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Towns seek assurance they can cash in on wind

To municipal wind power advocates, net metering is the Holy Grail. ...Net metering provisions virtually double what municipalities are currently paid for the power they generate through renewable energy. It also allowed the towns to get credits at the wholesale rate for their power ...But some Cape municipal and county officials are worried that wind turbines that are still in the planning stages will not get the benefits of net metering because of a cap the state Legislature imposed on the total amount of power that could be generated under the program.

When the state Legislature passed the Green Communities Act last year to boost municipal participation in renewable energy, one of the key provisions was net metering.

To municipal wind power advocates, net metering is the Holy Grail. Before the Green Communities Act, most of the electricity produced had to be used on the same site where it was generated. Also, only a small portion of the excess power could be sold back to the utility, at a relatively low value determined by the volatile daily market price.

Net metering provisions virtually double what municipalities are currently paid for the power they generate through renewable energy. It also allowed the towns to get credits at the wholesale rate for their power, and to list other town departments, or even private homes, as recipients of those credits to pay for their electricity. Municipal wind turbines no longer had to be located next to a big consumer, like a wastewater treatment plant, and could also be larger and capable of producing far more than the town's actual needs, potentially generating much-needed income.

But some Cape municipal and county officials are worried that wind turbines that are still in the... more [truncated due to possible copyright]  

When the state Legislature passed the Green Communities Act last year to boost municipal participation in renewable energy, one of the key provisions was net metering.

To municipal wind power advocates, net metering is the Holy Grail. Before the Green Communities Act, most of the electricity produced had to be used on the same site where it was generated. Also, only a small portion of the excess power could be sold back to the utility, at a relatively low value determined by the volatile daily market price.

Net metering provisions virtually double what municipalities are currently paid for the power they generate through renewable energy. It also allowed the towns to get credits at the wholesale rate for their power, and to list other town departments, or even private homes, as recipients of those credits to pay for their electricity. Municipal wind turbines no longer had to be located next to a big consumer, like a wastewater treatment plant, and could also be larger and capable of producing far more than the town's actual needs, potentially generating much-needed income.

But some Cape municipal and county officials are worried that wind turbines that are still in the planning stages will not get the benefits of net metering because of a cap the state Legislature imposed on the total amount of power that could be generated under the program.

Under the Green Communities Act, utilities can stop participating in the net metering program once they have reached their cap, which is defined as one percent of their historic maximum capacity. In NStar's case that ceiling is a little under 50 megawatts of renewable energy from solar and wind projects. NStar already has 26 megawatts of power from renewables either on line, or in the pipeline, said spokesman Michael Durand.

But with only 9.1 megawatts of wind energy actually online statewide, and many other projects still in the planning phase, state energy officials insist there is plenty of room for new renewable energy projects before that cap is reached. They predict there will be 30 megawatts of wind power statewide by the end of next year, out of a total state cap of more than 140 megawatts.

"Towns should continue to pursue clean energy options without any reason to be discouraged whatsoever," Executive Office of Energy and Environmental Affairs Secretary Ian Bowles said in an e-mail Oct. 23. "There is no reason for any party to believe this is a real problem in the next several years - indeed, it would be a very positive sign if we were to approach the net metering cap in the next few years since that would represent a very robust build-out of wind and solar in a short time period."

State officials pointed out that the Legislature could adjust the cap in the future, if needed.

Although state energy officials believe there is still plenty of room and time to get projects completed, risk is a hard thing to sell to taxpayers these days. With each turbine costing $4 million or more, and requiring multiple town meetings to gain approval, and several years to permit and install, some towns worry the cap could be exhausted before they finish building, dramatically altering the financial scenario they laid out for voters.


In Falmouth, for example, it took seven years to reach the point where the town saw the Cape's first municipal wind turbine, which was installed last week. The town is considering a second turbine, but doesn't know whether it will go up in time to qualify for net metering.

"It's the $4.5 million question," said Megan Amsler, co-chair of the Falmouth energy committee.

A year of wind test data had already told Wellfleet energy committee members they were sitting on a mother lode of wind power. They hoped to put up three turbines on a windy bluff facing the Atlantic that would have generated $600,000 to $900,000 in revenues annually, after expenses. It was badly needed money to replace revenues lost to state budget cuts and the decline in property values.

But energy committee member Geoffrey Karlson said the risk of not knowing whether they would qualify for net metering after spending $11 million on three turbines was too great.

"We felt the cap could be reached by 2012," said Karlson.

In a worst-case scenario, if Wellfleet went ahead with its plan for three turbines, and NStar's net metering cap was reached before they were all in place, some of the turbines would not be eligible to participate. They would be forced to sell their power at the retail rate, a price set by the spot market of demand and supply, which is very volatile.

"The spot market price now is less than half what it was a year ago," said Karlson, who still thought the project might break even at that price.

"We made the decision that one would be more safe," he said.

Officials estimate the one turbine that town meeting voters approved this past Monday will generate about $250,000 in revenue.

The Massachusetts National Guard is looking to put in as many as 17 large turbines on the base. A 1.5-megawatt turbine is already nearing completion. If all 17 of the 1.5-megawatt turbines the Air Force has proposed for the reservation go online, they would account for 27.5 megawatts of NStar's nearly 50-megawatt net metering capacity.

Municipalities asked the DPU this summer to create a waiting list to guarantee that projects would get net metering if they complied with all the requirements agreed to in the final version of the Green Communities Act. But the DPU preferred a wait-and-see approach, with a waiting list established only when it looked as if net metering capacity might be reached.

WHAT IS NET METERING?

Municipalities can now get "credits" for the power their turbine(s) generates and can transfer those credits to other municipal accounts or even to a block of private homeowners. A town no longer has to worry about locating a turbine near a big power consumer, like a school or water treatment plant. It can be sited in the best place allowed by local permitting.

Under net metering, municipal turbines get paid the wholesale rate, roughly twice their old rate, for their power.

However, each power utility, like NStar and National Grid, is only required to offer net metering benefits to a limited number of participants. This cap is set at one percent of each company's historic maximum power capacity. For NStar, that maximum amount was 5,000 megawatts and the total maximum output of all wind and solar projects cannot exceed 50 megawatts.


Source: http://www.capecodonline.co...

NOV 1 2009
http://www.windaction.org/posts/22930-towns-seek-assurance-they-can-cash-in-on-wind
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