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Here are some frequently asked questions about…

 


California Law on Surplus Electricity


 

1. What does California law say about compensating solar PV owners for excess energy they produce and send back to the grid?

"The California Solar Surplus Act of 2009" (Assembly Bill 920) provides that solar “customer-generators” in California must have the option to receive compensation for any net surplus electricity generated by their solar system on or after January 31, 2010.

2. What is “net surplus electricity”?

“Net surplus electricity” is the electricity generated by a solar PV system that exceeds the amount of electricity consumed by the customer in a given period. Net surplus electricity is measured in kilowatt-hours (kWh).

3. Who is eligible to receive compensation for net surplus electricity?

Electric utility customers who own or lease a solar PV system and sign up for compensation with their utility are eligible. For example, Pasadena Water and Power solar electric customers are eligible when they sign up for compensation using the “Net Metering and Surplus Electricity Compensation Enrollment Form.”

Customers with a fossil-fuel or other non-qualifying generation, or a combination of qualifying solar or wind and such non-qualifying resources are not eligible.

4. Who decides the compensation rate for solar customer-generators?

AB 920 provides that the governing bodies of electric utilities must establish a compensation rate by January 31, 2011. Pasadena City Council established a compensation rate for PWP solar customers on January 10, 2011.

5. How did PWP handle surplus electricity prior to AB 920 becoming a law?

Prior to AB 920, PWP reconciled the customer’s electricity consumption against electricity generated during the preceding cycle, and any net surplus electricity credits were zeroed out without compensation.

6. How does AB 920 change the way PWP handles customers’ surplus electricity?

PWP may now offer its solar customers the option to receive compensation, usually as a credit on their electric bill, for any net surplus electricity generated over a billing cycle.

 


Applying for Compensation


7. How do I sign up for compensation?

You must affirmatively elect to receive compensation on the “Net Metering and Surplus Compensation Enrollment Form” and return it to PWP.

Enrollment forms were mailed to all solar customers on January 18, 2011. If you didn’t receive one or lost the form, you can download a copy here.

8. How is this new "Net Metering and Surplus Compensation Enrollment Form" (January 2011) different from the "Compensation Request Form" I received in 2010?

When the old "Net Surplus Electricity Compensation Request Form" was mailed to solar customers in 2010, compensation rates for surplus electricity were not yet established by City Council. Furthermore, in January 2011 the Council adopted an additional monthly/bi-monthly net metering option that was not previously offered in the old form. This new Compensation Enrollment Form provides more complete information on net energy metering options and the opportunity for you to receive a higher compensation rate. It also has important information about transferring title of renewable energy credits to PWP.

9. In 2010, I submitted a different application for surplus electricity compensation. Do I need to submit the new compensation enrollment form?

No; however, you must submit the new form (“Net Metering and Surplus Compensation Enrollment Form”) if you wish to receive a higher compensation rate for monthly / bi-monthly net metering and/or get compensation for transferring title of renewable energy credits.

10.  What happens if I do NOT turn in the new "Net Metering and Surplus Electricity Compensation Enrollment Form"?

  • If you do not submit the new form, but did submit the “Compensation Request Form” in 2010, you will continue to be billed for electric service under your existing net metering agreement and receive the applicable compensation rate for any net surplus electricity. However, you will not receive compensation for renewable energy credits until PWP receives the new Compensation Enrollment Form from you.
     

  • If you submitted neither the “Compensation Request Form” in 2010 nor the new "Compensation Enrollment Form", you cannot receive compensation and you will continue to be billed for electric service under your existing net metering agreement.

11. May I decline compensation?

Yes, just mark "No" in Section 1 of the Compensation Enrollment Form.

 


Compensation Payment and Rates


12. How much can I expect to receive in compensation?

In most cases, a solar PV system generates very little to no excess electricity, as the system was designed to offset your historical electrical usage. However, PWP encourages you to elect to receive the compensation to which you are entitled by submitting the “Net Metering and Surplus Electricity Compensation Enrollment Form” in case your electrical consumption decreases or you take a long vacation.

