Section 1251 of the EPAct of 2005, PURPA 111(d) Standard (11) Net Metering states the following:

The definition of net metering taken for this section refers simply to the netting on a kwh-kwh basis the flow of electricity from a site with member-owned generation to SEIEC's local distribution facilities against the flow of electricity from SEIEC's local distribution facilities to the member.  Under net metering, electricity produced by member-owned generation such as wind turbines, solar systems, fuel cells, etc. will cause the existing electricity meter to deduct the amount of energy consumed by the member on a one-to-one basis at the same site.  This provides the member-generator with full retail value of all electricity produced by the member-owned generation.

In order for SEIEC to make a specific determination as to whether this standard is appropriate to implement, SEIEC reviewed the stated purpose for this new standard as follows:

      (1)     Conservation of energy supplied by electric utilities

      (2)     Optimal efficiency of electric utility facilities and resources

      (3)     Equitable rates for electric consumers

While net metering provides a financial incentive for distributive generation facilities by netting the energy consumed on a one-to-one basis with the energy produced, it is likely that net metering will permit SEIEC to purchase less energy from its wholesale power supplier.  This means that the amount of energy supplied by SEIEC would likely decline which does meet the first stated purpose above. 

The third stated purpose above is the primary area of concern for implementing this new standard.  Net Metering undermines the equity of retail rates by providing member-generated energy to be netted on a one-to-one basis with SEIEC provided energy.  This means that SEIEC would pay member-generators the retail price for wholesale power.  This means that SEIEC would be paying member-generators for services that are included in the retail rate that the member-generator is not supplying including costs such as transmission, distribution, operating and maintenance expenses, and administrative and general expenses.  These costs would have to be recovered from all other members on SEIEC's system, leading to a cost shift from member-generators to all other members on the system.  This situation would lead to inequitable rates for electric consumers, which is also in direct opposition to the third stated purpose of the PURPA standards.

SEIEC's position on the Net Metering standard is to not offer Net Metering.

The vast majority of distributive generation technologies available do not have the ability to generate at reliability levels of most utility-owned generation.  This means that while distributive generation may decrease the overall amount of energy supplied by SEIEC, it does not necessarily mean that distributive generation will allow SEIEC and its wholesale power supplier the ability to operate the facilities more efficiently.  In fact, distributive generation facilities may cause utility facilities and resources to be operated less efficiently.  If distributive generation facilities had the ability to operate at reliability levels of utility generation facilities, utilities could decrease the size of generation facilities, transmission facilities and distribution facilities required and therefore operate more efficiently.  Given that this is not the case, when distributive generation facilities are not operating such as wind turbines without the availability of wind, the utility must have the generation capacity, transmission capacity and distribution capacity required to cover the load that is sometimes supplied by the distributive generation facilities.  Otherwise, when the distributive generation facility was not operating, there would be an energy shortfall.   This means that the utility must have the generation, transmission and distribution capacity required to serve the entire distributive generation load but does not have the ability to generate and deliver the electricity on an as needed basis.  This leads to utilities constructing more than necessary generation, transmission and distribution capacity to cover the more unreliable distributive generation technologies.  This leads to less efficient operations of utility facilities and resources.  The level of concern regarding this issue depends upon the capacity and type of distributive generation technologies installed and connected to SEIEC's system. 

In order to strike a balance between providing an incentive to participating renewable energy member-generators and protecting the legitimate financial interests of SEIEC, while not creating unwarranted subsidies born by the non-participating members, SEIEC has requested and received a change from its wholesale power supplier which provides SEIEC the ability to negotiate its own appropriate wholesale price for the energy produced by renewable energy member-generators of certain sizes.  When SEIEC receives an application for a qualified, renewable energy generating facility with a nameplate rating of less than 50 kw for residential applications and a nameplate rating of less than 200 kw for all other applications, SEIEC will require the generating facility to meet all of the applicable requirements and specifications of SEIEC's Interconnection Standards.  If the generating facility meets the requirements and specifications of SEIEC's Interconnection Standards, SEIEC will agree to purchase the wholesale energy delivered to SEIEC's distribution system from the qualifying facility based upon SEIEC's avoided costs for wholesale power (See Appendix A -  SEIEC's Distributed Generation From Renewable Resources Rider DG-1) taking into consideration the capacity reliability factor of the generating facility.  SEIEC's purchase of the energy from a qualifying facility will result in the corresponding sale of said quantities to other members at the appropriate, prevailing SEIEC retail rate schedule.  All energy consumed by the qualifying facility will be billed at the appropriate, prevailing SEIEC retail rate schedule.  SEIEC retains the right to review the amount of renewable energy connected to the system and may limit the total amount, if necessary.

Consistent with SEIEC's full-requirements power supply contract with its wholesale power supplier, SIPC, the purchase of energy supplied by a qualified, renewable energy member-generator with a nameplate rating of 50 kw or more for residential applications and a nameplate rating of 200 kw or more for all other rate classes, will be made by SIPC.  When SEIEC receives an application for a qualified, renewable energy generating facility with a nameplate rating of 50 kw or more for residential applications and a nameplate rating of 200 kw or more for all other applications, SEIEC will require the generating facility to meet all of the applicable requirements and specifications of SEIEC's Interconnection Standard and SIPC's Facilities Connection Requirements.  If the generating facility meets the requirements and specifications of SEIEC's Interconnection Standard and SIPC's Facilities Connection Requirements, SIPC will agree to purchase the wholesale energy from the qualifying facility.  SIPC's rate is based on the cost of generation-avoided cost and purchased power over the last calendar year divided by the total kwh sales.  This rate is adjusted each January and is used through the remainder of that year. SIPC retains the right to review the amount of renewable energy connected to the member's system and may limit the total amount, if necessary.

In addition, in order to promote and assist the feasibility of renewable energy projects within SEIEC's service area, SEIEC has established and will administer its own Renewable Energy Resource Trust Fund (RERTF) (See Appendix B - SEIEC's Renewable Energy Resource Trust Fund).  This fund will allow SEIEC members to voluntarily participate in funding qualified renewable energy projects within the cooperative's territory by paying for renewable energy credits.  All funds generated by this trust fund will be distributed by SEIEC in a fair and equitable manner to qualified renewable energy projects that deliver energy to SEIEC.  This program allows members the opportunity to fund local renewable energy projects that actually deliver energy into their own cooperative's distribution system.