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Santee Cooper to launch net billing pilot program
By Shelia Watson
Staff Writer
After a year-long review of regulatory standards in the Energy Policy Act of 2005, Santee Cooper’s board of directors has directed the utility’s staff to study the concept of net billing and present a pilot program for residential customers in the fall.
“We’ve been studying this issue for a while, and it’s never been (exclusively) about whether it’s a good thing, because we’ve always felt that the more we use renewable energy the better,” said Laura Varn, vice president of corporate communications for Santee Cooper. “The issues need to be fair and equitable for all customers, and we think we’ve come up with something that will allow us to purchase power from customers who use solar panels or other alternative sources.”
The federal Energy Policy Act of 2005 amended the Public Utility Regulatory Policies Act of 1978 to add five proposed regulatory standards relating to fuel sources, fossil fuel generating efficiency, interconnection, smart metering and net metering.
Under these federal laws, utility customers can use the electricity they generate with a wind turbine, offsetting what they would otherwise have to purchase from the utility at the retail price. If the customer produces any excess electricity beyond what is needed and net metering is not allowed, the utility purchases the excess electricity at the wholesale price, which is much lower than the retail price.
Net metering, or smart metering, is a program that serves as an incentive for investment in renewable energy generation. Already in place in 39 states, net metering is a low-cost, simplified method of metering the energy consumed at a home or business that is generated by the home or business’ renewable energy source, such as wind turbine or solar panels. Excess electricity produced by the alternative source spins the meter backward, banking the electricity until it is needed by the customer.
Santee Cooper’s formal evaluation of the policies consisted of public hearings in Myrtle Beach and in Moncks Corner last December and consideration of the oral and written comments filed in response to the hearings.
An evaluating panel concluded that Santee Cooper already meets or exceeds requirements regarding fuel sources and fossil fuel generation efficiency and recommended no change in those areas.
The panel also concluded that the cost of implementing a new smart metering standard would exceed any expected benefits and recommended not adopting that proposed standard. Rather, the panel recommended a study of net billing as a more equitable alternative than net metering.
“Implementation of the PURPA net metering standard as drafted would raise questions of rate equity between customers who used net metering and customers who did not,” the panel wrote.
Net billing and net metering are essentially the same thing, but each uses a different methodology in the way customers are charged, Varn said.
“With net metering there is a netting out of whatever the customer takes from us if there’s a cloudy day or at night. The difference between whatever power the customer uses from us and the excess from using solar power is what is put back on the grid. So the meter spins one way, and then spins another way,” she said.
One of the issues with net metering is that the customer must have the transmission lines run in the event there is a cloudy day or the alternative source is not producing enough energy for the customer’s needs, Varn said.
“A lot of costs go into producing and transmitting the power, and when the customer doesn’t need the energy, it’s not fair to have other customers pay for his portion (of the cost of running the transmission lines),” she said. “That’s where net metering is inequitable.”
What makes net billing a better method, she said, is that it separately measures both the power a customer would buy from the utility and the power the customer would sell back to the utility.
“This way the customer wouldn’t have distribution charges for selling it back to us,” she said. “We think it’s much more equitable.”
As for whether either method can be truly profitable for the consumer, Varn cites a Wall Street Journal article that figured the cost of implementing an alternative energy system in a home at between $30,000 and $50,000.
“It would take 15 to 20 years to break even on that,” she said.
In addition, much depends on where the home is located geographically.
“Here in South Carolina, there’s still a good bit of cloud cover,” Varn said. “A lot depends on how many solar panels are used, how often they’re using them, how much they’re producing, how often the customer is using our power as a backup. It’s a pilot program, so we’ll have to wait and see how it goes.”
Santee Cooper began its Green Power program in 2001 and actively partners with other entities in renewable energy projects involving solar and wind research.
The state-owned electric and water utility serves more than 156,000 residential and commercial customers in Berkeley, Georgetown and Horry counties and generates the power distributed by the state’s 20 electric cooperatives to serve more than 665,000 customers in all 46 counties.
The pilot program is not available to business customers yet, Varn said.
“The main issues with commercial billing is that sometimes the company doesn’t own the building,” she said. “Right now we’re concentrating the pilot program on residential, doing it in stages, and we’ll see how it can apply to commercial.”
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