Net Metering in Fredericksburg TX

Net Metering and Area Electricity Provider Policies:

Any consumer considering "going green" by installing solar panels or small wind generation systems must be familiar with the concept of "net metering" as it relates to their ability to reasonably recover the cost of the purchase, installation and operation of these sources of renewable power.

Net metering programs serve as an important incentive for consumer investment in renewable energy generation. Net metering enables customers to use their own generation to offset their consumption over a billing period by allowing their electric

meters to turn backwards when they generate electricity in excess of the their demand. This offset means that customers receive retail prices for the excess electricity they generate. Without net metering, a second meter is usually installed to measure the electricity that flows back to the provider, with the provider purchasing the power at a rate much lower than the retail rate.

Net metering is a low-cost, easily administered method of encouraging customer investment in renewable energy technologies. It increases the value of the electricity produced by renewable generation and allows customers to "bank" their energy and use it a different time than it is produced giving customers more flexibility and allowing them to maximize the value of their production. Providers may also benefit from net metering because when customers are producing electricity during peak periods, the system load factor is improved.

The three main suppliers of electricity to homes, ranches and real estate in the Fredericksburg area are: The City of Fredericksburg (FBG), Central Texas Electric Coop (CTEC) and Pedernales Electric Coop (PEC). The "green" efforts of each are described in order below as are their policies on "net metering".

The City of Fredericksburg serves the majority of the homes and properties that lie within it's corporate limits. Small exceptions exist where CTEC or PEC were the existing providers to areas subsequently annexed into the City of Fredericksburg. FBG purchases it's power at wholesale rates from the capacity generated by the Lower Colorado River Authority (LCRA) and re-distributes it to customers at a retail rate.

As of 10/15/2008, FBG does not offer any rebates or incentives for energy conservation. As stated on the City of Fredericksburg's website: "With the constantly increasing prices of natural gas during the past year, the cost to produce, purchase, and distribute electricity has also increased. The City of Fredericksburg has tried to contain price increases as much as possible and is pleased to offer its customers one of the lowest rates for electric service in the area."

Net metering is not addressed on the city's website. It should be noted and considered that local zoning and existing subdivision deed restrictions may prohibit, limit, inhibit, etc. the installation and use of renewable energy generating systems (especially wind) through limits on height restrictions, etc.

CTEC also buys its wholesale power mainly from the Lower Colorado River Authority (LCRA) and distributes it throughout the service territory on its own network of lines at retail rates. As of 10/15/2008, CTEC does not offer any rebates or incentives for energy conservation. The website for CTEC also fails to mention net metering options but their engineering department tells me that they do allow for net metering via an interconnection agreement and that they buy back excess power at the retail rate (please remember; however, to check for any local subdivision restrictions regarding wind, solar, height restrictions, etc.!).

PEC is the largest electric coop in the United States, serving an area covering approximately 8,100 square miles. PEC's size, resources and corporate mandates now provide for their "Green Works" program of incentives, rebates and the purchasing of power from renewable resources (among other "green" initiatives). PEC is the only electricity provider serving the area to speak to and provide for service interconnection and net metering.

While FBG does not speak to its obligation to provide for net metering they may be obligated under Federal law:

In August 2005, The Energy Policy Act of 2005 (EPAct) became law. The law seeks to encourage energy conservation and efficiency, to improve electric reliability, and to promote alternative sources

of energy. EPAct added five new federal standards to the Public Utility Regulatory Policy Act of 1978 (PURPA). As a nonregulated electric utilities, CTEC and FBG must consider the five new standards in light of the three purposes stated in PURPA. The PURPA purposes are to encourage conservation of energy supplied by electric utilities, to encourage optimal efficiency of electric utility facilities and resources, and to encourage equitable rates for electric consumers.

Key among these five new standards they must address are net metering, fuel sources and interconnection. Net metering and interconnection have been addressed and described already, "fuel sources" mandates that they shall consider developing a plan to minimize dependence on a single fuel source and to ensure that the electric energy it sells to consumers is generated using a diverse range of fuels and technologies, including renewable technologies. In other words, consumers should be provided a choice on the source from which the power they purchase is generated.