metering ≠ opposition to renewable energy
Sunflower: 100 MW of windMidwest Energy: 25 MW contracted; 25 MW
under negotiationKEPCo gaining access via supply contracts 150 MW = 20,000 Bergey Excel 7.5 kW
units
Smart Shopping
Typical wholesale wind cost <5 cents/kWh
Average residential rate >10 cents/kWh
Net metering means the utility pays firm
retail rates for a wholesale commodity
Why should the coop pay 10 cents for
what it can buy at under 5 cents?
An Economist’s Perspective: Two Policy Questions
Does net metering lead to greater efficiency?
Not if the result is paying double for wind energy!
Does net metering lead to greater equity?Not if those who can afford renewable
generators are subsidized by those who cannot.
The End