HomeMy WebLinkAboutORD 2022-04 - Net Metering/EEECORDINANCE NO. OZ O
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
GEORGETOWN, TEXAS, AMENDING CHAPTER 13.04.018 SECTION G
RELATED TO THE CALCULATION OF THE RENEWABLE ENERGY —
RECEIVED CREDIT APPLIED TO NET ENERGY METERING
CUSTOMERS WITH A DISTRIBUTED ENERGY RESOURCE FACILITY;
REPEALING CONFLICTING ORDINANCES AND RESOLUTIONS;
PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR
PUBLICATION; AND SETTING AN EFFECTIVE DATE.
WHEREAS, the City of Georgetown periodically reviews and adjusts the net metering
service policy; and,
WHEREAS, the City Council of the City of Georgetown finds that amending the current
renewable energy received credit calculation is in the best interest of the City; and
WHEREAS, the City Council of the City of Georgetown wishes to amend these rates
effective on all utility billings after February 1, 2022;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF GEORGETOWN, TEXAS, THAT:
Section 1. The meeting at which this ordinance was approved was in all things conducted
in compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551.
Section 2. The facts and recitations contained in the preamble of this ordinance are hereby
found and declared to be true and correct and are incorporated by reference herein and expressly
made a part hereof, as if copied verbatim.
Section 3. Section 13.04.018, Section G of the Net Metering Service, of the Code of
Ordinances of the City of Georgetown is hereby modified as follows.
Sec. 13.04.018. Net Energy Metering (NEM) Service
G. Monthly Rates for NEM customers.
Rates are subject to change and as described herein.
Residential Service:
1. Base Rate: $24.80 per month
2. Volumetric Energy Charge: $0.09580 per kWh
3. Renewable Energy —the Received Credit shall be calculated on an annual basis
according to the following formula:
{Ordinance Number: 2O Z Z - 0'4
Description: Net Metering/EEEC
Date Approved: JO..rn, 6L,-Lk I 1 2021
$ Weighted Avg. Market Price (kWh) +Avg.Transmission Capacity Cost (kWh)
Credit (kWh) 1 — Losses (%)
Where "Weighted Avg. Market Price" represents the previous year's weighted average Locational
Marginal Prices coincident with solar producing hours at the Electric Reliability Council of Texas
(ERCOT) South Load zone. The periods coincident with ERCOT and/or Public Utility
Commission of Texas declared controlled outages and/or grid emergencies are not included in the
Weighted Avg. Market Price calculation. The "Avg. Transmission Capacity Cost" represents the
previous year's average transmission -cost -of -service (TCOS) charges ($/kWh) paid by the Utility
for transmission, and "Losses" represents the most recently calculated value for COG's
distribution system losses as a percent.
4. PCA: (as determined in § 13.04.075)
5. TDCA: (as determined in § 13.04.080)
Small General Service:
1. Base Rate as a COG electric customer: $50.00 per month
2. Volumetric Energy Charge: $0.0902 per kWh
3. Renewable Energy —the Received Credit shall be calculated on an annual basis
according to the following formula:
$ Weighted Avg. Market Price (kWh) + Avg. Transmission Capacity Cost (kWh)
Credit (kW_h) 1 — Losses (%)
Where "Weighted Avg. Market Price" represents the previous year's weighted average Locational
Marginal Prices coincident with solar producing hours at the Electric Reliability Council of Texas
(ERCOT) South Load zone. The periods coincident with ERCOT and/or Public Utility
Commission of Texas declared controlled outages and/or grid emergencies are not included in the
Weighted Avg. Market Price calculation. The "Avg. Transmission Capacity Cost" represents the
previous year's average transmission -cost -of -service (TCOS) charges ($/kWh) paid by the Utility
for transmission , and "Losses" represents the most recently calculated value for COG's
distribution system losses as a percent.
4. PCA: (as determined in § 13.04.075)
5. TDCA: (as determined in § 13.04.080)
Section 4. If any provision of this ordinance or application thereof to any person or
circumstance shall be held invalid, such invalidity shall not affect the other provisions, or
application thereof, of this ordinance which can be given effect without the invalid provision or
application, and to this end the provisions of this ordinance are hereby declared to be severable.
