DISTRIBUTED GENERATION FAQS
(Service Application and Contract at bottom of page)
Q) What is Distributed Generation?
A) Distributed generation is any small generation that’s “distributed” closer to the member. Our historical model of generation has been centralized large generation stations, which is then transmitted to substations, then distributed to the home. The new model of distributed generation is many small generation stations distributed throughout the system. This can be any type of small generation, but it typically refers to member-owned solar or wind generation.
Q) How do we meter these locations?
A) We use a single meter that has two registers, so that the customer has to make no changes to his metering because of our requirements. One register only records “forward” usage, or energy provided by the utility and consumed by the member. The other register only records “reverse” usage, or the excess energy generated by the customer but returned unused to the grid. Because of how the systems are connected, we do not see generation created and used by the customer. We record the energy (kilowatt-hours) on these registers in real-time, and report the data back to our office in hourly increments.
Q) What do we pay members for energy they sell to us, and how do we decide how much we pay?
A) We pay members for the avoided cost of energy. When we calculate the cost of electricity to our members, there are three components:
1. The Facility Charge covers most of the fixed costs of operation and is a flat fee per month.
2. The Distribution Charge covers the rest of the fixed costs and the variable costs for poles, wires, and maintenance and is part of the kilowatt-hour charge.
3. The Power Cost is the average cost of energy from our power supplier and represents the largest part of the kilowatt-hour charge.
Since we still have to provide all the services covered in the Facility and Distribution charges, we don’t pay customers that portion of the bill. In general terms, this means we pay back the Power Cost portion of the retail price (12.5 cents during peak months, 11.5 cents during off-peak months) minus 3.289 cents.
Q) What are the steps to get a system connected?
A) Step 1 – Completing the application
The completed application will provide basic information about your system to ensure that it will interconnect with our system and not cause issues for any other members. The standard application handles any rotating machines (generators, windmills, etc), while we have a simplified application for photovoltaic (solar) installations.
Step 2 –Signing the contract
Since UDWI is entering into an agreement to purchase power from the member and use its distribution system to deliver it, responsibilities must be assigned. Once that is done, and the system is installed, our metering foreman will come to the site and perform some basic tests to ensure the system interconnects properly to our grid. When the system passes, he replaces the old meter with a dual-register meter, and forwards the request to the billing department. The billing department then moves the customer to the Distributed Generation rate, allowing us to pay the member back for any excess generation.
Q) What are the system requirements?
A) The system must comply with all applicable OSHA, ANSI, IEEE, state, local, and cooperative rules. These rules include, but are not limited to:
System Size: The system must be less than under 50kW, and sized to offset all or part of the member’s usage. Since we have an agreement to purchase all of our power needs through Hoosier Energy, the system cannot be sized with the intent of selling electricity.
System Limitations: Our supplier will only allow us to interconnect up to 1% of our system peak on a first come, first serve basis.
Voltage: The system must sync up with the distribution system voltage in terms of voltage level, frequency, and phasing. The system must not cause voltage or power quality problems for other members.
Interconnection: The system must automatically and immediately disconnect from the distribution system upon detecting a loss of incoming voltage (ie, an outage). This prevents the system from feeding back on to a dead line, potentially causing damage or injury.
Disconnect: In order to meet OSHA rules, the system must have a visual disconnect that is lockable, and accessible at all times by our linemen.
Q) How much does rooftop solar cost / how much does it generate?
A) The cost per watt of a residential solar system is typically around $3500 to $5000 per kilowatt depending on the size and technology of the system, but you should always check with an installer to get updated quotes before making decisions. Federal incentives are available to cover some of those costs, and the Renewable Energy Credits from the system can be sold to provide additional income. For a typical system, every 1 kilowatt of solar panels will generate about 1,200 kilowatt-hours per year.