Transcript Slide 1

Interconnection of Small Wind & Solar
Systems to Distribution Utilities:
A Cooperative Perspective
Patrick Parke
Midwest Energy
Hays, KS
September 26, 2007
Outline
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Governing statutes & regulations
Interconnection tariff content (generic)
Net metering
Governing Statutes
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KSA 66-1,238 – Directed KCC to establish
interconnection provisions for renewable sources
KSA 66-1,184 – Interconnection and buy-back
KSA 17-4652 – Renewable generation coops
FERC guidelines apply if the device is connected
to FERC-jurisdictional transmission lines or no
KCC-approved guidelines are in place.
KSA 66-1,184 interconnection
and buy-back provisions
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Residential – 25 kW or less
Commercial – 200 kW or less (previously 100)
Appropriately sized for customer’s load
Excess generation priced at 150% of system
average energy cost (Note: Customer gets
value of full retail rate for every kWh
displaced)
Dodge City CC/Cloud County CC – 1.5 MW
Buy-back = 100% of system average energy cost
KSA 66-1,184 interconnection and
buy-back provisions (Cont.)
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Annual bill credit/payment or when total = $25
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Utility owns, supplies & maintains meter(s)
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Very general safety/protection guidelines
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Total connected capacity may be limited by
capacity of line or 4% of utility peak load
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Subject to KCC-approved tariffs or current FERC
procedures and regulations
Generic Interconnection
Tariff Content
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Applicability
Process overview
Technical requirements
Cost responsibility
Metering
Boilerplate
Sample agreements
Applicability
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Who qualifies? Per KSA 66-1,184
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Residential customers up to 25 kW
Commercial customers up to 200 kW
Schools (CCCC & DCCC) up to 1.5 MW
Utilities not prohibited from connecting larger
systems
Process Overview – Series of steps
largely dependent on generator size
Coops Utilizing FERC
SGIA Model
10 kW Inverter Process
Midwest Energy
Simplified (10 kW inverter)
Fast Track Process (those Expedited (those that pass
that pass certain screens) certain screens)
Study Process
Standard
Typical Screens
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Use of qualified inverter (UL 1741)
Aggregate generation as % of annual peak
on that line segment
% contribution to maximum fault current
% of short circuit interrupting capacity
Contribution to imbalances
% voltage drop for motoring
Technical Requirements
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Interconnection
Operation
Disconnection – For protection of people and
property on both sides of the meter.
Customers may not understand these
provisions, but their vendors should!
Cost Responsibility:
Interconnecting Customer
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Review and study costs
Interconnection equipment costs
System modification costs
May be a requirement of creditworthiness
Minimal/no fees for smallest systems
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Midwest Energy, up to 10 kW = $0
SGIA model = $100
Utilities must provide cost estimates in advance
(KSA 66-1,184)
Metering
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KSA 66-1,184: Cost is utility’s responsibility
For larger systems: Utility specific
Meter type dependent on generator size and
contract provisions
Boilerplate
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Definitions
Insurance requirements
Indemnifications
Confidentiality provisions
Notices
Amendments
Assignment
Etc.
Typical Agreements
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Combined Application & Agreement (10 kW
category)
Review or Study Agreements
Interconnection Agreement
Net Metering
Net Metering Definition
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Customers use their own generation to
offset consumption; electric meters turn
backwards when electricity is
generated in excess of actual load
Net Metering Definition (Cont.)
Net metering allows for the flow of
electricity both to and from the customer
through a single, bi-directional meter
 Customers may receive retail prices for the
excess electricity they generate,
depending on the state
 Avoided cost; average power cost or
monthly market rate also used (per IREC)
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Net Billing
A second meter measures electricity that
flows back to the utility
 Utility purchases the power measured by
the second meter at rate reflecting
variable energy cost (w/o capacity cost)
 The amount that the utility pays the
customer is netted against the amount
that the customer owes the utility
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Reasons Cited for Allowing
Net Metering
Easy to administer – standard electric
meter registers net flow (w/o TOU info)
 Subsidy encourages investment in
renewable energy technologies
 Allows customers to "bank" their energy
and use it a different time than it is
produced, i.e., another subsidy, especially
with wind
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Components of Retail Service
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When a utility sells electric energy to the
customer, the utility is selling 3 services
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Generation
Transmission
Distribution
With rare exceptions, all three services are
“firm”, but wind is an intermittent resource
110 MW Gray County Wind Farm
2005 Operating History
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18% of year: output was 0 MW
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32% of year: output was <10% capacity
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66% of year: output was <50% capacity
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22 occasions, the output dropped by 55 MW or more in a
ten-minute period; 4 occasions by more than 99 MW.
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38 occasions, the output increased by 55 MW or more in a
ten-minute period; 1 occasion by more than 99 MW.
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Wind is an intermittent energy source, not firm capacity
Net Metering Subsidy
Customer generation is non-firm
 Customer does not own transmission or
distribution (T&D); significant portion of
the costs in retail rates
 Payment calculated using the firm retail
rate is too high for intermittent power
produced and absence of T&D functions
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Net Metering Subsidy (Cont.)
Subsidy is paid by remaining customers
 I.e., a subsidy from those who cannot
afford generators to those who can; not
everyone can afford a $30,000 - $40,000
wind machine and tower. (Bergey Excel)
 Environmental benefits flow to all citizens;
cost of net metering subsidy falls on
customers of mostly rural systems
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Kansas Coops Demonstrating
Support for Renewable Energy
Concern with net metering ≠ opposition to
renewable energy
 Sunflower: 100 MW of wind
 Midwest Energy: 25 MW contracted; 25 MW
under negotiation
 KEPCo gaining access via supply contracts
 150 MW = 20,000 Bergey Excel 7.5 kW
units
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Smart Shopping
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Typical wholesale wind cost <5 cents/kWh
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Average residential rate >10 cents/kWh
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Net metering means the utility pays firm
retail rates for a wholesale commodity
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Why should the coop pay 10 cents for
what it can buy at under 5 cents?
An Economist’s Perspective:
Two Policy Questions
Does net metering lead to greater
efficiency?
 Not if the result is paying double for wind
energy!
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Does net metering lead to greater equity?
 Not if those who can afford renewable
generators are subsidized by those who
cannot.
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The End