How Net Metering Impacts Electric Cooperatives

By Paul Wesslund

One of the most controversial and least understood energy issues today is net metering.

At its most basic, net metering is a state law requiring utilities, including electric cooperatives, to purchase the excess electricity produced by consumers who have rooftop solar panels. But that’s where the simplicity ends.

States and electric utilities have established net metering programs to encourage clean energy generation. Nearly every state has some kind of net metering rule and they’re changing all the time. In the first nine months of 2018, states took more than 400 actions to change how they compensate small energy producers, according to the North Carolina Clean Energy Technology Center, which collects net metering information from around the country. Some of those actions strengthened net metering laws, others weakened them.

In Colorado, electric cooperatives’ net metering requirements are governed by state statutes and the Public Utilities Commission (PUC) interconnection standards. The statute requires all electric cooperatives to allow interconnection of a net metered generator of a renewable resource up to 10 kilowatts for residential accounts and 25 kW for nonresidential accounts, provided the installation complies with the interconnection standards adopted by the PUC.

Colorado co-ops may choose to have policies to allow installation of larger projects, but must interconnect at the 10 and 25kW minimum levels if the interconnection standards are met. If a cooperative denies an interconnection, the cooperative must provide the applicant with a written explanation for the denial.

Here are some additional explanations about net metering:

What is net metering?
Net metering is a way of measuring and valuing the electricity output of privately-owned solar panels. Net metering requires utilities, including electric cooperatives, to buy excess electricity back from consumers who have some way of generating electricity themselves. Net metering typically means that the consumer’s meter rolls forward when the consumer uses power and rolls backward when the consumer sends excess electricity back to the electric grid.

That excess electricity could be produced by solar panels, a windmill or a micro hydropower project. By far, the main source of this extra electricity comes from homeowners who installed solar panels on their property. Whenever their solar system generates more electricity than their home is using, under net metering, the electric utility must compensate the homeowner for the excess electricity.

The PUC interconnection standards are intended to protect the safety of the consumers, employees and owners of the net metered account by requiring approved equipment and availability on the circuit to be interconnected. Cooperatives may deny an interconnection if the equipment isn’t up to standards or if there is not sufficient available capacity on the circuit to accommodate additional net metered accounts.

How do electric utilities compensate consumers for the excess electricity?
Some net metering programs require the utility to buy back or credit the consumer’s bill for that electricity at the same retail rate the utility charges for selling electricity. Other programs allow the utility to credit the consumer at the wholesale cost, which is what the utility pays for power. Some utilities require that these consumers (with privately-owned generation) be metered separately. Under these net billing programs, the consumer receives a bill with the credit for the excess electricity subtracted from the total amount due.

All Colorado electric cooperatives are required to adopt policies to compensate net metered consumers for excess generation and to determine the annual “true up” date. However, there is no statutory formula for compensation. Therefore, each cooperative has discretion regarding the amount and timing of compensation for excess generation.

Is net metering new?
Net metering programs have been around nationally since 1983. Since then, 38 states and the District of Columbia put their policies and requirements into law. Additionally, states started passing other laws, such as renewable portfolio standards, that require electric utilities to have certain amounts of their power generated by renewable energy resources, to encourage solar, wind and other forms of alternative energy.

What makes net metering challenging?
The basic challenge with net metering is that sometimes the policies require electric utilities to pay high costs for what is often “low-value power.”

The reason it’s low-value power is you can’t count on it. There’s no solar energy at night and no electricity from wind during calm weather. Renewable energy advocates argue that net metering rates are a great way to support green power, but utilities say it’s not fair for them to have to buy electricity from a rooftop solar owner at a rate that covers round-the-clock service when that’s not what the homeowner is providing.

The results of that imbalance are where the net metering issue gets complicated. One result is that the economics of net metering create a subsidy for rooftop solar owners paid for by those who don’t have solar panels.

The cost difference between buying wholesale electricity at retail rates didn’t matter so much at first, but solar energy is booming, potentially reshaping the effect net metering could have on the energy industry. The number of rooftop solar installations grew 63 percent from 2012 to 2015, according to the National Rural Electric Cooperative Association. As a result of that kind of growth in potential net metering use, many states started rethinking their net metering rules.

Another result affects the ability of the utility to plan for its basic job of supplying reliable and affordable electricity. The engineers and accountants who run an electric utility that provides power 24/7 need to place a higher value on dependable electricity, like from a natural gas or coal power plant, than from several homeowners who may or may not be generating electricity when it’s needed.

