Heidi Zemach for SCN-
The Seward City Council tabled an ordinance , finally allowing residents or businesses to interconnect small renewable energy sources to the city’s electrical distribution system at its meeting Tuesday, May 27th. The alternative power sources are ones fueled by renewable resources such as wind, solar, geothermal, biomass or water (tidal or hydropower) energy, but not by fossil fuels.
Under the long-awaited proposed ordinance, customers can only interconnect small alternative energy power sources that provide a nameplate capacity of 25 kilowatts or less. That’s about enough electricity to power the needs of one house, plus two or three of neighbor’s houses. Under the ordinance, the city would allow only one alternative energy interconnection per distribution transformer in order to maintain the existing system’s power quality and reliability. Consumers also must meet a number of other criteria to assure the city that their systems don’t interfere with the grid’s electric service for others, including that their systems meet all required power quality standards, and don’t generate abnormal voltages or voltage fluctuations. They also must have easy-to-use, manual shut off valves outside the building that can be operated by city electric employees.
If the city electric department should reject an application for interconnection, customers can appeal the denial to the Seward Planning & Zoning Commission, but the commission may only address appeals denied interconnection based on zoning concerns, or when it is alleged that there is an error in a requirement, decision or determination made by an administrative official in the enforcement of the city’s building code requirements. The problem with the ordinance, according to alternative energy expert Mike Insalaco, is that the city department still can deny a proposed interconnect of a system for perceived engineering concerns, but the customer can’t appeal that denial to P&Z for either technical or engineering reasons. Insalaco, who spoke at the hearing under Citizen’s Comments. He, and Council Member Christy Terry argued it would be a better idea to allow expert engineers to have a say in the decision-making process, at least during the appeals process, as the electric department staff are not engineers with expertise in this area.
The council will consider an amended version of the ordinance at the June 9th meeting.
Meanwhile, the council moved forward and adopted a related resolution modifying the electric tariff to allow customers to receive compensation for producing their own alternative electricity under a system known as net-metering.
Net-metering allows those who produce power and tie into the local distribution grid to receive a certain creditor compensation for the excess power they produce. The utility meters effectively spin backwards, lowering the customer’s own power consumption, and may ultimately feed excess electricity back into the system. Under the new net-metering system, customers will only be compensated for the “non-firm avoided cost rate,” which is the wholesale rate that Chugach charges the city for power, and not for any of the added costs that the electric department generally charges its consumers. Thus, while Seward customers currently pay the city 19 cents per Kwh (kilowatt hour) of alternative energy power that they generate for the grid, the city will reimburse their net-meter producers an estimated 4-5 cents, or about a quarter of the normal price. In doing so, the city chose to mimic the net- metering that the Regulatory Commission of Alaska (RCA) had established, although not actually regulated by them.
Net metering has been discussed at the city council level after Theresa and Dennis Butts installed a new $12,000 Skystream wind turbine for their marine business on Old Nash Road during the winter of 2008, and asked to be allowed to hook up to the grid and begin net-metering, along with two other alternative-energy customers. But after inspecting the Butts’ hookup equipment, Seward Electric Association said it would neither be safe nor allowable.
The issue surfaced again in the winter of 2010, with the establishment of the AVTEC’s new 100 kWh demonstration wind turbine along the Seward Highway. AVTEC asked the city to be allowed to hook it into the power grid, with the aim of lowering energy costs for some of its nearby vocational buildings. As the city electric department struggled to come up with a policy to address AVTEC’s wind-turbine request, the bureaucratic process of getting these interconnect policies established for smaller residential systems moved forward at a glacial pace, and have ever since. An interconnect proposal was considered, but was ultimately rejected for being far too lengthy and complicated.
Nevertheless, at Tuesday night’s meeting, council members and Mayor Jean Bardarson voiced optimism that with the latest, simpler policy now being proposed, the city was finally moving in the right direction. They reassured the public that tabling the renewable energy ordinance did not represent a set- back.