Distributed Generation Chau Nguyen, Pricing & Sales Support 08-10.15

What is Distributed Generation? Abbreviates as “D.G.” Includes solar, wind, geothermal and other alternative energy sources Enables customers to generate their own electricity to offset energy purchased from City. Provides option for consumers to be “green”er

Typical Solar Installation Source: Washington Post, “Utilities take aim at solar roofs”, 03/07/15

What is Net Metering? A mechanism that enables customers with Distributed Generation to offset the energy they use with generated energy and to receive credit for the energy they put back to the grid. For example: Customer X uses about 1000 kWh per month. Customer has a D.G. system that generates 200 kWh. Customer may be billed on net consumption of 900 kWh and received credit for 100 kWh they sold back to utility. Requires special metering that tracks how much energy flow between utility to customer, and vice versa.

Legal Considerations for DG and Net Metering GA law, enacts in July 1, 2015, enables cost of Solar to be financed – making it more affordable for consumers to adopt D.G. Existing law already requires utility to allow net metering; also requires utility to purchase excess energy from customer that is up to 0.2% of utility’s peak load In other words, City’s 2014 peak load was 71,566 kW. City is legally required to purchase 0.2% of peak load from customers who has D.G.; equates to 143 kW Any DG beyond 0.2% can be put on a waiting list. Near-term unknown: What would happen if 0.2% is removed and the City is required to purchase a greater capacity from a customer’s DG?

Required Buy-back

Challenges with D.G. MEAG fixed costs accounts for 77% of every dollar charged on MEAG monthly bill In 2014, City pays MEAG an average of $2,690,000 per month, of which about $2,071,000 is fixed costs City still has to pay full fixed costs even if City purchased 0 kWh. Because customers who have Distributed Generation (D.G.) will use less energy, their electric bill is reduced; hence they pay less than non-DG customer toward MEAG fixed costs The cost of maintaining City electric system General Fund cost-allocations that funds City operation Customers who can afford D.G. is subsidized by seniors, low-income households Customers with D.G. contribute less to costs while non-DG customers contribute more toward costs.

Fixed Costs Exposure

ECG to Provide Distributed Generation Tariff ECG is providing document template for City to use and customize. These documents enable customers who wants D.G. to tie to the City’s electric system and to sell excess energy back to City Interconnection Agreement Distributed Generation Tariff Is necessary to recoup fixed costs from customers who want DG For example: Residence who installed D.G. will be billed on: Standard Residential Rate, plus Distributed Generation Rate

Distributed Generation Rate METERING CHARGE Bi-directional meter: $2.50 per month Single Directional Single phase: $4.50 per month Poly phase: $11.00 per month STAND-BY CAPACITY CHARGE (kW based on nameplate) Tier 1 (up to 143 kW of total installed kW in City) : $0 per kW Tier 2 (144 kW to 300 kW of total installed kW in City) Residential: $5.00 per kW General Service: $7.50 per kW Tier 3 (301 kW and above) Residential: $10 per kW General Service: $13.00 per kW Demand rates: does not apply CREDIT FOR ENERGY Avoided Cost This rate will only be applied to customers who installed D.G.

Council should take the following actions Recommendations Council should take the following actions Adopt D.G. tariff Enact ordinance that require customers to notify City if they want to install Distributed Generation on their premise Work with building/zoning/code enforcement to ensure D.G. installation on customer premise is up-to-code for safety Could also add a fee to pay for inspection.