i nterconnection & n et m etering in m assachusetts massachusetts department of public utilities...
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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
OutlineOutlineBackgroundBackgroundBasicsBasicsD.P.U. 11-75D.P.U. 11-75
INTERCONNECTIONINTERCONNECTION
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; oro Power Quality
INTERCONNECTION: INTERCONNECTION: BIG PICTUREBIG PICTURE
SLIDE 5 MA DEPARTMENT OF PUBLIC UTILITIES
OutlineOutlineBackgroundBackgroundBasicsBasicsD.P.U. 11-75D.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
INTERCONNECTION: INTERCONNECTION: BIG PICTURE CONT.BIG PICTURE CONT.
SLIDE 6 MA DEPARTMENT OF PUBLIC UTILITIES
OutlineOutlineBackgroundBackgroundBasicsBasicsD.P.U. 11-75D.P.U. 11-75
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
OutlineOutlineBackgroundBackgroundBasicsBasicsD.P.U. 11-75D.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 SIMPLIFIED PROCESSPROCESS
MA DEPARTMENT OF PUBLIC UTILITIESSLIDE 8
OutlineOutlineBackgroundBackgroundBasicsBasicsD.P.U. 11-75D.P.U. 11-75
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
MA DEPARTMENT OF PUBLIC UTILITIESSLIDE 9
OutlineOutlineBackgroundBackgroundBasicsBasicsD.P.U. 11-75D.P.U. 11-75
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
MA DEPARTMENT OF PUBLIC UTILITIESSLIDE 10
OutlineOutlineBackgroundBackgroundBasicsBasicsD.P.U. 11-75D.P.U. 11-75
o Studies can be:o Time consuming; ando Costly
o Cost is borne by applicant
INTERCONNECTION INTERCONNECTION STUDIESSTUDIES
MA DEPARTMENT OF PUBLIC UTILITIESSLIDE 11
OutlineOutlineBackgroundBackgroundBasicsBasicsD.P.U. 11-75D.P.U. 11-75
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
MA DEPARTMENT OF PUBLIC UTILITIESSLIDE 12
OutlineOutlineBackgroundBackgroundBasicsBasicsD.P.U. 11-75D.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 INTERCONNECTION MILESTONESMILESTONES
MA DEPARTMENT OF PUBLIC UTILITIESSLIDE 13
OutlineOutlineBackgroundBackgroundBasicsBasicsD.P.U. 11-75D.P.U. 11-75
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
MA DEPARTMENT OF PUBLIC UTILITIESSLIDE 14
OutlineOutlineBackgroundBackgroundBasicsBasicsD.P.U. 11-75D.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-ISSUES IN D.P.U. 11-7575
MA DEPARTMENT OF PUBLIC UTILITIESSLIDE 15
OutlineOutlineBackgroundBackgroundBasicsBasicsD.P.U. 11-75D.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
www.mass.gov/dpu Questions?
NET METERING NET METERING
MA DEPARTMENT OF PUBLIC UTILITIES
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
MA DEPARTMENT OF PUBLIC UTILITIES
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
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey 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: NET METERING: BASIC CONCEPT BASIC CONCEPT
(CONT.)(CONT.)
SLIDE 20
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey Qs
MA DEPARTMENT OF PUBLIC UTILITIES
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
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey Qs
= Excess Generation
MA DEPARTMENT OF PUBLIC UTILITIES
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
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey Qs
HOW “BIG” CAN WE HOW “BIG” CAN WE GO?GO?
MA DEPARTMENT OF PUBLIC UTILITIES
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
HOW “BIG” CAN WE HOW “BIG” CAN WE GO?GO?
(CONT.)(CONT.)
4/19/12SLIDE 23
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey QsTipsTips
MA DEPARTMENT OF PUBLIC UTILITIES
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
HOW “BIG” CAN WE HOW “BIG” CAN WE GO?GO?
(CONT.)(CONT.)
