A Regulatory Perspective on Distributed Generation

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1 A Regulatory Perspective on Distributed Generation Southwest Electrical Metering Association Spring Meeting Galveston June 10, 2015 Darryl Nelson Rates and Regulatory

2 Agenda Why Rules are Needed Texas Regulatory Overview Legislature / Statutes Public Utility Commission of Texas Substantive Rules DG Rules Interconnection Distributed Renewable Generation DRG Metering Reporting Current Issues Who should sign the interconnection agreement? Should the 10 MW cap be eliminated? 2

3 Example of the Need for DG Rules Solar Array on A-frame Structure 3

4 Example of the Need for DG Rules Solar Array on A-frame Structure 4

5 Example of the Need for DG Rules Meter 5

6 Example of the Need for DG Rules Disconnect 6

7 Example of the Need for DG Rules Solar Array to Serve this Trailer 7

8 Example of the Need for DG Rules Inverter Wiring 8

9 Example of the Need for DG Rules Solar Array Wiring to Inverter (over stove!) 9

Renewables Metering 2 channel Interconnection Technical Requirements Registration Renewables Metering

10 Texas Regulatory Overview Tariffs TDSPs / Utilities Statutes Legislature Rules PUCT Interconnection Application Agreement Study Fees PURA 1999 Customer Safeguards Interconnection Energy Efficiency Renewables Metering 2 channel Interconnection Technical Requirements Registration Renewables Metering Distributed Generation Items Protocols ERCOT Registration Wholesale Settlement Metering Telemetry Markets / Services 10

11 Statutes Distributed Generation Public Utility Regulatory Act (PURA) Chapter 39 Restructuring of Electric Utility Industry Statute Subsection Title / Details Enacted (b)(3) Customer Safeguards SB "(b) A customer is entitled: (3) to have access to providers of energy efficiency services, to on-site distributed generation, and to providers of energy generated by renewable energy resources;" (a)(4)(A) Goal for Energy Efficiency SB "(4) each electric utility in the ERCOT region shall use its best efforts to encourage and facilitate the involvement of the region's retail electric providers in the delivery of efficiency programs and demand response programs under this section, including programs for demand-side renewable energy systems that: (A) use distributed renewable generation, as defined by Section ;" Interconnection of Distributed Renewable Generation (ERCOT) 2007 (a)(1) defines renewable DG as < 2 MW (a)(2) defines DRG owner (f) separate measurement of in-flow and out-flow (j) DRG must contract with retailer to buy out-flow Interconnection of Distributed Renewable Generation (Non-ERCOT) Distributed Natural Gas Generation Facilities

12 Public Utility Commission of Texas - Substantive Rules CHAPTER 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS Purpose and Scope of Rules. (a) Mission of the Public Utility Commission of Texas (commission). The mission of the commission is to assure the availability of safe, reliable, high quality services that meet the needs of all Texans at just and reasonable rates. To accomplish this mission, the commission shall regulate electric and telecommunications utilities as required while facilitating competition, operation of the free market, and customer choice. (b) This chapter is intended to establish a comprehensive system to accomplish the mission of the commission with respect to electric service and to establish the rights and responsibilities of the electric utilities, including transmission and distribution utilities, nonutility wholesale and retail market participants, and electric customers. This chapter shall be given a fair and impartial construction to obtain these objectives and shall be applied uniformly regardless of race, creed, color, national origin, ancestry 12

13 PUCT Rules Distributed Generation Public Utility Commission of Texas Substantive Rules Chapter 25 - Substantive Rules Applicable to Electric Service Providers Rule 25.5(32) Definitions Section Title / Details "(32) Distributed resource A generation, energy storage, or targeted demand-side resource, generally between one kilowatt and ten megawatts, located at a customer's site or near a load center, which may be connected at the distribution voltage level (below 60,000 volts), that provides advantages to the system, such as deferring the need for upgrading local distribution facilities." Interconnection of On-Site Distributed Generation The purpose of this section includes stating the terms and conditions that govern the interconnection and parallel operation of both on-site distributed generation in order to implement Public Utility Regulatory Act (PURA) (b)(3) and a natural gas distributed generation facility in order to implement PURA Technical Requirements for Interconnection and Parallel Operation of Distributed Generation The purpose of this section is to describe the requirements and procedures for safe and effective connection and operation of distributed generation. 13

