Sept. 28, 2006 — With the growing interest in consumer-generated power, WAPA Executive Director Alberto Bruno-Vega on Thursday gave a company of journalists assembled in the WAPA conference room an overview of net metering and how the authority plans to monitor the surpluses generated by businesses or individuals who produce wind or solar energy.
Under the concept of net metering, a system owner receives retail credit for at least a portion of the electricity they create.
"We are in a new realm," Bruno-Vega said, referring to businesses and individuals creating their own renewable energy through solar or wind power generation and who either require WAPA to supplement their power or have excess power to sell back to the authority.
Bruno-Vega said Thursday's information session, which also included staff and governing board members, was in response to a recent letter to the editor published in a local newspaper that criticized the authority for not having a method to receive excess power produced through privately generated electricity.
The problem, according to Bruno-Vega, is that there are no provisions in place for net metering, which regulates the price paid for surplus power or for additional power provided to the power-producing consumer. The Public Services Commission has to act on that, he said.
On the other side of the island, a company new to St. Croix — offering wind as an energy option — has a different take on the subject, arguing that provisions are already in place and that net metering is long overdue.
Bill Fennelly and David M. Wright are partners in Mariah Energy Systems, a new V.I. company specializing in wind turbine-generated energy. Their goal is to bring inexpensive power to the Caribbean. Wright points to an Interstate Renewable Energy Council report stating more than 30 U.S. states have provisions in place for net metering. According to the report, most states either purchase excess generation at the "average monthly market price" or give credits "at retail rate to customers' next bill."
Fennelly and Wright said federal provisions regarding net metering have been in place since 2005 and that states and territories have been given three years to conform to the policies of the Public Utilities Regulatory Policy Act (PURPA), which allows utility customers to use the electricity they generate to supply their own lights and appliances, offsetting electricity they would otherwise have to purchase from the utility at the retail price.
In the event the customer produces any excess electricity and net metering is not allowed, PURPA requires the utility to purchase that excess electricity at the wholesale or "avoided cost" price, which is lower than the retail price.
According to Bruno-Vega, electric customers are charged 30 cents per kilowatt-hour (kwh), and the buy-back or "avoided" price for excess electricity produced by consumers is 20 cents/kwh. The difference in the two prices is attributed to the substantial overhead costs paid by the utility for maintenance, personnel and capital costs.
However, Bruno-Vega maintains that the 10-cent difference doesn't offset the true costs incurred by WAPA and that, in the long run, having to buy back power at 20 cents/kwh could adversely affect the majority of WAPA ratepayers. "Who pays for all of this?" Bruno-Vega asked. "That is the issue for WAPA."
Bruno-Vega said the "crux of the matter" is that the average consumer cannot afford to install privately owned wind or solar energy generation at a cost of $25,000 to $35,000.
Conversely, Fennelly and Wright maintain that wind power is a practical, cost-effective alternative that could solve a lot of the islands' economic problems. According to Fennelly, companies considering relocating to the territory "back away" when they see the utility costs. He also argues that existing businesses, such as resorts and supermarkets, could avoid large utility bill by converting to wind power. "A wind farm would reduce the cost of electricity to 11 cents per kilowatt hour," he said.
Fennelly suggested the government subsidize wind power for the territory's hospitals and "give them credit" for the overages, which would pay for the cost of construction and their current overdue bills.
You can't stop progress," Fennelly said.
Even with some businesses and homes possibly being powered by alternative energy sources, Bruno-Vega said the average WAPA consumer would not see a reduction in their power rates. "The price would be the same," he said. Regarding net metering and the issues it would raise in the territory, Bruno-Vega said, "We have to reach a compromise."
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