FAQ House Bill 1169 - Net Metering for Coops

The purpose of 1169 is to simplify metering for people that want to install renewable energy electrical generators on their homes and businesses, while respecting the technical and financial integrity of rural electric associations in Colorado (coops).

1169 consists of two main parts:

•  Net Metering - the simplest and fairest form of metering for renewables, and

•  Interconnection Standards - rules to insure the safety, reliability, and performance of the entire electrical system.

Net metering uses a single meter with a single register to track the overall "net" use of electricity. If, for example, someone has a solar electric system on their roof, during the day their meter will probably be running backwards. At night, their meter would run forward. At the end of the month, if their solar system generated more electricity than their home or business used, there would be a credit to carry onto their next bill for the number of kilowatt-hours (kWh) of excess electricity they generated. The customer would still have to pay for any fixed or demand charges that appear on all customers' bills. At the end of the year, if they still had excess kWh, they would get a small check. This end-of-year credit is capped.

The Interconnection Standards in 1169 reference the interconnection rules created for Amendment 37. The A 37 rules are based on Interconnection Standards from the Federal Energy Regulatory Commission Order 2006 and were carefully crafted from the input of many stakeholders. After very careful analysis and thought by Xcel Energy and the Colorado Public Utility Commission, these interconnection standards were adopted with essentially no changes.

We have heard many concerns and questions about 1169. Some of the most common are answered below.

Will REAs have to buy $800 meters?

No. True net meters are pretty simple costing little, if any more than a regular utility meter. An $800 meter has a large number of functions that allow the utility to track a great amount of information - almost none of which is needed to satisfy 1169. If the coop wants to track additional information, they may, so long as the customer can easily read their "net" production. The coops should not blame 1169 for the cost of a super-fancy meter.

I understand there is already a net metering law in place. What is the matter with that law?

The existing law allows a coop to do almost anything and call it net metering. What has happened is that, with 25 coops serving Coloradoans, there were 25 different policies. The policies ranged from pretty good to bizarre. Even the average policy was so customer unfriendly that many customers choose to install renewable energy systems, but not tell their coops. We know of one mid-sized coop with more than 30,000 customers that had not one net metered customer - even though we knew of at least 4 solar electric systems that were connected to their system. This seems unwise and unsafe and a clear indication that the old law was unworkable.

We have heard that 1169 will require small coops to allow renewable energy systems that are as big as 1 or 2 million watts (1 or 2 megawatts or MWs). Won't systems that big hurt the grid?

No. A typical home might have a solar system as large as 3 or 4 thousand watts (kilowatts or kW) to reach net zero electricity. But no home or small business could ever connect a 1 MW system under 1169. There are 4 separate mechanisms that limit the size of a system for net metering. The first of which limits the size of the system to the service entrance capacity - 25 kW for a home or farm for many coops. So the maximum sized residential net metered system would be 25 kW for those coops.

While the interconnection standards set up a very easy process for a small home system, a large system (larger than 10 kW) must complete a rigorous process involving customer-paid studies to insure the safety and reliability of the interconnection - studies that must meet tough but fair standards for both the coop and the customer. The interconnection standards are 21 pages long and can be found in the rules for Amendment 37.

Very few customers will qualify for such a large system. For example, for Poudre Valley REA (35,000 members), perhaps just 5 or 6 customers could have such a system. Customers like Kodak or Corning Glass. The likelihood of even a 2 MW solar system offsetting even half of their electricity use is very small. So, in effect, for say Corning to install a 1 MW system is a lot like a homeowner installing a 1 kW system - the 1 MW system will only generate a fraction of the electricity the Corning company uses.

My coop says that small net metered customers will be cross-subsidized by everyone else and that rates will have to go up a lot. Is that true?

No. First, utility rates aren't perfect. There are always some number of winners and losers. For example, many coops have found that their rates heavily subsidize people with vacation cabins and are taking steps to correct that. Most coops adjust their rates every year, so we know adjusting rates is not a big deal. While it is possible that 1169 will require minor adjustments to keep rates as fair as reasonable, big rate changes are just not possible for 3 reasons.

