Interconnection & Net Metering in Massachusetts

INTERCONNECTIINTERCONNECTION & NET ON & NET

METERINGMETERING IN IN MASSACHUSETTMASSACHUSETT

SS

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

DISCLAIMERDISCLAIMER

SLIDE 2 MA DEPARTMENT OF PUBLIC UTILITIES

OutlineOutlineBackgroundBackgroundBasicsBasicsD.P.U. 11-75D.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 Commissiono Ann G. Berwick, Chairo Jolette A. Westbrook, Commissionero David W. Cash, Commissioner

SLIDE 3

DEPARTMENT OF DEPARTMENT OF PUBLIC UTILITIES PUBLIC UTILITIES

(DPU)(DPU)

MA DEPARTMENT OF PUBLIC UTILITIES


INTERCONNECTIONINTERCONNECTION


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; oro Power Quality

INTERCONNECTION: INTERCONNECTION: BIG PICTUREBIG PICTURE



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

INTERCONNECTION: INTERCONNECTION: BIG PICTURE CONT.BIG PICTURE CONT.



o Interconnection process is uniform for all four distribution companies in MAo 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 MATHE PROCESS IN MA

MA DEPARTMENT OF PUBLIC UTILITIESSLIDE 7


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 SIMPLIFIED PROCESSPROCESS



Translation

o Applies to small projects (e.g. residential) with approved equipment

Very Quick Process…Normally

o Expeditedo Facilities

that pass screens on radial circuits

o Standardo All other

projects

EXPEDITED/EXPEDITED/STANDARDSTANDARD



Translation

o Expedited = complicated

o Standard = very complicated

Can take a very long

time

EngineeringTerms

oExpedited

o Facilities that pass screens on radial circuits

oStandard

o All other projects

o Simplified Process = $0

o Expedited & Standard Process = $3/kWo Minimum of $300o Maximum of $2,500

APPLICATION COSTSAPPLICATION COSTS



o Studies can be:o Time consuming; ando Costly

o Cost is borne by applicant

INTERCONNECTION INTERCONNECTION STUDIESSTUDIES



o Utility Upgrade Costso Applicant pays for all necessary upgradeso Can be very costly

o Witness Testso Depending on the interconnection process,

applicant may have to pay for the Distribution Company to inspect the facility

o Relatively inexpensive

OTHER COSTSOTHER COSTS



1. Submit Application

2. Complete Studies (if needed)

3. Signed Interconnection Service Agreement (“ISA”)

4. Utility Upgrades (if needed)

5. Witness Test

INTERCONNECTION INTERCONNECTION MILESTONESMILESTONES



o CEC & DOER commissioned an interconnection report in 2011

o DPU opened an investigation in order to address interconnection issues in 2011

o Interconnection Working Group submitted a report to the DPU on 9/14/12

o DPU held an interconnection technical conference on 10/24/12

o Next steps TBD

D.P.U. 11-75: D.P.U. 11-75: INTERCONNECTION INTERCONNECTION

NOINOI



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-ISSUES IN D.P.U. 11-7575



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

www.mass.gov/dpu Questions?

http://www.mass.gov/dpu

NET METERING NET METERING


SLIDE 17

o Net metering in MA since 1982o ≤ 30 kW systems

o Expanded in 1997o ≤ 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 HISTORY OF NET METERING IN METERING IN

MASSACHUSETTSMASSACHUSETTS

SLIDE 18

OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey Qs


o Net metering is an incentive program to encourage customers to install distributed generationo Customers offset own electricity usageo Customers are compensated for any

electricity they generate and don’t use

NET METERING:NET METERING:BASIC CONCEPTBASIC CONCEPT

SLIDE 19



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: NET METERING: BASIC CONCEPT BASIC CONCEPT

(CONT.)(CONT.)

SLIDE 20



o Illustrative Example

o PV System generates60,000 kWh/month

o School monthso Electricity usage = 80,000 kWho School is charged for 20,000 kWh

o Summer monthso Electricity usage = 10,000 kWho School is credited for 50,000 kWh

NET METERING EXAMPLE: NET METERING EXAMPLE: SOLAR PV FACILITY ON SOLAR PV FACILITY ON

SCHOOLSCHOOL

SLIDE 21


= Excess Generation


o Net metering system can be bigger than your load

o No minimum load is requiredo Load can be “parasitic”

http://www.panoramio.com/photo/13362450

Wind Turbine at Jiminy Peak Mountain ResortHancock, MA

SLIDE 22


HOW “BIG” CAN WE HOW “BIG” CAN WE GO?GO?


o Private entitieso 2 MW per facilityo Facility =

o DG on a parcel of lando 1 interconnection pointo 1 utility meter

o Cannot have multiple “facilities” on one parcel of land


(CONT.)(CONT.)

