GEMC Solar DG Workshop:Policy Considerations for

EMCs

Barry BirkettVice PresidentEnerVision, Inc.

April 21, 2015

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Topics

Fulfilling EMC Obligations Under the Cogen Act

Interconnection Agreements Metering of Member Solar Installations Compensation for Energy Generated by Solar

Installations What is Avoided Cost? What is Georgia Power is Doing? Proposals to Change Utility Obligations Other Considerations

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EMCs’ Obligations Under Cogen Act

1. Bidirectional or single direction metering

2. Written agreements with members

3. Costs of distributed generation recovered from generating customers

4. Rates charged for metering and interconnection approved by EMC board (or appropriate governing entity)

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Interconnection Agreements

Written agreements with member requirements

Generation meets national safety requirements at the generator’s expense

EMC may adopt additional requirements

Selling energy back to EMC can’t subject generator to increased requirements

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Metering Customer Solar Facilities

Bidirectional metering for solar on member’s side of the meter

Dual metering for solar on the EMC side of the meter

Cogen Act does not say who decides where solar facilities are connected

GPC leaves decision to the installer of the facilities

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Compensation for Solar Energy

With bidirectional metering:

–Generation offsets consumption–Excess consumption billed to

member–Excess generation credited

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Compensation for Solar Energy

With dual metering:– All member consumption billed– Generation credited

EMC purchases of solar generation– Not required to pay more than avoided

energy cost– No obligation to purchase if total

renewable capacity exceeds 0.2% of EMC’s prior year peak

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What is Avoided Energy Cost?

Cost of the kWh not needed by the EMC due to the member’s solar generation

Depends on EMC’s purchased power contracts

Could theoretically be $0, or even negative

Does not include capacity cost

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Avoided Energy Cost Examples

If fixed energy price = 3¢ → avoided energy cost = 3¢

If generation avoided → avoided energy cost = variable cost of avoided generation

If EMC subject to energy settlement → avoided energy cost = settlement price

If no energy purchase is avoided → energy cost may be $0

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GPC Avoided Energy Cost

Calculation established by PSC in 1994

Calculation modified in 2010 to reflect solar generation profile

Capacity credit paid when GPC avoids capacity

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Proposals to Change Obligations

Proposals applicable to GPC but may shape EMC future

Value of Solar

Request to modify GPC avoided cost calculation

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Value of Solar

Favored by solar advocates

Proposed for use in Georgia

Includes adders beyond avoided energy cost

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Proposed Change Regarding GPC Solar Purchases at Avoided Cost

Request filed this month by Georgia Interfaith Power & Light

Proposal to better align avoided energy cost with price paid under long term solar purchases

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Other Considerations - Policy

Current requirements may be changed

Should billing treatment of all member solar options be treated the same?

Should treatment of EMC solar be consistent with third party solar?

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Other Considerations - Rates

Protection from subsidization by customers without solar a consideration in Cogen Act

Avoiding subsidies involves:– Recovering generation costs from

generators– Proper avoided cost rates– Retail rates with appropriate price signals

Energy charges based on avoidable cost

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How will you respond to the challenges of solar?

THANK YOU!

Barry BirkettVice President

4170 Ashford Dunwoody RoadSuite 550

Atlanta, GA 30319678-510-2912 (office)

barry.birkett@enervision-inc.com