Solar (or wind) generators are top of mind on the member’s side of the utility meter, specifically with questions about net metering for generation owned by members.
What is Net Metering?
Net metering is a billing mechanism where a meter turns forward or backward depending on whether a member-owned generator is producing more or less than is being consumed by that member and thereby “nets” the consumption by the member. Members are only billed for their “net” energy use.
How does Net Metering Effect the Co-op?
Net metering treats the electric distribution system like a battery — pulling energy off when it is needed and putting energy back on when there is excess generation. However, like a battery, the cost of the distribution system isn’t free. Since much of the distribution system’s costs are recovered through the kilowatt-hour energy charge, members that net meter have less net-consumption and therefore are not paying for the distribution system near to the degree that other members are paying. In some instances, they are not paying for the system at all.
Many legislatures and state regulatory commissions as well as Doniphan’s tariffs recognize that on a large scale, net metering is not sustainable. As more members install their own generation behind the meter, the costs of the distribution system fall on fewer members that do not have their own generators. This causes rates to go up and higher bills for those that remain.
Net Metering Cap
To encourage the spread of operating costs among electric users, policymakers have capped the amount of net-metered generators allowed on the system as a percentage of total system peak. Kansas utilities limit the amount of net metering capacity to between 1%-5% of the system peak. In that way, the amount of cross-subsidy caused by net metering is minimized with only marginal impact on all other members.
At this time, Doniphan members have exceeded the capacity threshold established in the tariff for net metered installations. Therefore, no new net metered generators will be allowed on the co-op system until system growth allows for more. We will still allow members to interconnect new solar installations behind the meter under our parallel generation tariff. Doniphan will buy excess generation at around $0.03 or $0.04 per kilowatt-hour, depending on the price of wholesale power.
While the policy may not be perfect, hopefully it strikes a balance between providing some incentive for transformational technologies like behind the meter solar – while not benefiting one individual member at the cost of all others.
Eager to learn more about installing renewable energy or starting the process? Give Doniphan Electric a call at 785-985-3523 so we can help you through the interconnection process.