Net metering refers to the ability for small-scale power generators--like the guy down the street who put solar panels on his roof--to sell whatever excess energy they produce back to the utility. This is a well-established tool for making better use of renewable energy sources by bringing them into the grid.
Net metering is particularly important for that most iconic of small-scale energy generation: residential solar power. For most people with a day job, the time of peak power production for solar energy corresponds to the time they're away from home. If they want to make use of that energy, and they're not connected to the grid, they have to invest in battery backups, which are expensive and not terribly efficient. However, if they're connected to the grid, they can sell that power back to CWLP, and then buy power when their panels aren't working (night time and cloudy days). They're not the only ones who benefit, however. As I explained in my post on smart metering, the electricity produced at times of peak demand is more expensive and tends to be dirtier than the electricity produced at periods of low demand. Solar power tends produce best during those peaks in demand. This means that they're offsetting the worst fossil fuel generators. Moreover, from CWLP's perspective, this is great, because it frees them to sell more power at peak price, which brings in the greatest revenue.
One last general note: although we're mostly going to enthuse about net metering, not all net metering is necessarily small-scale renewables. I would imagine that a small-scale incinerator could, in theory, qualify. We don't want to see net metering support even dirtier power sources, so, even though this isn't really an issue right now, we want to get on the record in support of CWLP being able to discriminate among small power suppliers with vastly different environmental performance.
Now, the good news is that CWLP is recommending adoption of this standard. However, they have some modifications, which means that we have some quibbles.
First thing is that all net meterers have to go through the interconnection standard they recommend. (Which means that, even though we don't have many strong, substantive comments about that standard, we are concerned that it support the development of small-scale renewables, rather than restrict their development.)
Second, CWLP seems to be concerned about people moving from small-scale generation, and relying on the grid to efficiently even out their own consumption, toward what we might consider small-scale power producers who operate by selling power to CWLP beyond what they use. I'm not sure that such a scenario is a bad thing (hey, hey, free market and the whatnot), but we recognize that that's a different issue that ought to be handled differently from the small business or household who wants to use solar panels to get to net zero energy purchases.
However! CWLP's proposed solution is not a good one. They are proposing to limit net meterers to 25 kW capacity. At the hearing, staff said that limit was beyond what the typical house would be able to support on its roof. However, single-family houses aren't the only potential customers interested in net metering. Gas stations, for instance, have both higher energy demands (at least, I assume; they're really bright, at any rate) and more roof space (why gas stations, you ask? Because at least one gas station in town has already put up solar panels on the canopy over its pumps). Ditto for big box stores. Both Kohls and Wal-Mart have made recent commitments to renewable energy, particularly solar, and while I don't think either are talking about putting solar panels on their roofs in Springfield, we need to be ready for that. Therefore, we suggest that if CWLP wants to cap net metering to limit people getting income from the program, that they at the very least make the limit scale-able, based either on the individual customer's energy demand or on customer class (so that commercial users have a higher limit, recognizing their higher demand). Moreover, we suggest that the cap be developed at the time of program development, rather than written into the city council ordinance that adopts this standard.
Third, because net metering will require updating their billing software, CWLP is proposing that it not start any net metering program until it has at least ten participants.
CES feels that any such requirement is wrong-headed, because the most important customers CWLP will have in developing a net metering program are the early adopters. These are the people and businesses for whom such a program is the most risky. The comparative level of risk for CWLP to upgrade its software, versus the household that wants to install solar panels, but can't until it knows that it will be able to sell to the grid to offset its grid purchases, will almost clearly dictate that CWLP be the one to absorb the risk. I'll come back to this in a moment.
Fourth, CWLP is recommending that when a customer's monthly generation exceed his or her monthly energy use, that difference be applied forward to the customer's next bill, rather than paid out. CWLP will be happy to hear that, at least right now, I don't think we have any particular comment on this.
Finally, CWLP suggests that any costs associated with the net metering program be borne by that program's participants. In part, this is because of their concern with rate equity--that customers using a particular service pay for that service. There are two ways that this plays out.
First, people who net meter have the potential to use CWLP's transmission system twice: once for the electricity they purchase, and once for the electricity they sell. However, if these balance out, they won't be billed at all, because CWLP rate structure is out of whack with their cost structure. (I'll have more on this in a separate post.) Essentially, they bill for fixed costs (like the transmission system) through their variable prices (the per-kWh energy cost).
Second, because there are costs associated with CWLP preparing a net metering program, they recommend that those costs be borne by net metering participants.
To the first concern, we suggest that they restructure their rates, to better apportion fixed costs to fixed prices. To the second concern, however, we believe that CWLP should adopt a different understanding of its role here. Right now, CWLP seems to be saying that the few select net meterers are so different, that they constitute a different customer class, and thus ought to support their own. CES feels, on the other hand, that potential net meterers are a much larger pool than that, and that if CWLP absorbs these costs, it will not be subsidizing a select group, but will instead make net metering a service more available to every customer. Additionally, because net metering (particularly that done for solar power) will allow CWLP to sell more energy at the extremely lucrative peak prices, these customers ought not be penalized for making this possible.
Again, as with other standards, our general concern is that CWLP sees this program as something it will allow. Instead, we suggest that net metering can be vital to preparing Springfield for a sustainable energy future, and that it ought to be cultivated, rather than put up with.
Therefore, we agree that CWLP should adopt this standard. We request the following modifications:
- that CWLP drop or modify the 25 kW limit to encourage net metering for larger customers.
- that CWLP eliminate the requirement for 10 participants to start net metering/
- that CWLP more explicitly recognize that net metering may bolster revenues, and that it eliminate its requirement that the start-up costs of net metering be borne by those customers.