13. Will compensation be in the form of cash or a credit on my bill?

Compensation will be applied as a credit on your electric bill to offset electrical and other non-electrical charges. You may request a cash-out of net surplus compensation, rather than receive a credit, when the value exceeds $50 or when you close your electric account.

14. How much will I be compensated for net surplus electricity?

Your compensation rate depends on which of two net metering options you are signed up for:

  • Annual Net Metering Compensation: You will be billed once a year for your electric service. If you generated more electricity than you used, you will be credited for the excess at a rate equal to PWP’s average Energy Charge rate during that year, plus 2.5¢ per kWh for applicable renewable energy credits or attrubutes, for a current total of about 11.2¢ per kWh.
     

  • Monthly / Bi-Monthly Net Metering Compensation: You will be billed for electric service on a monthly or bi-monthly billing schedule. If you generated more electricity than you used, you will be credited for the excess at a rate equal to PWP’s Energy Charge rate during that year, plus 2.5¢ per kWh for applicable renewable energy credits or attributes, plus an additional 6.6¢ per kWh, for a current total of about 17.8¢ per kWh.

 

15. How much is PWP’s current “Energy Charge”?

The Energy Charge is a line item on your electric service bill. It is currently 8.7¢ per kWh for residential customers, but it varies seasonally for commercial customers. (See electric rates ordinance here.)

16. Why is the monthly/bimonthly compensation rate higher than the annual rate?

The annual option is more costly to administer, so PWP is incentivizing the monthly / bi-monthly option with a 6.6¢ per kWh bonus. By selecting this option, you’ll see a greater cost-benefit from your solar system and help PWP hold down electric rates for everyone.

17. Will the compensation rate change?

The net surplus electricity compensation rate will change over time as changes are made to PWP electric service rates. Changes may occur due to Power Cost Adjustments (PCA), seasonal variations on electric schedules (applies to commercial customers only), and electric service rate changes approved by City Council.

 


Net Metering Options


18. What is "net metering?"

“Net Metering” is a method for calculating how much electricity is consumed versus how much is generated by a solar customer, and ultimately calculates any net surplus electricity. PWP can calculate a customer’s net surplus electricity annually, monthly (for commercial customers) or bi-monthly (for residential customers.)

19. How do I select a net metering option?

Fill out the "Net Metering and Surplus Electricity Compensation Enrollment Form" and select your preferred option in Section 3 of the form.

20. Once I’ve selected a net metering option, can I change my mind?

Yes. You can change to another net metering option after a 12 month period has passed.

21. If I am a medium or large commercial customer with annual net metering, will I pay for my electric services only once per year?

No. Medium and large commercial customers are eligible for annual net metering for the purpose of calculating net surplus electricity. However, they must pay the full amount of any electric service charges on a monthly basis.

 


Retroactive Compensation


22. This is the FIRST TIME I am submitting a form to request net surplus electricity compensation, but I have had a solar system that has been operational prior to January 31, 2011.  Can I receive retroactive compensation for my system's surplus generation?

Yes. You are eligible for compensation retroactive to the first billing cycle ending after your system’s Interconnection Date, but no earlier than January 31, 2010. PWP will calculate your retroactive compensation once we receive the Compensation Enrollment Form from you.

23. I have PREVIOUSLY SUBMITTED the Compensation Request Form (2010). Will I receive retroactive compensation for my renewable energy credits?

You MUST submit the new Compensation Enrollment Form to receive retroactive compensation for your renewable energy credits. Otherwise you will receive compensation ONLY for the net surplus electricity your system generated since the date PWP received the Compensation Request Form (2010).

24. I want to switch from annual to monthly / bi-monthly net metering. Can I close my annual cycle early and get retroactive compensation?