4/19/12SLIDE 24
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey QsTipsTips
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:KEY QUESTION:WHO CAN BE A HOST WHO CAN BE A HOST
CUSTOMER?CUSTOMER?
SLIDE 25
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey Qs
MA DEPARTMENT OF PUBLIC UTILITIES
SLIDE 26
SchoolSchoolDistribution Distribution CompanyCompany
Muni Acct
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey Qs
HOST CUSTOMER HOST CUSTOMER EXAMPLEEXAMPLE
Name on Account =Host Customer
MA DEPARTMENT OF PUBLIC UTILITIES
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
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey Qs
MA DEPARTMENT OF PUBLIC UTILITIES
SLIDE 28
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey Qs
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)
MA DEPARTMENT OF PUBLIC UTILITIES
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 ($)
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey Qs
MA DEPARTMENT OF PUBLIC UTILITIES
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
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey Qs
MA DEPARTMENT OF PUBLIC UTILITIES
SLIDE 31
WHAT CAN WE DO WITHWHAT CAN WE DO WITHNET METERING CREDITS? NET METERING CREDITS?
(CONT.)(CONT.)
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey Qs
Allocating monetary credits to electric bills
MA DEPARTMENT OF PUBLIC UTILITIES
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.)
MA DEPARTMENT OF PUBLIC UTILITIES
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
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey 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 IS THERE A NET METERING “QUEUE?” METERING “QUEUE?”
SLIDE 34
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey Qs
MA DEPARTMENT OF PUBLIC UTILITIES
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
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey Qs
MA DEPARTMENT OF PUBLIC UTILITIES
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
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey 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
ELIGIBILITYELIGIBILITY
SLIDE 38 MA DEPARTMENT OF PUBLIC UTILITIES
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
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey QsAdditional Additional InformationInformation
MA DEPARTMENT OF PUBLIC UTILITIES
ILLUSTRATIVE ILLUSTRATIVE EXAMPLE:EXAMPLE:MODEL AMODEL A
SLIDE 40 MA DEPARTMENT OF PUBLIC UTILITIES
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey QsAdditional Additional InformationInformation
ILLUSTRATIVE ILLUSTRATIVE EXAMPLE:EXAMPLE:MODEL BMODEL B
SLIDE 41 MA DEPARTMENT OF PUBLIC UTILITIES
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey QsAdditional Additional InformationInformation
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
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey QsAdditional Additional InformationInformation
MODEL SCHEDULE ZMODEL SCHEDULE Z
OutlineOutlineBackgroundBackgroundBasicsBasicsKey IssuesKey IssuesFutureFutureAdditional Additional InformationInformation
SLIDE 43 MA DEPARTMENT OF PUBLIC UTILITIES
MODEL SCHEDULE Z MODEL SCHEDULE Z (CONT.)(CONT.)
SLIDE 44 MA DEPARTMENT OF PUBLIC UTILITIES
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey QsAdditional Additional InformationInformation
MODEL SCHEDULE Z MODEL SCHEDULE Z (CONT.)(CONT.)
SLIDE 45 MA DEPARTMENT OF PUBLIC UTILITIES
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey QsAdditional Additional InformationInformation
MODEL SCHEDULE Z MODEL SCHEDULE Z (CONT.)(CONT.)
SLIDE 46 MA DEPARTMENT OF PUBLIC UTILITIES
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey QsAdditional Additional InformationInformation
MODEL SCHEDULE Z MODEL SCHEDULE Z (CONT.)(CONT.)
SLIDE 47 MA DEPARTMENT OF PUBLIC UTILITIES
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey QsAdditional Additional InformationInformation
MODEL SCHEDULE Z MODEL SCHEDULE Z (CONT.)(CONT.)
SLIDE 48 MA DEPARTMENT OF PUBLIC UTILITIES
OutlineOutlineHistoryHistoryBasicsBasicsKey QsKey QsAdditional Additional InformationInformation