Net metering payments also don’t cover the costs of setting up a billing system, paying taxes or any of the utility’s other fixed costs.

What alternatives are there to net metering?
Net metering programs that set the price at wholesale cost are more likely to ensure appropriate levels of compensation for both utilities and consumers who are generating electricity. Also, net billing programs provide a more equitable compensation to the net metered consumer without leaning on other consumers who don’t have solar panels or other ways to generate power at home. Additionally, NRECA suggests other policies for supporting renewable energy without implementing net metering. Those could include tax credits for installing renewable energy systems and dedicated research funds aimed at lowering costs for alternative energy.

How are electric co-ops supporting renewable energy programs that benefit all consumer-members?
Electric cooperatives are leaders in community solar programs that offer their members the opportunity to participate in renewable energy programs that are more affordable and reliable than privately-owned solar panels. Community solar arrays can be sized and priced to fit consumer demand, reducing risks of cross subsidization. With the help of NRECA, co-ops are also working to minimize costs of large solar projects.

As the energy industry continues to undergo major changes, whether to technology, renewable energy use or other emerging trends, electric cooperatives continue working with all co-op members to ensure the delivery of the safe, affordable, reliable and environmentally-sustainable energy our communities depend on.

The Colorado Rural Electric Association expects legislation in the 2019 session to encourage the development of renewable resources, potentially including net metering. There have been discussions regarding increasing or eliminating the 10 and 25 kW minimum interconnection levels. CREA and Colorado’s electric cooperatives supported the legislation to create the current laws regarding net metering and believe they are still appropriate. The law established reasonable thresholds for net metering and allow individual cooperatives flexibility to be as expansive and creative as their consumer-members want to encourage the development of net metering.

Paul Wesslund writes on consumer and cooperative affairs for the National Rural Electric Cooperative Association.

Sangre de Cristo Electric Receives EV Charging Station Grant

Sangre de Cristo Electric Association, Inc., received a grant from Charge Ahead Colorado to install electric vehicle Level 2 and Level 3 charging stations in Buena Vista. Proposed to be located on South Main, the charging stations will have two slots for Level 2 chargers and one for a Level 3 charger.

The general purpose of this project is to deploy electric vehicle charging stations throughout the state of Colorado and in the Buena Vista area with the hopes that it will reduce “range anxiety.” The inability to find public charging stations currently discourages consumers from buying EVs. According to the Colorado Energy Office, installation of the charging stations will alleviate that concern and increase the use of EVs across the state. The Buena Vista station is also expected to bring an economic boost to the area by encouraging EV drivers to pull off US Highways 285 and 24 to charge their vehicles.

SDCEA’s partnership with the Colorado Energy Office and Charge Ahead Colorado promote and support smart investments in innovative technologies. The EV charging units are expected to be online in February of 2019.

San Isabel Electric Dedicates New EV Charging Station

News of the numerous benefits of electric vehicles is spreading across the state, and the southern Colorado community of Pueblo West is a recent recipient of EV charging stations.

A $16,000 grant from the Colorado Energy Office’s Charge Ahead program and funding from other local entities, including San Isabel Electric Association, makes Pueblo West Library the new home of two charging stations.

One Level 2 charger and one Level 3 charger will be at the library, with the electricity being sold at the same rate residential San Isabel Electric members pay.

Currently, San Isabel Electric members are eligible to receive $3,000 off the 2018 Nissan Leaf until January 2, 2019. And the electric co-op is offering a $500 rebate for home-based EV chargers beginning in 2019.

Highline Electric to Build Riverview Solar Project

Highline Electric Association Board of Directors approved a 1.5-megawatt solar project in late 2018 and construction is slated to begin in 2019. The 5,700 single-track solar panels will follow the sun and generate 1.5 megawatts of electricity — enough to power 400-500 homes.

Highline is partnering with Denver-based Pivot Energy (formerly Microgrid Energy) to bring this project online. Named “Riverview Solar Project,” it is project is projected to generate 3.8 million kilowatt-hours per year to the communities of Sterling, Atwood, West Plains, Iliff and Crook. Power from the array will feed directly into the Platte Substation and into Highline’s distribution.

Stay informed about the positive effects of this solar project with future issues of Energy Innovations brought to you by CREA.