14 PUCT Rules Distributed Generation, cont d Public Utility Commission of Texas Substantive Rules Chapter 25 - Substantive Rules Applicable to Electric Service Providers Rule Section Title / Details Metering for Distributed Renewable Generation (b)(1) < 50 kw DRG - in-flow and out-flow consumption (b)(2) 50 kw to 2,000 kw DRG - in-flow and out-flow interval data (b)(3) Customer option to not measure out-flow (b)(9) ERCOT must account for in-flow and out-flow in settlements Distributed Renewable Generation (b)(1) Defines DRG (b)(2) Defines DRG Owner (b)(3) Independent School District - Solar Generation - no capacity limit (c) Interconnection - 5-year warranty of DRGO (d) Renewable Energy Credits (RECs) ownership (m)(1)(E) Energy Efficiency Goal "(1) Standard offer, market transformation, and self-delivered programs: (E) may permit the use of distributed renewable generation, geothermal, heat pump, solar water heater and combined heat and power technologies, involving installations of ten megawatts or less;" 14

15 Definitions 25.5(32) Distributed resource A generation, energy storage, or targeted demand-side resource, generally between one kilowatt and ten megawatts, located at a customer's site or near a load center, which may be connected at the distribution voltage level (below 60,000 volts), that provides advantages to the system, such as deferring the need for upgrading local distribution facilities (c)(10) On-site distributed generation (or distributed generation) -- An electrical generating facility located at a customer s point of delivery (point of common coupling) of ten megawatts (MW) or less and connected at a voltage less than 60 kilovolts (kv) which may be connected in parallel operation to the utility system (b)(1) Distributed renewable generation (DRG) -- Electric generation equipment with a capacity of not more than 2,000 kilowatts provided by a renewable energy technology, as defined by Public Utility Regulatory Act (d), installed on a retail electric customer s side of the meter. 15

16 Renewable Installations at Oncor Facilities 1,800 1,600 1,400 1,200 1, Number of Facilities 8 6 1, Wind Solar PV Installed Capacity (kw) 18,000 16, Capacity (kw) 14,000 12,000 10,000 8,000 6,000 4,000 2, , ,405 2,744 7,901 6,387 4,924 2, Wind Solar PV

DG Reporting Requirements 25.211(n) Reporting requirements.

of facility Renewable (Y/N) Date application received Processing documents Correspondence

previous year o Change in DG ownership o Capacity rating of facility o Renewable (Y/N) o

17 DG Reporting Requirements (n) Reporting requirements. Data Maintained for each Applicant Name Business address Location by county Capacity rating of facility Renewable (Y/N) Date application received Processing documents Correspondence Final disposition Annual Report File by March 30 List each interconnected DG, including previous year o Change in DG ownership o Capacity rating of facility o Renewable (Y/N) o Feeder List all applications from previous year and final disposition 2014 Distributed Generation Interconnection Report Docket No

18 Current Issues Project No Rulemaking Related to Distributed Generation This rulemaking on distributed generation (DG) was initiated to address an issue that arose in the last DG rulemaking: ownership of distributed renewable generation (DRG) by an entity other than the retail customer The following utilities filed joint comments in this rulemaking: AEP-Texas Central AEP-Texas North CenterPoint Energy El Paso Electric Entergy Texas Oncor Electric Delivery Sharyland Utilities Southwestern Electric Power Southwestern Public Service Texas-New Mexico Power 18

19 Current Issues Project No Rulemaking Related to Distributed Generation Questions which the Staff asked guidance from the Commission: 1. Which types of entities should be permitted or required to be signatories to an interconnection agreement for DG? 2. Should the word "on-site" with regard to DG be retained in the DG rule? If so, how should it be defined? 3. Should the Commission eliminate the 10 megawatt (MW) cap in the DG rule? 19

20 Current Issues Project No Rulemaking Related to Distributed Generation Questions which the Staff asked guidance from the Commission: 1. Which types of entities should be permitted or required to be signatories to an interconnection agreement for DG? Only the retail customer. The utility s tariffed relationship and physical connection is to the customer. 2. Should the word "on-site" with regard to DG be retained in the DG rule? If so, how should it be defined? Yes. The Commission has explicitly been given authority over all DG facilities, but only when they are on-site. 3. Should the Commission eliminate the 10 megawatt (MW) cap in the DG rule? No. If rules are adopted addressing DG > 10 MW, then interconnection should be at the discretion of the utility. 20

21 Summary Texas Regulatory Overview Statutes / PUCT Rules / Utility Tariffs / ERCOT Protocols SB7 in 1999 began current DG structure Public Utility Commission of Texas Substantive Rules DG Rules Interconnection Distributed Renewable Generation DRG Metering Reporting Current Issues Who should sign the interconnection agreement? Only the retail customer Should the 10 MW cap be eliminated? No, > 10 MW DG needs special considerations 21

22 Questions? 22

SOUTH TEXAS ELECTRIC COOPERATIVE, INC.

SOUTH TEXAS ELECTRIC COOPERATIVE, INC. P.O. Box 119 Nursery, Texas 77976 (361) 575-6491 Fax (361) 576-1433 Transmission Interconnection Requirements Table of Contents I. Introduction II. Interconnection