Frequently Asked Questions Trico Proposed Net Metering Tariff Modifications

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1 Frequently Asked Questions Trico Proposed Net Metering Tariff Modifications 1. Who is a self-generation or Net Metering Member? This is a Member who has installed grid-connected renewable generation, such as solar or wind, at their home or place of business to offset the energy purchased from Trico and who takes service under Trico s Net Metering Tariff. When a net metering Member produces more energy than their home or business uses in a given hour, they are able to sell the extra energy back to Trico. When their home or business is using more energy than they are generating (cloudy days, nighttime, several energy-intensive appliances running at once), they buy power from Trico like any other Member. Whether buying from Trico or selling electricity to Trico, Members still use the grid (the network of power plants, poles, lines, transformers and advanced two-way digital meters). 2. What is Trico proposing to change regarding self-generation or Net Metering? Trico is proposing a New Net Metering Tariff for all grid-connected renewable generation systems. This proposal affects only those accepted system applications received by Trico after February 28, This new tariff would modify the way our Members receive credit for any excess energy generated by them and delivered to Trico through connection to the grid. The credit will appear on the Member s bill each month and will be made at Trico s avoided cost rate (the same cost Trico pays to other energy suppliers). Also, after February 28, 2015, new Net-Metered Members will not be able to bank the excess generation each month or roll any excess generation into the next month. 3. Why is Trico proposing a new Net Metering Tariff now? For years, our Members have paid for power based on how much energy they use. The cost of building and maintaining the grid used to deliver the energy is rolled in to the per-kilowatt hour (kwh) energy charge to Members. However, when Members generate some of their own power under the current rate tariff, they don t pay an equal share for the fixed costs of building and maintaining the grid, even though they use the grid to both buy and sell electricity. Consequently, the renewable generation Member doesn t pay for the full amount of the fixed costs that Trico incurs to serve that Member. Those costs are being borne by our other Members. This issue needs to be addressed at this time because of the recent and rapid growth in grid-connected renewable generation systems and the fact that Members acquiring these systems are being asked to make a longterm financial commitment based on assumptions related to current utility price structures. Delaying action on this issue ultimately will result in greater expenses shared by all Members. 1 P a g e

2 4. What are the key features of the proposed New Net Metering Tariff? Pending approval from the Arizona Corporation Commission, any Member who submits an Interconnection Application for a grid-connected renewable generation system, such as solar or wind, after February 28, 2015, will take service under the new Net Metering Tariff. That means the Member no longer will be able to bank any excess generation from their generation facility monthly and roll it into the next month. Further, the amount of excess generation delivered to Trico from the Member s system will be credited to the Member each month at Trico s avoided cost rate (the same cost Trico pays to other energy suppliers). Any energy generated that is equal to or less than the Member s load that month will continue to be netted against the Member s bill. Trico is proposing to grandfather all existing Net Metering Tariff Members who are currently take service under the current Net Metering Tariff. That means their service and tariff would remain unchanged. 5. How would the proposed New Net Metering Tariff work? At the end of each month, Trico will meter the excess generation, if any, in kilowatt hours (kwh) produced by a Member s grid-connected renewable generation system and will issue a credit for the excess energy (kwh) at Trico s avoided cost rate (the same cost Trico pays to other energy suppliers). This credit will appear as a line item on the Member s bill. 6. Specifically, how will the overall bill change for new solar customers? New grid-connected renewable generation Members no longer will bank the excess generation from their systems for use in future months. Instead, Net Metering Tariff Members will be credited on their bill for their excess generation, in kilowatt hours (kwh), at Trico s avoided cost rate at the end of each month. 7. How will new and current Net Metering customers be impacted? a. Member s system is already interconnected Trico has requested that you are considered grandfathered under the current Net Metering Tariff, resulting in no impact to you. b. Member s system application received, pending review and interconnection If Trico has received and accepted your Interconnection Application for a gridconnected renewable generation system by midnight on February 28, 2015, you will be considered grandfathered under the current Net Metering Tariff and your impact will be the same as 7(a) above. c. Member s system application not yet received 2 P a g e

3 If Trico did not receive your Interconnection Application by midnight on February 28, 2015, and you cannot provide proof that your grid-connected renewable generation system has passed the jurisdictional inspection, you will be subject to the New Net Metering Tariff as approved by the Arizona Corporation Commission (ACC) under Trico s Rate Case filing dated October 23, 2015 (Docket No. E-01461A ) d. Not a Net Metering Member If you don t have a grid-connected renewable generation system on your house and do not plan to install a system, you will see no change except for a reduction in the Net Metering subsidy you pay. Over time, the new Net Metering Tariff we have requested should reduce future energy rate increases and Power Cost Adjustor increases you pay Trico. 8. Does Trico support the installation of grid-connected renewable generation such as solar? Absolutely! Trico fully supports the installation of grid-connected renewable generation systems, including solar, by our Members. Trico does not propose any new costs for such installations. 9. Do these changes mean that solar (renewable generation Net Metering) Members are being penalized? Members with grid-connected renewable generation systems, such as solar or wind, are not being penalized. Members who currently have grid-connected systems will see no change. Members who install grid-connected renewable generation systems after February 28, 2015 will still be able to offset their own load at the retail energy rate. Excess energy generated by their system will be credited to them at the avoided cost rate. Currently our Members who do not have renewable generation systems are being asked to subsidize the Net Metering Members because under current rules, Trico is required to purchase excess power from the net metering Members at costs that are much higher than energy available from other sources. 10. Will Net Metering continue? Yes, Net Metering will continue. For those Members who already have installed grid-connected renewable generation systems and participate in Net Metering, there will be no impact to you. New grid-connected renewable generation Members (applications received after February 28, 2015) will be subject to the New Net Metering Tariff, once it is approved by the Arizona Corporation Commission. 11. Do the changes to the Net Metering Tariffs only apply to solar customers? 3 P a g e