Reasons You May or May Not Want an EV for Christmas

By Paul Wesslund

Wondering if an electric vehicle is a good gift idea for you or your significant other this Christmas? The answer could depend on where you live.

Electric vehicles account for just 1.2 percent of the U.S. vehicle market, but sales are booming, growing 25 percent last year. And they’re getting better and cheaper as researchers improve the batteries that power them. Here’s a guide to help you decide if an electric car is for you — or if you just want to be smarter about one of the next big things in energy.

The first thing to realize about electric cars is they can drive more than enough miles for you on a single charge, even if you live out in the wide-open countryside.

LOCATION ISSUE 1: THE DISTANCE MYTH
Try keeping track of your actual daily use, advises Brian Sloboda, a program and product manager at the National Rural Electric Cooperative Association.

“If you’re an insurance salesman, you’re logging a lot of miles, so an electric car’s not going to be for you,” he says, noting that a typical range for an electric car today is more than 100 miles, and ranges of 150 to 250 miles are becoming common. “But if you look at how many miles you drive in a day, for most people in the United States, even in rural areas, that number is under 40 miles per day. So if your car has a range of 120 miles, that’s a lot of wiggle room.”

According to the Federal Highway Administration, the average American drives 25 miles per day, and for rural areas that average is 34 miles a day.

Sloboda says another reason it’s worth thinking realistically about your daily mileage comes from the most likely way an electric car would be refueled. When an electric car is done driving for the day, you can plug it in to recharge overnight. Essentially, you’re topping off the gas tank while you sleep, giving you a fully-charged battery every morning.

There are three ways to charge an electric car:
Level 1 — The simplest charging technique is to plug the car into a standard home outlet. That will charge the battery at a rate that will add two to five miles to its range each hour. That’s pretty slow, but Sloboda notes the battery might start the charging session already partly charged, depending on how far it is driven that day.

Level 2 — Faster charging will require a professional installer to upgrade the home’s voltage for a unit that will add between 10 and 25 miles of range for each hour of charging — a rate that would fully charge the battery overnight. Sloboda says installing a Level 2 charger in a house or garage would run $500 to $800 for the equipment, plus at least that much for the labor. Timers can also be used to charge the vehicle in the middle of the night when electric consumption is typically lower.

Level 3 — DC (direct current) fast charge requires specialized equipment more suited to public charging stations and will bring a car battery up to 80 percent of capacity in 30 minutes. Sloboda warns this high-speed technique should only be used for special long-distance driving, since it can degrade the battery over time. That’s also why DC chargers shouldn’t be used to bring the battery up to 100 percent.

LOCATION ISSUE 2: OFF-PEAK ELECTRIC RATES
What you pay to charge your electric car could also depend on where you live, Sloboda says. He advises checking to see whether your local electric co-op offers a lower rate to charge an electric vehicle overnight, when the utility has a lower demand for electricity.

“It’s different depending on where you are in the country,” Sloboda says. Some local co-ops have fairly stable electric demand throughout a typical day, so they may not offer a special electric vehicle rate. He says there are areas of the country where the on-peak, off-peak difference in price is extreme, so it might make financial sense for the utility to offer an overnight charging rate.

Another factor affecting the economics of an electric car is, of course, the cost of the vehicle.

“These cars are really in the luxury and performance car categories,” Sloboda says. As electric cars improve, projections put their cost coming down to match conventional vehicles by about the year 2025. But today, the average electric car costs close to $40,000, compared with less than $30,000 for several internal combustion engine vehicles.

LOCATION ISSUES 3 AND 4: ENVIRONMENT AND GEOGRAPHY
For many people, one of the biggest selling points for electric cars is their effect on the environment, and that can also depend on where you live.

The sources of electricity for a local utility vary across the country — some areas depend heavily on coal-fired power plants, others use larger shares of solar or wind energy. One major environmental group analyzed all those local electric utility fuel mixes and determined that, for most of the country, electric vehicles have much less of an effect on the environment than conventional vehicles. That study by the Union of Concerned Scientists shows that in the middle part of the country, driving an electric vehicle has the equivalent environmental benefits of driving a gasoline-powered car that gets 41 to 50 miles per gallon. For much of the rest of the country, it’s like driving a car that gets well over 50 miles per gallon.

“Seventy-five percent of people now live in places where driving on electricity is cleaner than a 50 mpg gasoline car,” the report from the Union of Concerned Scientists states.