{Ordinance Number: 1 — 04
Description: Net MeteringlEEEC
Date Approved: 2021
Section 5 That all ordinances that are in conflict with the provisions of this ordinance
be, and the same are hereby, repealed and all other ordinances of the City not in conflict with the
provisions of this ordinance shall remain in full force and effect.
Section 6. The Mayor is hereby authorized to sign this ordinance and the City
Secretary to attest. This Ordinance shall become effective and be in full force and effect on
February 1, 2022 in accordance with the provisions of the Charter of the City of Georgetown.
PASSED AND APPROVED on First Reading on the day of
--�9 2021.
PASSED AND APPROVED on Second Reading on the �- day of
202f-
ATTEST:
Robyn D nsmore, City Secretary
APPROVED AS TO FORM:
Skye WWon, k ity Attorney
(Ordinance Number: ZOZZ —C)Lf
Description: Net Metering/EEEC
Date Approved: _ 1 , 2021
THE CITY OF G RGETOWN
By:
4a4r--��, Mayor No TPA
�,�t �'►'ttS
Qowerj.
Memo
Date: November 16, 2021
To: Daniel N Bethapudi, General Manager of Electric Utility, City of Georgetown
From: Shams Siddiqi, Ph.D., President, Crescent Power, Inc.
Subject: Avoided Energy Cost for Customer Renewable Energy Injection
Locational Marginal Price (LMP) is defined in the ERCOT Protocols as: "The offer
and/or bid -based marginal cost of serving the next increment of Load at an Electrical
Bus, which marginal cost is produced by the DAM [Day -Ahead Market] process or by
the SCED [Security Constrained Economic Dispatch] process."
Settlement Point Price (SPP) is defined in the ERCOT Protocols as: "A price calculated
for a Settlement Point for each Settlement Interval using LMP data and the formulas
detailed in Section 4.6, DAM Settlement, and Section 6.6, Settlement Calculations for the
Real -Time Energy Operations." Real -Time SPP for a particular Settlement Point is
calculated by adding the sum of the Real -Time On -Line Reliability Deployment Price
Adder (RDPA) and the Real -Time On -Line Reserve (Operating Reserve Demand Curve
— ORDC) Price Adder to the LMP for that Settlement Point. The RDPA reflects the price
impact of out -of -market reliability action taken by ERCOT and the ORDC price adder
reflects the scarcity of Operating Reserves on the grid. Typically, the values of these
adders are $0 except during times of supply scarcity on the grid. These adders are
intended to incent demand response and additional resource commitment in the short
term and investment in new resources in the long term.
Thus, the LMP in $/kWh at the South Load Zone reflects the marginal energy (typically
fuel and variable O&M) cost savings from resources that are turned down one kWh due
to an additional kWh of renewable energy injected into the grid by City of Georgetown's
customer. The SPP is typically equal to the LMP except during scarcity when the
difference between the two reflects scarcity of operating reserves and reliability actions
taken by ERCOT. Even LMPs during grid emergencies (Energy Emergency Alert —
EEA) may reflect scarcity and not simply the avoided marginal energy cost. Since the
renewable energy credit to the City's customers is meant to reflect the avoided marginal
energy cost savings for the system, the South Load Zone LMP, excluding periods of grid
emergencies, is an appropriate price to use to credit customers for their renewable energy
injection.