4 No, the requested changes are intended to apply to any grid connected renewable energy technology that Members might deploy. Currently, the only technologies interconnected to Trico s grid are wind and solar. 12. Does Trico still support solar energy? Yes, Trico is very committed to solar energy generation. In fact, to date, Trico has made more than $6 million available in Up-Front Incentives (not including Net Metering) to help Members install grid-connected renewable generation systems. We also have made significant investments in community-scale solar such as the SunWatts Sun Farm. The SunWatts Sun Farm allows our residential and commercial Members to participate in the benefits of solar energy without having to install panels on their own property. Currently, more than 6% of Trico s energy capacity is in the form of solar generation. Trico s goal, with respect to gridconnected renewable energy, is to acquire that energy at the best possible price for the benefit all of our Members. 13. What will the Avoided Cost Rate be under the new tariff? The Avoided Cost rate (the same cost Trico pays to other energy suppliers) would remain at $ per kwh, subject to ACC approval. 14. As an existing Net Metering Member what will be my Avoided Cost Rate? Trico has proposed that the Avoided Cost Rate remain at $ per kwh for both the existing Net Metering Tariff and for the proposed New Net Metering Tariff. This is the same rate Trico pays to other energy suppliers. 15. If my system is already installed, will I be grandfathered under the existing Net Metering Tariff forever, or only for a certain period of time? Trico has proposed in its filing with the Arizona Corporation Commission (ACC) that if your system was installed or if Trico received your grid-connected renewable generation system application prior to midnight on February 28, 2015, you will be grandfathered under the existing Net Metering Rules and Tariff. You will have the benefit of the current rates until the end of the term of your existing interconnection agreement. 18. What happens if I sell my home? Just as is the case today, if you sell your home, your interconnection agreement can be assigned to the new owner by written consent. The new owner can continue to take service under the existing Net Metering Tariff for the remainder of the term of the initial interconnection agreement, typically 20 years. 4 P a g e

5 19. Does Trico expect to meet the Renewable Energy goals set forth by the Arizona Corporation Commission? Trico has established and maintained a vibrant renewable energy portfolio, focused principally on distributed solar generation. Trico was recognized by the Solar Electric Power Association (SEPA) as the nation s Solar Cooperative of the Year in Although electric cooperatives are not subject to mandatory renewable energy targets under the Renewable Energy Standard & Tariff (REST) Rules, Trico currently exceeds the Commission s renewable energy distributed generation target for investor-owned utilities under that rule. Trico will continue its support of renewable energy programs so long as the programs provide benefits to our Members. 20. What types of renewable energy and energy efficiency programs does Trico offer? Trico currently offers renewable energy programs for the installation of gridconnected renewable generation systems on residential and commercial structures. We have a PV (photovoltaic) for Schools program to encourage the installation of grid-connected renewable generation systems on schools in our service territory. Trico also offers incentives for the installation of residential solar water heating systems. Trico has a Community Solar Program through which Members can purchase the energy output of the utility scale PV panels and receive a credit on their monthly bills. Trico s energy efficiency programs include energy efficiency workshops, a Classroom Connections program featuring Trico staff teaching 3 rd and 4 th graders ways to be more energy efficient. Trico also offers its Operation Cool Shade program, which offers our Members the opportunity to purchase low-cost shade trees for their homes. Finally, Trico partners with Pima County s Weatherization program to provide funds for home energy efficiency upgrades to those Members in Trico s service territory who meet program eligibility requirements. 21. Why is Trico charging me $0.1216/kWh and only paying me $ /kWh? The $0.1216/kWh rate includes the fixed costs of purchasing and delivering the energy to our Members. The cost of maintaining the grid and other system costs are added to the cost of the energy to arrive at this rate. Under the new Net Metering tariff, Trico will pay the Net Metering Member the same amount for their excess energy as it would have to pay another generator to buy power on the grid. That amount is currently $.03662/kWh. 22. How often will the avoided cost rate change? The avoided cost rate (the same cost Trico pays to other energy suppliers), until this year, had not changed for a number of years. Trico will update this rate from time to 5 P a g e

6 time as the cost of energy changes. Any further modifications to Trico s Net Metering Tariff are subject to Arizona Corporation Commission approval. 23. What happens if my excess generation credit is larger than my total bill? If your excess generation credit is larger than your bill, then you will see a credit applied to your account on your next month s bill that will offset the usage during that month. 24. When will you know if Trico s Rate Case and the new Net Metering Tariff are approved? The Arizona Corporation Commission does not have a time line or a limit for reviewing Trico s request. However, the rate case process generally takes about a year and a half to two years to complete. Trico has requested that the Arizona Corporation Commission rule on the Trico rate case by January 1, 2017, however Trico does not know the exact timing of approval of the rate case. 25. What does the Net Metering Charge on your bill pay for? This charge, currently $3.38 per month, is applied to the bills of Members who have grid-connected renewable generation systems, such as solar or wind, at their homes or businesses. The charge covers a portion of the additional costs incurred by Trico to pay for the cellular service used to remotely read and download data from the bi-directional meter on the Member s home or place of business. It does not cover the full cost associated with a Member s Net Metered system. 6 P a g e