By Brandon Martin
As solar proliferation begins to take hold in Virginia, Martinsville City Council approved a Distributed Energy Resource Interconnection Procedures agreement to allow customers to connect their private solar systems to the city’s energy grid.
The agreement narrowly passed on a 3-2 vote, with council members Danny Turner and Tammy Pearson voting against the motion.
Why the disagreement?
Turner said he voted against the agreement because he felt it would mirror other “disastrous” electric agreements with the city.
“This is an example of our AMP (American Municipal Power) Ohio contract and how disastrous it was,” Turner said. “Because the last thing the City of Martinsville needs to do, financially for the electric department, is to be buying electricity from people that live here because we have 45 percent of fixed assets and very, very expensive electricity for 40 years that we are committed to. Then we are lessening the amount that we can buy on the open market.”
Turner said he viewed the agreement as “very prohibitive. The more people that sell electricity back to Martinsville, the higher we are going to have to charge the other guys.”
Mayor Kathy Lawson and Durwin Joyce, the director of the city’s electric department, disagreed.
“No, that is not a correct statement,” Lawson said.
“That is the idea about the net billing,” Joyce added. “Any system is going to have a point where they can’t take any more solar. That doesn’t have anything to do with your power costs. It has to do with the technical limitations of your system. We can’t put power back on AEP. We can have every customer in the city on solar and no power contracts, but it wouldn’t matter because we would still have to do something because it would violate our interconnect agreement with AEP to put power back on their transmission.”
The agreement will be different than others in that it will operate using net billing rather than net metering.
“With net metering, it doesn’t matter when you produce the power. You are credited at the retail rate,” Joyce said. “We are asking for a net billing rate which is an avoided cost rate. That avoided cost rate is calculated on energy transmission and capacity.”
For example, if a customer used 1,500 kWh then their bill would be about $180, according to Joyce. If the same customer also generated 1,800 kWh from their DER and 600 kWh were supplied by the city, then the cost to the customer would be approximately $82. If the customer also delivered 900 kWh back to the city, then the avoided cost rate would be 0.03535 per kWh.
“The 900 kWh at that avoided cost rate would be a credit of $31.82,” Joyce said. By subtracting the credit from the original $82 cost, “the net charge would be $50.42 for that bill which would give them a savings, in that example, of $129.”
Joyce said there were specific reasons to go with net billing rather than net metering.
“If you net meter, then your customer gets that full credit but they don’t contribute anything towards our transmission and capacity costs,” Joyce said. “If you net meter, then you are passing on some of those costs onto your other customers.”
Even if the city didn’t have any contracts with AMP Ohio, Joyce said he wouldn’t be making any different recommendations.
Turner asked for more time to allow for a second opinion on the agreement before it passed.
“There is a customer who needs this done now,” Lawson said.
“This (agreement) shows up at 5 o’clock on Friday with no chance for anybody to ask anybody with knowledge in it,” Turner said. “I don’t see the rush to pass it tonight when this is an important document that will bring in investment to the City of Martinsville, could save our taxpayers money and there is no need to knee-jerk this because we need to get to the facts.”
Pearson also said she would prefer to have a second look at the agreement before casting a vote.
How will the agreement work?
The procedures only apply to systems of 10 kilowatts (kW) up to 10 megawatts (MW) at the Point of Common Coupling (PCC) with Martinsville’s Distribution System. There will be a separate agreement drafted for residential customers with a system under 10 kW.
Joyce said he has received numerous inquiries about rooftop solar recently which prompted him to draft the agreement.
“There’s not a lot in here that is very different from the (State Corporation Commission) regulations so Appalachian, Dominion Power and their co-ops do have SCC oversight,” Joyce said. “This parallels that pretty close.”
As applications are received, Joyce said the electric department will strive to return answers within 30 days of receipt. There will be a $100 application fee on systems of less than 10 kW. For non-residential customers, the fee will be $500.
If a larger system impact study is required for the application, Joyce said a refundable $5,000 charge will also be issued.
“If we don’t spend that then we can refund that to the customer,” Joyce said. “If the impact study leads to a system facilities study, then that would be even more, and it would work the same way. We would require some down and whatever we didn’t spend would be refunded to the customer.”
However, these larger costs would only apply to systems around 250 kW and up, Joyce said. He added that any cost for upgrades required on the city’s side of the electric grid to accommodate the DER would be charged to the customer.
The city will be placing a cap on projects once they reach five percent of the system’s peak load, he added.
“Our peak load in 2020 was 34.53 (MW) for the summer peak. That’s a little low. Even in the winter, we are around 38 or 39 MW,” Joyce said. “Five percent of that would be 1,726 kW. That would be about 170 10 kW rooftop installations.”
If the city receives more commercial customers, Joyce said the cap would be reached quicker due to the higher capacity of those systems.
“At that point, once we hit the five percent, we would really have to look at our system, our power costs and see how that may affect both of those,” Joyce said. “We would have to make a decision at that point on whether or not to raise that cap.”
In other matters, city council:
*Read a proclamation recognizing National Police Week 2021 and Peace Officers Memorial Day.
*Read a proclamation recognizing the week of May 2 through May 8, 2021 as National Correctional Officers and Employees Week in the City of Martinsville.
*Read a proclamation acknowledging May 2021 as Building Safety Month.
*Read a proclamation recognizing Friday April 30, 2021 as National Arbor Day.
*Adopted a resolution committing the city to certain efforts related to the Alliance for National and Community Resilience (ANCR) benchmarking process.
*Heard a summary of the city’s quarterly financial report for the period ending March 31, 2021.
*Set a public hearing for June 8 on a proposed increase in assessed real estate values that exceeds more than one percent of the most recent previous assessment.
