PV buydown policy request [RE-wrenches]

[Randy Brooks]

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Wrenches,

Below is a synopsis of the ground breaking Chelan County PUD (WA) 
Sustainable Natural Alternative Power (SNAP) program.  This program 
pays up to $1.50/kWh for solar, wind, or micro-hydro production.  
Chelan County PUD is "franchising" the program free to anyone who 
adheres to the programs principles.  Anyone interested can contact Jim 
White at 509-667-4216, jamesa at chelanpud.org.

The program is particularly attractive because it encourages RE system 
installation locally, as opposed to buying green tags from a far away 
wind farm.

There are a couple fundamental problems with this program though.  1) 
Producers must fund installation of the RE system.  Even though, as I 
understand it, the utility has legal authority to provide low interest 
loans for RE systems, as they do for conservation retrofits, they have 
chosen not to.  As Matt T pointed out, initial capital outlay is a 
major hurdle for the system owner.  Local banks have been helpful in 
providing funding, given adequate collateral.  2)  Rate of return 
depends on the number of contributors to the program, and the amount of 
RE produced.   Producers earned $1.50/kWh in 2002, $1.19/kWh in 2003, 
and it looks like we'll earn $.71/kWh in 2004. While this is 
outstanding, there is no guaranteed "bottom end" for the rate of 
return/kWh.  This increases the financial risk.  If the utility 
guaranteed a minimum amount, investors could plan accordingly.

I'll be discussing both of these issues with my PUD commissioners. :)

take care,

Randy Brooks
Brooks Solar, Inc.
Solar Power for People
140 Columbia View
Chelan, WA  98816
509-682-9646
info at BrooksSolar.com
www.BrooksSolar.com


A synopsis of the Chelan County PUD Sustainable Natural Alternative 
Power (SNAP) program

The SNAP program has two parts, purchasers and producers.

Purchasers are Chelan County Public Utility District (PUD) customers 
who contribute an additional $2.50 or more each billing cycle to 
support and promote renewable energy (solar, wind, and micro-hydro) 
production within Chelan County.  Purchasers are in affect, buying the 
renewable energy generated by the producers.  This money goes into a 
fund that is used to pay producers a premium for the renewable energy 
they supply to the Chelan County PUD power grid.  100% of the funds 
contributed are used for this purpose within Chelan County.

Producers are Chelan County PUD customers who install a renewable 
energy system that is connected to the Chelan County PUD power grid.  
The renewable energy system includes a UL listed inverter and must be 
properly permitted and inspected before being connected to the grid.  
Unlike net metering, all of the power produced is fed into the power 
grid.  A power production meter, separate from the resident's 
consumption meter, measures 100% of the power produced.  The PUD meter 
reader reads both meters as part of their normal meter route.

	Costs to become a producer include the cost of the renewable energy 
system, a one-time $100 meter connection fee, and a $3.65 basic meter 
fee each month.
	
	Producers are paid:
	- 75% of Chelan County PUD's average wholesale rate for power (Dow 
Jones Mid-Columbia Firm Index for Light Load Hour (LLH)), plus
	- A pro rata share of the purchaser fund, up to a maximum of $1.50 per 
kilowatt hour (kWh.)  Money remaining in the fund is held to pay for 
future renewable energy production.  A pro rata share means that if you 
generate 5% of the total renewable power, you get 5% of the total 
contributions, up to a maximum of $1.50 per kWh.  Since we purchase PUD 
power for $.028 per kWh, this is a tremendous payback over a "net 
metered" system (where renewable energy is fed through the customers 
consumption meter and turns the meter backward, resulting in $.028 per 
kWh payback.)

	To reduce administrative costs, producers are paid annually in April.

This innovative program is "cutting edge" energy policy on a national 
scale.  It not only gives Chelan County residents the opportunity to 
show their support for renewable energy, but also greatly encourages 
the installation of renewable energy systems and moves Chelan County 
toward a more diverse, distributed, and sustainable power generation 
system.  For a detailed information packet, contact Chelan County PUD 
Energy Services Dept: 509-667-4205
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