RES Changes Group Net Metering Rules, Speeds More Utilities Toward 100% Renewable
Summer storms saturate and erode ground, causing more outages
It’s true that trees don’t impact underground lines, but erosion and flooding do. In places where we’ve had underground lines for years, erosion and flooding are washing them away. – Louis Porter
Group net metering of the type where generation hooks directly to the grid, and the supposed off-taker of that power may be anywhere else in WEC territory—which resembles merchant generation, but at lucrative net metering rates—is no longer going to be permitted. But group net metering sited at the location of several contiguous local households banded together is still permitted and will continue. – Stephen Knowlton
Summer storm outages
Louis: Washington Electric is on track to face another year of high outages and high outage costs due to both winter storms and summer flooding and storms. We don’t know exactly how high those costs will be or how much we’ll get reimbursed from FEMA for the summer flooding. Like other utilities, we’re seeing storms cause extensive damage to our system.
Also, members may notice that since the summer flooding, we’ve had a number of outages. Saturated ground is causing trees to become uprooted and land on our lines, and landslides impact our lines.
This is how it usually works when we have a major storm: our crews make temporary repairs to get the power back on as quickly as possible, and then have to go back and make final corrections and fixes. That’s a great deal of what’s going on this summer. In some cases, we have to move entire sections of line due to flooding and erosion. These tasks take up a great deal of time for our crews.
Steve: Falling trees are a major cause of our outages. A number of members have suggested we underground more of our lines. But with these kinds of outages, it’s not clear that undergrounding lines is going to be effective and may be more difficult to repair in the long run.
Louis: It’s interesting you say that, because I recently spoke with a member who has underground lines they’re concerned about. It’s true that trees don’t impact underground lines, but erosion and flooding do. In places where we’ve had underground lines for years, erosion and flooding are washing them away. They’re also typically more expensive and time-consuming to replace. Undergrounding is a tool we do use to prevent outages, but it’s not the answer to all problems. In some places, the cost to underground lines is more expensive than expected because there’s a lot of ledge or rock, or other underground utilities we have to build around. Yes, it can help, but it’s more expensive to replace and repair, and it’s not immune to damage.
Steve: We have to respond to changing weather, and there aren’t simple solutions to all situations. We have to find approaches that are specific to the problem area. WEC and other utilities need to be creative in being responsive to our changing climate.
Group Net Metering Tariff Case Resolved
Louis: A tariff case for group net metering in which Washington Electric has been involved in is now resolved.
Steve: This resulted from a decision made over five years ago, when WEC proposed, and the Public Utilities Commission [PUC] approved, a tariff regarding the compensation received by a generator of a group net-metered system hooked up directly to the grid.The PUC has since decided that this tariff does not conform to the law. So, we and the PUC are correcting what appears to be both of our errors. It impacts a small percentage of our net metering members, and everyone impacted has been made aware of the ruling.
Louis: The PUC is the ultimate arbiter, and long story short, we were doing it incorrectly. In this type of group net metering, multiple members anywhere in a utility’s service can benefit from a designated net metering array interconnected to the system. The basic issue was how Washington Electric was accounting for certain group net metering systems and accounting for the payment for excess power generated by those systems. The rules around net metering mean it’s not entirely clear we were doing it incorrectly, and the net amount of money is not very great, in the tens of thousands.
But we’re glad the PUC resolved this, and we’re making it right for both individual members and membership at large. We’ve gone back and resolved that by paying members we owed. In cases where the accounting showed members owed Washington Electric, we’ve put a debit on their account and set up a payment plan with those members.
What we argued is that we should neither pay out nor recoup, since we were operating under a tariff: any errors should be dealt with going forward, not retroactively. That was unsuccessful with the PUC, and we have changed how we do our billing.
Why is this newsworthy? For one thing, transparency with our members. For another, it was not really about the financial impact one way or the other. Washington Electric was arguing for a way of doing the accounting that it believed was truer to the spirit of net metering being about reducing your own power consumption, rather than getting paid for the power you generate.
Steve: The resolution is fair. WEC is restoring payments and collections to what they should have been, as the PUC has now decided. It means some members are going to get refunded, and some are going to have to pay some. The settlement is included in bills, and we’re offering payment plans for amounts over $100.
Changes to Renewable Energy Standard
Steve: To lead into the larger discussion of Vermont’s revised Renewable Energy Standard [RES], group net metering systems of the type described in the tariff case are no longer going to be permitted with net metering tariffs under the new Renewable Energy Standard. They’re considered by the state to be essentially for-profit merchant generators, rather than true net metering systems.