Other local factors that will affect an electric car’s performance include climate and geography, Sloboda says. The range of the vehicle will be affected by whether you regularly drive up and down mountains or make a lot of use of the heater or air conditioner.

Sloboda concedes that electric vehicles are not for everybody. One limit to their growth is that no major carmaker currently offers an especially popular choice: a pickup truck. Although, the development of electric pickups is under way at Atlis Motor Vehicles and Workhorse group, and discussions show Tesla is considering developing an electric pickup as well.

Sloboda suggests possible advantages of an electric pickup: a heavy battery in the bottom would lower the center of gravity for better handling, and at a remote work site the battery could run power tools.

Paul Wesslund writes on consumer and cooperative affairs for the National Rural Electric Cooperative Association.

United Power Battery Project Goes Live

United Power’s 4-megawatt storage capacity Tesla battery was installed in October and went live this earlier this month. Situated in Longmont, this is the largest lithium-ion battery in the state. After much research and evaluation, United Power is confident this innovative battery storage system will help reliably capture and store energy from both renewable and non-renewable sources on its grid.

United Power estimates that it will simultaneously power 600-700 homes over the four-hour period that the battery holds a charge. It is predicted that the battery will save about $80,000 a month, made possible by using the energy generated on United Power’s grid overnight when demand is low, storing it and distributing the electricity to consumers during peak demand daytime electricity use. The battery will alleviate some pressure on the grid during peak times, as well as decrease consumers’ bills.

United Power is Colorado’s fastest growing electric cooperative, serving more than 83,000 meters and maintaining nearly 6,000 miles of line. Stay informed on the positive effects of United Power’s innovative large-scale battery project with this Energy Innovations newsletter from CREA.

Intermountain REA Installs AMI

Intermountain Rural Electric Association, an electric co-op based in Sedalia, plans to roll out the first phase of its AMI initiative next month. Advanced meters will be installed at 1,000 residential, commercial and industrial locations.

Advanced metering infrastructure allows improved, two-way communications between the co-op and its meters. It will enable IREA to perform remote reading and connect/disconnect services, and will facilitate real-time troubleshooting to determine more accurate outage information. This means that the co-op will not have to dispatch field personnel to do these basic functions, thus making operations more efficient. AMI will also be used to automate parts of the distribution system and will allow IREA to better monitor voltage levels, thus strengthening reliability.

AMI allows IREA customers to access energy usage and cost through an online customer portal. It also allows customers to choose when the meter will be read each month for billing purposes. Overall, the co-op anticipates AMI will empower members to access more data on their electricity usage and make personalized adjustments going forward.

IREA’s service territory covers 5,000 square miles and the co-op will replace all current meters with AMI over the next several years at no charge to its consumer-members and with no rate increase.

Holy Cross Energy Offers FREE EV Chargers to Members

Promoting the purchase and use of electric vehicles within its service territory, Holy Cross Energy is offering a free Level 2 charger exclusively to its residential and commercial consumer-members who already own or are planning to purchase an EV.

A Level 2 charger delivers household electricity from a 240-volt outlet, like what is used to power an electric dryer or oven. The Level 2 charger provides a fast charge and gives users the option of setting a timer to charge during off-peak times.

Holy Cross Energy is an electric co-op based in Glenwood Springs, serving 55,000 members in the western Colorado counties of Eagle, Pitkin, Garfield, Mesa and Gunnison.

Energy Innovations Summit Recap

More than 300 people gathered October 29 in downtown Denver to participate in CREA’s 9th Annual Energy Innovations Summit. Sponsored in part by Tri-State Generation and Transmission and Xcel Energy, the summit draws interest from across the country.

Utility leaders discussed how the industry is in transition, and best practices for navigating those changes. Breakout sessions included topics such as blockchains, energy efficiency and demand response, renewable energy, EV fast charging technology and co-op battery storage projects.

Steve Collier, director of smart grid strategies at Milsoft Utility Solutions, spoke during the lunch session about threats and opportunities in the changing electric industry.

PowerPoint slides and presentations can be found here. To hear the audio recordings of the sessions, visit this link.

Co-op Solar Projects Start and Succeed with SUNDA Project

By Derrill Holly and Amy Higgins

Electric cooperatives are committed to providing safe, reliable, affordable energy to their consumer-members, and in many parts of the country that includes increasing the availability of solar power.