If this is the first time you are submitting the Compensation Enrollment Form, yes. Once PWP receives the form from you with your election to switch to monthly / bi-monthly net metering, PWP will close out your annual cycle, then calculate any net surplus electricity generated between the time the annual cycle began and the close out date. You will receive any credit due (at the published annual compensation rate) on the first monthly / bi-monthly bill following your election to switch net metering options.

25. I’m currently a BI-MONTHLY customer with net surplus electricity at the end of some billing cycles prior to January 31, 2011. Will I get compensated retroactively for net surplus electricity?

Yes. You are eligible for surplus compensation retroactive to the first billing cycle ending after either 1) the date you previously submitted the Compensation Request Form (2010), or 2) your system’s Interconnection Date, but no earlier than January 31, 2010. PWP will calculate your retroactive compensation once we receive the new Compensation Enrollment Form from you.

26. I’m currently an ANNUAL customer with net surplus electricity at the end of my billing cycle ending between January 31, 2010 and January 31, 2011. Will I get compensated retroactively for that net surplus electricity?

Yes. You are eligible for surplus compensation retroactive to the first billing cycle ending after either 1) the date you previously submitted the Compensation Request Form (2010), or 2) your system’s Interconnection Date, but no earlier than January 31, 2010. PWP will calculate your retroactive compensation once we receive the new Compensation Enrollment Form from you.

 


Renewable Energy Credits (RECs)


27. What are renewable energy credits (RECs)?

When electricity is generated using an eligible renewable energy resource such as solar PV, two commodities are created. The first commodity is the electricity, and the second is the renewable energy credits, or RECs (also referred to as renewable energy certificates).

RECs function similar to currency or credit in the energy market, and PWP can use them for building its green power portfolio and meeting its ambitious renewable energy goals.

28. What is the monetary value of RECs?

Each utility places its own value on RECs, depending on its energy goals, power supply mix, current legislation and other energy market factors.

PWP currently values RECs at 2.5¢ per kWh of renewable energy generation.

29. How do I know if I own the RECs associated with my system?

Almost all solar customers who purchased their systems own the RECs unless stated in the purchase contract.

In some cases, PV lease agreements or power purchase agreements (PPAs), whereby the customer doesn't own the PV system, but pays monthly to the system provider, include terms that transfer the RECs to the system provider. Review your solar lease agreement or power purchase agreement or call your system provider to verify who owns the RECs.

30. If I elect to receive net surplus electricity compensation, can I still keep my RECs?  

No. When you elect to receive compensation, you transfer title of your RECs to PWP, for which PWP pays you 2.5¢ per kWh of surplus renewable energy generation.

31. I have a lease agreement / power purchase agreement and my solar provider owns my system's RECs. If I elect to receive net surplus electricity compensation, who will own the RECs then?

You will receive compensation for the net surplus electricity your system generates, but not for the RECs. Your solar provider will still own the RECs.

 

 


Bill Charges


32. I have elected ANNUAL net metering and the annual total of charges for Energy, Transmission, and PBC add to less than $0. Why does my annual bill show $0 for these charges?

Under net metering rules, you will not be charged for Energy, Transmission, or PBC rates if the annual sum of these charges computed for each regular billing period (each summed individually) is less than $0.  If you are a net surplus energy generator for the 12 month contract period, you will receive an after-tax credit for net surplus energy at the applicable annual net surplus compensation rate.

33. I have elected MONTHLY / BI-MONTHLY net metering and my net energy consumption is less than 0 kWh. Why does my annual bill show $0 for for the Energy, Transmission, and PBC charges?

Under monthly / bimonthly net metering rules, you will not be charged for Energy, Transmission, or PBC rates if your net energy consumption is less than 0 kWh. If you are a net surplus energy generator for the billing period, you will receive an after-tax credit for net surplus energy at the applicable monthly net surplus compensation rate.

 


COMMENTS & QUESTIONS


If you have any comments, suggestions, or questions regarding compensation for Net Surplus Electricity, please call the AnswerLine at 626-744-6970 or write to solar@cityofpasadena.net

 


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