4/19/12SLIDE 23

OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey QsTipsTips


o Public entitieso Can develop up to a total of 10 MW of NMo 2 MW per unito Unit =

o For wind- a turbineo For solar- an inverter (see D.P.U. 11-11-C)o For Agricultural and anaerobic digestion- engine

or combustion turbine


(CONT.)(CONT.)

4/19/12SLIDE 24

OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey QsTipsTips


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:KEY QUESTION:WHO CAN BE A HOST WHO CAN BE A HOST

CUSTOMER?CUSTOMER?

SLIDE 25



SLIDE 26

SchoolSchoolDistribution Distribution CompanyCompany

Muni Acct


HOST CUSTOMER HOST CUSTOMER EXAMPLEEXAMPLE

Name on Account =Host Customer


o Generation is tracked on a meter in kWh, but credits are a monetary amounto Excess generation (kWh) results in net metering

creditso Net metering credit = $ credit

o Credits offset charges on electricity bills

o Credits never expire (they “rollover”)

KEY QUESTION:KEY QUESTION:WHAT IS A NET METERING WHAT IS A NET METERING

CREDIT?CREDIT?

SLIDE 27



SLIDE 28


WHAT IS A NET METERING WHAT IS A NET METERING CREDIT?CREDIT?(CONT.)(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 $/monthDistribution Charge ¢/kWh *Transmission Charge ¢/kWh

Transition Charge ¢/kWh

System Benefit ChargeDSM (EE) ¢/kWh

RE ¢/kWhSupply 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)


o Calculation of credits depends on the Host Customer’s rate classo Look at your electric bill

o Illustrative Example:o Excess of 100 kWho Components of rate class

= $0.10/kWho Credit = $10

EXAMPLE: EXAMPLE: CALCULATION OF NET CALCULATION OF NET METERING CREDITSMETERING CREDITS

SLIDE 29

Landfill in Easthampton, MA

Electricity (kWh) x Rate ($/kWh) = NMC ($)



o Option 1o Use the credit for the Host Customer’s electric

bill

o Option 2o 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:KEY QUESTION:WHAT CAN A HOST CUSTOMER DO WHAT CAN A HOST CUSTOMER DO

WITHWITHNET METERING CREDITS?NET METERING CREDITS?

SLIDE 30



SLIDE 31

WHAT CAN WE DO WITHWHAT CAN WE DO WITHNET METERING CREDITS? NET METERING CREDITS?

(CONT.)(CONT.)


Allocating monetary credits to electric bills


4/19/12

Allocation only in same:

(1)Distribution company service territory; and

(2)ISO-NE load zone

NEMA

SEMA

WCMA

SLIDE 32

WHAT CAN WE DO WITHWHAT CAN WE DO WITHNET METERING CREDITS? NET METERING CREDITS?

(CONT.)(CONT.)


o Statute:o 3% cap on “private” projectso 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:KEY QUESTION:HOW MUCH NET METERING HOW MUCH NET METERING

IN MA?IN MA?

SLIDE 33



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 IS THERE A NET METERING “QUEUE?” METERING “QUEUE?”

SLIDE 34



www.mass.gov/dpu

Nathan Phelps, EconomistMA Department of Public Utilities

One South StationBoston, MA

(617) [email protected]

Thank YouThank You

o Host Customer does not have to own:o The net metering facility; oro The property on which the facility is located

o Host Customer has1. an account with the utility; and

2. a net metering facility “behind the meter”

WHO CAN BE A HOST WHO CAN BE A HOST CUSTOMER?CUSTOMER?

(FURTHER EXPLAINED)(FURTHER EXPLAINED)

SLIDE 36



o Third-Party Ownership is permissible in MAo 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:KEY QUESTION:CAN A 3CAN A 3RDRD PARTY OWN THE PARTY OWN THE

FACILITY?FACILITY?

SLIDE 37



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

ELIGIBILITYELIGIBILITY


OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey QsAdditional Additional InformationInformation

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

DISCLAIMERDISCLAIMER

SLIDE 39



ILLUSTRATIVE ILLUSTRATIVE EXAMPLE:EXAMPLE:MODEL AMODEL A



ILLUSTRATIVE ILLUSTRATIVE EXAMPLE:EXAMPLE:MODEL BMODEL B



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 RENEWABLE ENERGY CERTIFICATES (RECS)CERTIFICATES (RECS)

= Customer gets the RECsSLIDE 42 MA DEPARTMENT OF PUBLIC UTILITIES


MODEL SCHEDULE ZMODEL SCHEDULE Z

OutlineOutlineBackgroundBackgroundBasicsBasicsKey IssuesKey IssuesFutureFutureAdditional Additional InformationInformation


MODEL SCHEDULE Z MODEL SCHEDULE Z (CONT.)(CONT.)















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Interconnection & Net Metering in Massachusetts