The Real Low Down Skinny on HOW SURPLUS POWER IS REIMBURSED

Surplus power.  Extra kilowatt hours.  How much will I be paid for surplus PV co-generation?  Here's the real scoop for ARIZONA, based on Arizona Revised Statutes and Corporation Commission Rulemaking.


ARTICLE 18. RENEWABLE ENERGY STANDARD AND TARIFF is found in New Section made by final rulemaking at 13 A.A.R. 2389, effective August 14, 2007 (Supp. 07-2). It is labeled R14-2-1801 and definition M states:

"Net Metering" means a system of metering electricity by which the Affected Utility credits the customer at the full retail rate for each kilowatt-hour of electricity produced by an Eligible Renewable Energy Resource system installed on the customer-generator's side of the electric meter, up to the total amount of electricity used by that customer during an annualized period, and which compensates the customer-generator at the end of the annualized period for any excess credits at a rate equal to the Affected Utility's avoided cost of wholesale power. The Affected Utility does not charge the customer-generator any additional fees or charges or impose any equipment or other requirements unless the same is imposed on customers in the same rate class that the customer-generator would qualify for if the customer-generator did not have generation equipment.

APS states in their web based Residential General Solar FAQs that:

When you sell energy back to APS you can choose to be paid at the wholesale rate -- avoided cost -- specified in the EPR-2 rate or you can select our EPR-6 net metering rate.

The EPR-6 rate appears to be higher for all calculations, but please tell me if I'm wrong.

So my personal estimate is that I have a baseline power consumption around 1200 kWh/month.  And to that I need to add air conditioning for Arizona at the amounts of +1200 kWh/month on average for 6 months -- almost entirely on peak hours.  Current production is already above 100 kWh/day, so I expect to have at least 36500 kWh of mostly peak power.  Even in the worst month, I expect to create a surplus of peak power -- especially since I have doubled my roof insulation and shaded over 1600 square feet of the roof surface with the elevated solar PV panels.  Also I sealed a major duct leak that blew cold air outside and sucked hot air inside.  Last August' bill of $460 should go down to around $350 or less based on the home improvements.  Having started this blog with a breakdown of a typical APS bill, half generation and the other half transmission/delivery related and billing and taxes, I recently saw posted an APS monthly bill for a co-generation system with surplus peak and surplus off-peak.  That bill was just below $10.  The reason is that the transmission/delivery charges are usage based and will disappear for months with surplus co-generation.  So with 36500 kWh minus 14400 baseline minus 7200 extra AC, that leaves me 14900 kWh to sell back at year end.  Based on the non-firm on-peak rate of 6.590 cents, that is $981.91.  At the off-peak rate of 5.963 cents it is $888.49.

The EPR-6 rate states:

D. For the last billing period of each calendar year or for the last billing period at the time the customer discontinues taking service under this rate schedule; The Company shall issue a billing credit to the customer for any remaining Excess Generation balance. In the event the customer’s electric service is terminated, after applying a billing credit for any Excess Generation up to the amount the customers owes (sic) the Company, the Company shall issue a check for the remaining value of the Excess Generation balance. The payment or credit will be determined at the Company’s annual avoided costs (Annual Purchase Rate), which are updated annually and as specified below:

Non-Firm                               Firm

On-peak  Off-peak  Total        On-peak  Off-peak  Total        Annual Purchase Rates (¢/kWh) 

6.590      5.963      6.187       7.714      6.172       6.722

I have no idea why they TOTAL the peak and off-peak amounts... Anybody?  Besides, while they appear to be averages, not totals -- they are neither.  The totals cannot be related simply to the on-peak and off-peak numbers show.  Nowhere does it mention any use of total in calculating the billing credit on the last billing period of the year.  So it must not matter how that number is derived.