Understanding the new group net metering provision is important to our members. Group net metering of the type where generation hooks directly to the grid, and the supposed off-taker of that power may be anywhere else in WEC territory—which resembles merchant generation, but at lucrative net metering rates—is no longer going to be permitted. But group net metering sited at the location of several contiguous local households banded together is still permitted and will continue. This makes it possible to consume power in the immediate vicinity of where it is generated. Once storage is eventually added to those sites, distributed generation becomes distributed consumption, fulfilling the true promise of local solar energy.
But the main point of the RES is the increased percentage of renewable power required to be purchased or generated by Vermont utilities for their customers to be 100%.
Louis: That’s right. The RES bill that was passed by the legislature, vetoed by the governor, and then overridden by the legislature, makes a number of changes to how utilities purchase their power. It speeds up the timetable for utilities that are not already 100% renewable. Right now, three Vermont utilities provide 100% renewable electric power: Washington Electric, Burlington Electric Department, and Swanton Electric. Washington Electric supported the bill because we think electricity in Vermont should be renewable, and we think fellow utilities should join us in providing 100% renewable power.
As Steve said, one change is new group net metering systems of the type described above will no longer be allowed to come online. Renewable Energy Vermont suggested and supported that change, recognizing that group net metering can often be merchant generation rather than net metering designed to offset the power the members use themselves. We also supported that change.
Another component of the bill requires 100% renewable utilities to connect new load growth to new renewable generation in the ISO-New England grid. That will likely lead to expenses for WEC members. Any time you limit your options, you limit your low-cost options. It’s not likely to be a huge cost increase, because there are new renewables brought online in the New England system all the time, and we’ll be able to purchase power from any of those systems to supply our load growth.
Additionally, Washington Electric got our own provision in the bill for Hydro-Québec power we have a contract for, but don’t purchase ourselves. If we purchase that power, it can count toward our load growth. We were concerned we might be in a position where we were obligated to buy that power, but it wouldn’t count toward that load growth obligation: through 2028, it will count.
Steve: Instituting the RES in 2016 has had a demonstrable effect on the overall cleanliness of Vermont’s energy sector. It’s an excellent path to say utilities have the responsibility of meeting these standards by this time.
Louis: Any purchasing mandate is designed to favor one group or seller over another, and that’s a decision the legislature has made. Steve’s right; the RES has had a good environmental impact on Vermont. In 2015, something close to 20% of the state’s total carbon came from the electric sector. It’s around 2% now, and that’s largely attributable to the RES.
Welcome New Staff
Louis: We have a number of new staff at Washington Electric, and I invite our members to join me in welcoming them: Sean Kidder has joined us as an apprentice lineman, Barry Richardson as a stockkeeper, Scott McDonald as a mechanic, and David Sargent as an equipment operator.
That’s quite a few new folks for an electric co-op of our size, and we’re happy and excited to have all of them. They have different experiences and backgrounds, and show great promise in helping our membership and working with our colleagues here.
Advanced Meters Update
Louis: The review team is going through responses to our request for proposals, and we’ll soon select a vendor. We still don’t have a grant agreement with the state yet, but we’re working on that.
Steve: Let me give a preview of what we expect advanced meters will do. First, they’ll give WEC staff a better understanding about when, how, and where power is being used, which should help improve the overall operation of our grid. This increased information should facilitate both reporting and management of outages, enabling WEC to direct resources to where they are needed more efficiently.
The new meters should also allow WEC to design rates and rate structures that are more responsive to individual members’ usage. For example, we expect to create time-of-use rates that will be useful for many members who have the flexibility and desire to change their consumption of electricity to a period of the day when it’s cheaper, whether for charging EVs, running clothes dryers, hot water tanks, or pre-heating or cooling their house with a heat pump, to mention a few relatively high-consumption devices. Right now, there’s little financial reason for members to change when they use electricity. Opportunities will emerge for monitoring and control of some devices to optimize overall power usage in order to reduce costs.
Louis: Essentially, these meters will give us more information faster and better. Whether it’s outages and where they’re occurring, the quality of the voltage at members’ houses, or the timing and type of use happening to allow a time-of-use rate.
Steve: We’re opening the door to many applications we’ve heard about, but haven’t had the capability to consider or to implement efficiently. It’s going to be an interesting time for WEC and WEC members as these meters come online and we get practical experience with their capabilities.