First, 1169 caps the number of net metered customers. Second, there is value for all members for renewably generated electricity. Third, net metered customers pay the same fixed charges everybody else pays.

If you ignore advantages of distributed renewable generation like reducing peak and near peak loads, reducing the need for expensive expansion of distribution lines and substations, increased reliability for all customers, free to the coop capital expenses, not to mention the coal not burned and pollution and climate changing carbon dioxide that is not released, you might see a tiny cross-subsidization for net metered customers - maybe a third of a percent for every percent of customers that are net metered. If you include those factors in it is probably the net metered customers that are subsidizing everyone else.

For example, in 2006 Austin Electric placed the value of solar electric generation by customers at about 11 cents per kWh. In California , one study showed a value of more than 20 cents per kWh for customer generated solar electricity.

In another example, a study of the 2003 eastern seaboard blackout showed that just a few hundred megawatts of customer-sited solar electricity could have prevented the entire blackout saving literally billions of dollars.

OK, I see the subsidy issue for small systems. What about large systems? Is there a subsidy there?

Yes. But not the way you might think.

In every coop we looked at, a large customer will be demand metered. This means that there are 2 parts to their electric bill - one for the demand they use (in kW), one for the electricity they use (in kWh). Furthermore, it is very unlikely that a large manufacture will be able to generate nearly enough electricity to cover most of their electricity usage.

Since wind and solar are intermittent resources (don't generate electricity when the wind isn't blowing and the sun isn't shining), it is very likely that a large customer's demand charges will be the same with and without renewables. Demand charges make up a large part of these customers' bills. But a large customer's retail electricity rate is very small, in some cases as low as 2.5 cents per kWh. And that 2.5 cents is all the value they will receive for their renewably generated electricity under 1169.

It is quite likely that large renewable energy systems will subsidize everyone else's electricity rates.

I've heard there is a serious problem with some coops with lots of irrigation and 1169. Is that true?

Yes. This was brought to our attention at the end of the third negotiation meeting we had with the coops. It took us one day to come up with a 36-word fix to 1169 that should take care of this problem. Unfortunately, for reasons that are not clear to us, the coops failed to come back to the forth negotiating session we arranged. We want their knowledge and expertise to be certain that their concerns are reasonably met and we need the coops to be committed to finding reasonable consensus language that insures the reliability of the grid, and fairness to everyone concerned, while allowing the rapid adoption of customer-sited renewable energy.

PLEASE CONTACT YOUR REPRESENTATIVE ASAP to request that they vote "YEA" on the following bills:

HB 1281 - Increase the Renewable Energy Standard
This bill will double Colorado 's Renewable Portfolio Standard (RPS) from 10% by 2015 to 20% by 2020.  It would also expand the requirements to include Rural Electric Associations (aka - REAs, Coops) & Municipalities (aka Munis) with more than 40,000 customers; mandating that they generate at least 10% of their electricity from renewable sources.    

HB 1169 - Coop Electric Association Net Metering
Repeals and reenacts the statutes that govern net metering for customer-generators of cooperative electric associations.

HB 1037 - Natural Gas Energy Efficiency
Directs the PUC and natural gas distributors to develop and implement cost-effective energy efficiency programs.

SB 091 - Renewable Resource Generation Development Areas
Creates a task force to determine areas in Colorado to support the development of RE projects and a map of such areas.

SB 145 - Renewable Energy Fixtures Incentives
Gives counties and municipalities the authority to grant incentives to homeowners to install RE fixtures on residential property.

These bills are currently being actively discussed in the legislature so it is imperative that we act now. If you have the opportunity to meet with your reps in person, please do. Regardless, phone calls in the next week or so are VERY IMPORTANT. Please feel free to call or email CoSEIA if you have any additional questions.

Please contact your State Legislators as soon as possible to ask them to support the following bills. To find out who your State and Federal Representatives are, go to www.vote-smart.org. At that site you can determine your 9 digit zip if you don't know it, and from your 9-digit zip you will instantly get a list of your elected officials.

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