3303 San Benito Court, Austin, Texas 78738 Tel. (512) 619-3532
Memorandum
NewGen
Sty rategies
225 Union Boulevard
Suite 305
Lakewood, CO 80228
Phone: (720) 633-9514
To: Daniel N Bethapudi, General Manager — Electric Utility, City of Georgetown, Texas
From: Scott Burnham, Grant Rabon, Natalie Accardo
Date: December 10, 2021
Re: Proposed Changes to NEM Received Credit Calculation
The City of Georgetown (City) and the Georgetown Electric Utility (Utility) have retained NewGen
Strategies and Solutions, LLC (NewGen) to assist in the review and development of proposed changes to
the existing Net Energy Metering (NEM) program. The NEM changes in 2020 implemented a methodology
for a market -based value for the received energy from the NEM customer's photovoltaic system (the
Renewable Energy — Received Credit). This methodology was used to calculate the Renewable Energy —
Received Credit for 2020 and 2021. The current methodology uses Settlement Point Prices from the
wholesale energy market (the Energy Reliability Council of Texas [ERCOT]) to calculate the Renewable
Energy — Received Credit for the energy received from the NEM customers.
After further review of the methodology by NewGen and the City's wholesale power market consultant,
Crescent Power, Inc., it was evident that the Settlement Point Prices include multiple price adders. These
adders are intended to incent demand response and additional resource commitment in the short-term
during grid emergencies and controlled outages such as during Winter Storm Uri and investment in new
resources in the long term. The Locational Marginal Prices (LMPs) generated by ERCOT more accurately
represent the market cost of energy and hence more accurately reflect the true avoided costs incurred by
the City for purposes of determining the Renewable Energy — Received Credit.
Based on advice from Crescent Power, Inc., and the analysis conducted by NewGen, it is recommended
that the City utilize the Locational Marginal Pricing data from ERCOT and exclude certain periods which
ERCOT and/or the Public Utilities Commission of Texas (PUCT) identify as emergencies and/or controlled
outages for calculating the Renewable Energy — Received Credit for the NEM customers.
NewGen recommends the City revise its existing NEM Service rates to reflect the following:
1. The Renewable Energy — Received Credit should be based on the Locational Marginal Prices (LMP)
published by ERCOT for the previous year, as opposed to the settlement point prices in the current
NEM Ordinance 2020-59. The LMP prices more accurately reflect the avoided costs incurred by the
City for purposes of determining the Renewable Energy — Received Credit.
2. The Renewable Energy— Received Credit should be based on a historic Locational Marginal Prices that
excludes time periods that have been identified as emergencies and/or controlled outages by either
ERCOT or the PUCT.
The resulting draft calculation of the Renewable Energy — Received Credit is proposed to be
approximately $0.07322/kWh (kilowatt hour). The actual Renewable Energy — Received Credit for
Economics I Strategy I Stakeholders I Sustainability
www.newgenstrategies.net
Memorandum
Daniel N Bethapudi, General Manager
December 10, 2021
Page 2
2021 will change slightly depending on the ERCOT market prices coincident with solar producing hours
for the remainder of the calendar year (2021). The proposed Renewable Energy— Received Credit will
be effective for NEM customers for the calendar year 2022.
Proposed Changes to NEM Ordinance 2020-59
To effectuate the changes in policy described herein, NewGen proposes that the City amend the language
in NEM Ordinance 2020-59 as indicated below.
1. Section 13.04.018 Subpart G. Monthly Rates for NEM Customers. Replace the term "settlement
point prices" with the term "Locational Marginal Prices ($/MWh)" in the following: "Where'Weighted
Avg. Market Price' represents the previous year's weighted average Locational Marginal Prices
($/MWh (megawatt hour))..."
2. Section 13.04.018 Subpart G. Monthly Rates for NEM Customers. Append the first full paragraph to
include the following sentence: "The periods coincident with ERCOT and/or Public Utility Commission
of Texas declared controlled outages and/or grid emergencies are not included in the Weighted Avg.
Market Price calculation."
3. Note: the proposed edits are applied to both the Residential Service as well as the Small General
Service portions of Section 13.04.018 Subpart G.
Conclusion
The City should amend its NEM Rate ordinance (#2020-59) to reflect the proposed changes presented
herein to accurately reflect the value of the Renewable Energy — Received Credit at the South Load Zone
LMP and exclude periods of grid emergencies and/or controlled outages. These changes will ensure that
all citizens served by Georgetown Electric Utility benefit from its NEM program.
Georgetown NEM Rate Changes_121021_Final