Regulator reveals electricity plans

Businesses could soon generate their own electricity with the Office of the Regulator exploring a policy designed to encourage private investment in renewable energy.

According to Regulator, Donnie de Freitas, options that are being explored to achieve this include Net Metering and use of double meters. Samoa’s proposed policy is still under discussion.

“It’s important to note that the Regulator has issued no policy, determination, or Order on net metering,” Mr. Defreitas said.

“The Regulator has made no determination on the price, quantity, rules or limits of any net metering program for Samoa. Rules for Net Metering are being developed.”

E.P.C. (Electric Power Corporation) has proposed to some companies to have all electricity generated sold to the grid, he said. Businesses would receive credit for the amount sold generally at a rate less than the cost of E.P.C. generating the same electricity using fuel.

“This would then be netted off against the electricity the customer would then receive for its consumption from the grid.

“This option requires two meters - one measuring the electricity being fed into E.P.C. grid, the other meter measuring the electricity being received by the customer from E.P.C.”

He again emphasised that such systems were still in the concept phase.

“The Regulator would consider all possible options including the two above but no policy, determination or Order has been made in this respect of this issue.”

He said in the interim, the Regulator accepts E.P.C. plans to consider two test cases using a two metering system, one of them being a local Church, the other a diplomatic mission.

“(The Church) is working with a third party who have a generation licence issued by the Office of the Regulator,” Mr Defreitas said.

“The proposed arrangement is that all electricity generated from (the Church) solar panels will be sold to E.P.C. at a feed in tariff which will be agreed to by both parties and subsequently approved by the Regulator.”

The Regulator said he understands that negotiations are ongoing between E.P.C. and the Church on this matter.

“In the future, the Regulator anticipates that the price paid for renewable generation from customers should never exceed the cost to E.P.C. for generating the same electricity using fuel.

“The intention is to ensure that other utility customers do not subsidise private renewable energy generators.

“The Regulator waits the outcome of these ongoing negotiations and will use them in finalising a position in this area.”

Mr Defreitas said before the E.P.C. could broaden the scope of its test cases the Regulator would first require the Corporation to file net metering standards for his consideration.

“Feedback from the pilot projects will assist E.P.C. in their submission on standards,” he said.

“At present, arrangements can be made between the Electric Power Corporation and its customers.

“A customer does not require regulatory approval for installation of renewable devices like solar panels; the issue is for the sale of excess power to E.P.C.

“The price paid by E.P.C. for the renewable generation is set by the Regulator.” In regards to legislation the Regulator said there are two types of licences under the Electricity Act. One is for Network and Services.

The other for Generation. “The legal implications for sale of electricity by persons other than Independent Power Producers, is an issue under consideration by the Office of the Regulator.

“This matter would be elaborated further in future determinations and possible Orders or Rules.

“The Regulator is seeking to develop and improve the regulatory framework rather than use loopholes.

“If there is need to change the regulatory framework to facilitate the sustainable development of the sector, the Regulator will then work with stakeholders to effect any necessary changes.”

Mr Defritas said in the future, the Regulator will require E.P.C. to demonstrate that renewable generation from customers is needed, and that renewable energy actually replaces diesel fuel used for traditional generation.

“If it is not actually useable by the utility, the Regulator does not want other customers to pay for it,” he said.

“There is a limit to the quantity of electricity that the E.P.C. system can receive from any one generation source, because this electricity is not stored, it must be used as soon as it is generated.

“In the case of Photo-Voltaic (P.V.) systems without storage there is a grid limitation of 20 per cent of noon peak demand. “The Regulator intends to work with E.P.C. to determine the appropriate limit for any net metering generation.

“The Regulator will also work with E.P.C. to determine the interoperability of the E.P.C. grid system. “It is essential that customer generated electricity meet standards for maintaining the viability of our distribution system.

“Other island states that have introduced net metering have found that the success of the programs depends on: sufficient un-met demand growth; appropriate pricing; adequate upward limits on the scope of the program; safety, reliability; and annual review of the results.

The Regulator said he would be in a better position to indicate a public timeframe for any implementation when the current review of the regulatory framework is completed in May 2014.

The United States Federal Energy Regulatory Commission defines the term ‘net metering service’ as a service to an electric consumer under which electric energy generated by that electric consumer from an eligible on-site generating facility and delivered to the local distribution facilities.

“(It) may be used to offset electric energy provided by the electric utility to the electric consumer during the applicable billing period,” the F.E.R.C. says.