Renewable energy households in Highland will have to pay fee first before receiving any rebate
Amendments to city of Highland policy will now allow commercial and industrial organizations to use renewable energy. However, all renewable energy users in the city — commercial or residential — who wish to receive a rebate on extra power they create will also have to start paying a monthly fee.
Highland City Council on May 21 approved a number of amendments to the city’s net metering and interconnection policies. The two policies lean on each other.
The city’s net metering policy provides an outlet for Highland's renewable energy users to gain credit for excess energy created by their generation setup. According to the policy, the majority of systems eligible for net metering are photovoltaic, otherwise known as solar power, or small wind turbine systems. Other means of renewable energy eligible for net metering are considered on a case-by-case basis by the city.
To be eligible for net metering, the user must also qualify under the city’s interconnection policy, which outlines the terms and qualifications needed for the renewable energy system to be connected with the city’s power distribution network.
Highland Director of Light and Power Dan Cook said that the two policies have been in place for about four years.
“It was really just a response to the market — that solar energy is getting more prevalent,” Cook said.
Cook also said that the policy provides regulation so that renewable energy does not have a negative impact on the city's overall distribution system. However, Cook said the legislation that applies to renewable energy has rapidly changed over the past four years, and the policies have thrown up some flags for the city.
“The original one did not have any provisions for commercial or industrial,” Cook said.
A new amendment to the net metering policy allows for commercial and industrial entities to use renewable energy, as long as their installations run up to 20 kilowatts (kW), or 50 percent of their consumption, depending on whichever is lesser. Cook said that inquiries for larger systems will be determined on a case-by-case basis.
So far, Cook said there have been about two or three inquiries from commercial/industrial parties.
“The other major change would be that there is a monthly bill,” Cook said.
Another amendment to the net metering policy states the city will start charging a monthly "distribution system utilization" fee for those eligible for net metering and interconnection.
For residential and single-phase commercial accounts smaller than 20 kW the fee will be $25. However, the fee “for any other systems will be determined when considering the installation itself,” according to the policy.
Cook said that net metering is basically allowing renewable energy users to pass up on general maintenance costs, though their systems are still hooked up to the city distribution system.
“Because the normal maintenance cost is covered by the kilowatt charges, and they are displacing their kilowatts and not paying for it,” Cook said.
Therefore, the city needed to create a policy to make sure that it was not cannibalizing the Light and Power Department, according to Cook. He said that the $25 fee is based on the average home kilowatt usage.
On average, he said a home displaces at least 800 kW. Currently, he said a kW runs at 3 cents, which comes out to about $24 with average usage.
“It is unavoidable cost that ensures that all customers pay for their appropriate share of the system maintenance costs,” Cook said.
Currently, Cook said that renewable energy is only small scale in Highland, and this measure was instilled in case it becomes more prevalent.
“Realistically, right now it impacts six people,” Cook said.
The city of Highland has more than 5,200 residential customers.
Though the policy does not state a date for the fee to become effective, Cook said that users should expect to start seeing the fee in the July billing cycle.
Other policy changes
There were also a few other changes made to both of the policies.
“The rest of it is kind of small house keeping, if you ask me,” Cook said.
The policy states that the city can limit the size of the net metered installation. This measure was put in so the installation size does not exceed the electric load of the structure it is installed on, according to the policy.
Now, the policy states that the general rule for residential system installation is limited to 90 percent of the household’s prior yearly consumption. As stated above, for commercial and industrial, it is up to 20 kW or 50 percent of their consumption, depending on whichever is lesser.
The other changes relate to liability, according to Cook.
Before a new renewable energy system can be constructed, plans have to be reviewed and approved by a structural engineer.
The interconnection policy also includes two new sections regarding liability. These sections include indemnification and insurance.
For indemnification, the policy states the city is protected and defended by the customer for all damages and expenses resulting from any third-party claim on the customer’s negligence or willful misconduct or a breach of the agreement. The section also states that the city will do the same for the customer.
As for insurance, the policy requires the customer to provide proof of current homeowner’s insurance, commercial building insurance, or other general liability policy. The section also states that the customer will name the utility as an additional insured on its associated policy.
“We’re not only protecting the utility, but the customer,” Cook said.
Cook said that anyone effected by these policy changes will be notified by a letter that will be sent out this month.
This story was originally published June 4, 2018 at 2:57 PM with the headline "Renewable energy households in Highland will have to pay fee first before receiving any rebate."