“Co-ops are big supporters of an ‘all sources’ national energy policy,” said Debra Roepke of the National Rural Electric Cooperative Association’s business and technology strategies group. “Our challenge is finding ways to get sustainable value out of investments that not only help meet the needs of co-op members today, but also control their costs in the future.”

Roepke spent more than four years as NRECA’s liaison and co-project manager of the Solar Utility Network Deployment Acceleration (SUNDA) project, an initiative launched by NRECA with partial funding from a Department of Energy Sunshot Initiative grant. In that role, she worked with generation and transmission cooperatives, electric cooperatives and other organizations involved in planning, developing and assessing the value of various approaches to solar projects.

Colorado Solar Projects
Between 2013 and 2018, total solar capacity owned or contracted by electric co-ops grew from 94 megawatts to 868 MW. Electric coops host more than two-thirds of all utility-sponsored community solar projects.

Tri-State Generation and Transmission, based in Westminster, has three projects totaling 85 MW of utility-scale solar in place. According to NRECA, Tri-State is the top solar G&T in the nation.

Poudre Valley Rural Electric Association, based in Fort Collins, utilizes community solar energy from six sites throughout northern Colorado and owns 2.7 MW.

“We have had a demand for a community solar option since we decided to build our first solar farm in 2012; the farm sold out before it was even built,” said David White, PVREA vice president of member relations. “Members continually requested a solar offering so we constructed a second solar farm that is five times bigger than our first solar farm, which sold out just a few months after construction was complete.

“An important part of our mission is to provide exceptional service to our members and, if meeting their energy needs includes a solar component, we need to be prepared to deliver,” White explained. “SUNDA provided resources at our fingertips that would have taken considerably more time to research on our own.”

SUNDA Provides Research
Solar projects, regardless of size or structure, help to build a knowledge base accessible to all electric co-ops.

PVREA’s first community solar project was Highlands Community Solar, followed by the Willox Community Solar Farm. Both thrived but were Power Purchase Agreement projects, which means the farms are owned and operated by a separate entity that PVREA purchases the energy from.

“With the success of two solar farms under our belt, we decided to build our third solar farm: the Coyote Ridge Community Solar Farm,” White said. With this project, PVREA wanted to take a different approach where the cooperative would own and operate the solar array, eliminating the need for a third party to maintain the farm. However, the co-op did not yet have the experience to do it on its own.

“SUNDA was a great resource for PVREA, providing information on engineering, procurement and construction. We found their financial analysis tool to be instrumental in evaluating options,” White explained.

Materials provided by SUNDA help electric cooperatives with everything they need to know about the process of attaining solar power, from conceptualization to planning and execution, as well as communication with the co-ops’ memberships. White explained that SUNDA’s resources helped cut the amount of time it would have taken otherwise to build Coyote Ridge, which sits at 74 percent subscribed today.

“SUNDA has supported cooperatives across the country,” said Lee Boughey, senior manager of communications at Tri-State. “The sharing of knowledge helps co-ops understand the opportunities with solar and reduce risks, which leads to successful projects”

Declining Costs
Several SUNDA participants contend that declining prices helped move solar from a demonstration or educational technology to a competitive asset within wholesale generation portfolios in many areas of the United States.

Solar products and components are improving, and the manufacturing and vendor base continues to expand. That led to substantial declines in the cost for deployed solar. According to NRECA, the per-watt costs declined from $4.50 for the first research project in 2013 to less than $1.40 per watt in 2018.

“The ultimate economics of solar lends itself to serious consideration as a daytime resource,” said Todd Bartling, vice president of renewables development for the National Renewables Cooperative Organization.

With an average of 300 days of sunshine annually, Colorado electric cooperatives are primed to benefit from this renewable energy resource, given their membership’s support.

“With clear skies and bright sunshine across the West, decreasing costs and federal tax incentives, solar power is an attractive resource for both Tri-State and our members.” Boughey said. “We are able to blend solar power and other renewables with our owned and contracted resources to keep power reliable and costs down for our members.”

“The industry is working to reduce the costs of the underlying equipment, installation and financing,” Bartling said. “Those improvements will help ensure the technology’s commercial viability when or if tax incentives designed to hold down costs are phased out.”

Shared Insights
Thanks to the SUNDA project, all of this information is available to electric co-ops. Shared experiences and open discussion are among the greatest strengths of the electric co-op movement.

Derrill Holly writes on consumer and cooperative affairs for the National Rural Electric Cooperative Association. Amy Higgins is a freelance writer for Colorado Country Life magazine.