PRACTICAL ASPECTS OF CUSTOMER OWNED GENERATION A DISCUSSION OF INTERCONNECTION POLICIES, METERING STRATEGIES AND BILLING CONSIDERATIONS IMUA ANNUAL CONFERENCE MAY 8, 2015

ASPECTS OF CUSTOMER OWNED GENERATION Our Panel – Doc Mueller – IMUA – on the outline of a net metering policy Dan Cothern – HD Supply – on the physical aspects of metering customer owned generation Verbal Blakey – BHMG Engineers – on rate setting considerations of crediting the output of customer owned generation

DRAFT NET METERING POLICY Net Metering - Service to an electric consumer under which electric energy generated by that electric consumer from an eligible on-site generating facility and delivered to local distribution facilities may be used to offset electric energy provided by the electric utility to the consumer during the billing period (SeeEPAct2005 at §1251(a)).

DRAFT NET METERING POLICY - COMPONENTS Policy – Defines eligible sources of generation Sets an individual size limit on each unit Sets a system wide limit on installed capacity Defines who pays for required metering changes Defines how energy produced by customer generation will be credited

DRAFT NET METERING POLICY - COMPONENTS Defines eligible sources of generation For purposes of this policy an eligible on-site generating facility shall be defined as a renewable generating facility such as a photovoltaic facility and small wind turbines. Other forms of renewable generation shall be considered on a case by case basis. In all cases, facilities interconnected must be deemed to be renewable to qualify for this policy.

DRAFT NET METERING POLICY - COMPONENTS Sets an individual size limit on each unit Subject to the limitations set forth herein, (Utility name) shall make net metering service available upon request to any (Utility name) electric customer with a qualifying generating facility of 10 kW capacity or less. Any generating facility greater than 10 kW but less than 1 MW shall be considered on a case by case basis. The decision with respect to such facilities shall be made by the (official designated by the utility).

DRAFT NET METERING POLICY - COMPONENTS Sets a system wide limit on installed capacity Total net metered capacity interconnected under this policy for the (Utility name) system shall not exceed 2 % of the system’s peak as it existed in the prior calendar year. In the event that the system peak is reduced such that the existing net capacity exceeds the 2% level, those existing net metered customers shall be allowed to continue under this policy. However, no new interconnections will be allowed until such time as the system peak grows such that net metered capacity is again no greater than 2% of the system’s peak

DRAFT NET METERING POLICY - COMPONENTS Defines who pays for required metering changes Any costs (Utility name) incurs associated with the net metering program, including but not limited to changes in metering, other physical facilities or billing-related costs, shall be born by the participants in the net metering program provided however that such costs shall be capped at $1,000 to each qualifying customer interconnecting facilities of 10 kW or less. For those facilities greater than 10 kW that are deemed to qualify under this policy, all costs associated with the program shall be born by the participant.

DRAFT NET METERING POLICY - COMPONENTS Defines how energy produced by customer generation will be credited Energy generated by the customer-owned generator will offset the energy required by the customer’s load during the billing period (at the system’s avoided cost). For any energy generated by the customer in excess of the energy required by the customer’s loads for a given billing period a credit shall be carried forward to the customer’s next billing period. In no case shall credits for excess energy be carried forward for a period greater than three billing periods. In the event of termination of an account qualifying for net metering under this policy, any outstanding credits are surrendered. Under no circumstances will there be payments, or credit transfers for excess energy.

DRAFT NET METERING POLICY - COMPONENTS Defines how energy produced by customer generation will be credited (continued) In addition to the cost referenced in Section 8, (Utility name) will charge a Distribution System Utilization fee of ($amount) to ensure all customers pay a share of the costs of maintenance and improvements to the distribution system. This fee is exclusive to customers who receive net metering services under this policy and represents the non-bypassable costs associated with maintaining the distribution system that backs up net metered generation.

Utility SourceConsumer Source Utility meters needs to be able to read 4 possible measurements. 1.) Forward Only, Energy Delivered by Utility to Consumer 2.) Reverse Only, Excess Energy Received by Utility from Consumer’s Generation 3.) Net Energy, Fwd Energy – Received Energy (excess consumer generation) 4.) Secure Energy, Fwd Energy + Received Energy – mostly used to combat theft

Utility SourceConsumer Source The Utility Rate determines how we program the Utility Meter and what Energy Registers are read. Most common scenario is “Avoided Cost” payback. Avoided cost utilizes Fwd only and Rev only registers. Fwd is charged at retail and Rev is credited at wholesale (avoided cost). Net is less common. The Net Register is used, Fwd – Rev. In this case, the energy received by the utility is credited to the consumer at retail rate. Utility Meter Consume Meter (Optional)

Rate Tariff / Rate Ordinance:Meter Reads: Base:$0.1120/kwh1585 kwh consumed PCA base:$0.0700/kwh Sample Monthly PCA:$0.0076/kwh381 kwh generated Full charge for all energy consumed during billing period: 1585* ( ) = $ electric bill Credit for all energy generated during the billing period: 381 ( ) = $29.57 credit $ $29.57 = $ net electric bill AVOIDED COST BILLING EXAMPLE 1 NON-DEMAND CUSTOMERS – 500 WATTS OF SOLAR PANELS INSTALLED BHMG ENGINEERS

Rate Tariff / Rate Ordinance: Published demand rate:$11.51/kw-month Published energy rate:$0.0673/kwh Sample Monthly PCA:$0.0076/kwh Generation Credit Rate:$0.0420/kwh Meter Reads: 218,600 kwh 662 kw 28,800 kwh generated (40% LF) Full Charge for demand during billing period: 662*$11.51 = $7, demand charge Full Charge for energy consumed during billing period: 218,600 * ( ) = $16, energy charge Credit for all energy generated during billing period: 28,800 * ( ) = $1, energy credit AVOIDED COST BILLING EXAMPLE 2 DEMAND METERED CUSTOMER – 100 KW OF SOLAR PANELS INSTALLED BHMG ENGINEERS