2.3. ERMUSR 07/09/2019 Elk River ,—
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
ERMU Commission Tom Sagstetter—Conservation and Key Accounts Manager
MEETING DATE: AGENDA ITEM NUMBER:
July 9, 2019 2.3
SUBJECT:
Minnesota Municipal Power Agency Distributed Generation Tariff
ACTION REQUESTED:
Receive the Minnesota Municipal Power Agency Distributed Generation Tariff
BACKGROUND:
On May 14, 2019, the Elk River Municipal Utilities (ERMU) Commission adopted the Distributed
Energy Resources and Net Metering Policy, Rules, and Tariff that were developed by the
Minnesota Public Utilities Commission (MPUC) and other stakeholders including Minnesota
Municipal Power Agency(MMPA), and Minnesota Municipal Utilities Association (MMUA).
DISCUSSION:
Included in the adopted policy, rules, and tariff are specific rates that are applicable to the
distributed energy resources (DERs)that may be installed on the ERMU distribution system. For
a DER system less than 40 kW, ERMU may offer the customer the approved Average Retail
Utility Energy Rate (Schedule 1). In cases where the DER system exceeds 40 kW the customer
will contract directly with MMPA.
There are two power purchase rate options for DER systems with a generation capacity greater
than 40 kW.The rate options are needed because the contractual wholesale power
arrangements between MMPA and ERMU do not allow for a MMPA member to purchase
energy directly from another entity. MMPA offers DER systems in excess of 40 kW the option of
receiving payment under the Distributed Generation Payment Rates (Schedule 4), which the
ERMU Commission has already approved, or the MMPA Distributed Generation Tariff.
Attached is the MMPA Distributed Generation Tariff to be received.
FINANCIAL IMPACT:
None
ATTACHMENT:
• MMPA Distributed Generation Tariff
Page 1 of 1
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Minnesota Municipal Power Agency
Distributed Generation Tariff
The long term contractual arrangements between the Minnesota Municipal Power
Agency(MMPA) and its members do not allow for a member to purchase directly from
another entity. Therefore, MMPA is offering to purchase the output of generation offered
for sale by a member's customer("Customer"). MMPA has adopted rates,terms, and
conditions of this tariff("Tariff') as a means of making such purchases from the
Customer.
Availability
Available to Customers who (i)have a generator that is interconnected to an MMPA
member's distribution system ("Distributed Generation" or"DG"), (ii)have such
generator with a nameplate capacity of at least 40 kW but no more than 10 MW, (iii)
offer to sell their output on a short term and (iv)meet the qualifications set forth below.
Qualifications
1. The DG facility must be fueled by natural gas (or another similarly clean fuel) or
be a renewable energy resource as defined under state regulation.
2. The DG facility must be a generator that is able to put power onto the member's
grid at any time—not just when a service interruption occurs—and in phase with
the electricity distributed by the member.
3. The DG facility must be an operable, permanently installed generator that is
owned and operated by the customer receiving retail electric service from the
member at the same site.
4. The DG facility output must be separate and distinct from the retail customer
load. No net billing will be provided.
Interconnection and Metering
A Customer seeking to connect its DG facility to the member's distribution system must
follow the "State of Minnesota Interconnection Process for Distributed Generation
Systems."All costs of the interconnection, including those incurred by the member and
MMPA, shall be borne by the Customer.
A Customer shall have metering of the generator output at the point of interconnection
with the member distribution system. Such metering must meet the meter requirements of
MMPA and the Midwest Independent System Operator("MISO"). Metering data must be
accessible by MMPA. The costs of metering and all communication devices, including
user fees, shall be borne by the Customer.
The MMPA members will maintain a copy of these procedures at their websites.
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Must-Buy
MMPA shall purchase all the DG facility output offered for sale by the Customer.
Contract
The Customer will be required to enter into a contract with MMPA. The form of contract
is provided as Attachment A hereto.
Contract Term
The contract term shall start on the first of the month following acceptance of the DG
facility's registration in MISO. The contract term shall end on the date that registration in
MISO is no longer effective, but such end date shall be no greater than one year after the
start date of the Contract Term. If the Customer desires a contract term greater than one
year,the Customer and MMPA will negotiate an individual contract which is outside of
the rates, terms and conditions of this Tariff.
Payments
Payments to the Customer for generation output shall be as described below and on
Attachment B hereto.
Energy Delivery Schedule
The Customer will be required to submit an energy delivery schedule for the DG facility
to MMPA by 8:00 a.m. prevailing time each business day. The schedule is to be for a
consecutive 7-day period, starting at midnight on the day of schedule notification.
MMPA will factor such schedule into its demand forecast and energy demand bid to the
MISO.
Outages
The Customer will provide to MMPA an annual planned outage schedule by September
30 of each year. The Customer will notify MMPA of any unplanned outage within 5
minutes of being completely off-line.
Standby Service
The Customer is not required to buy standby power to meet the station service
requirements of the DG facility when off-line. However, if standby power is not
purchased, it may not be available. Any standby service the Customer elects to take must
be at the member's current rate for standby service. Such service will be contracted
directly with the applicable MMPA member.
Changes to Rates,Terms and Conditions
This Tariff is dependent on the provisions of the MISO tariff and the Resource Adequacy
Business Practices Manual (together,the"MISO Rules")concerning Load Modifying
Resources. Any changes thereto will automatically carry forward to this Tariff and shall
become effective on the date of effectiveness of such changes under the MISO tariff.
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ATTACHMENT A
This agreement("Service Agreement") is made by and between Minnesota Municipal
Power Agency("MMPA" or"Buyer"), ( or"Member") and
( or"Customer") and is effective as of the date of the
signatures below(each individually a"party", together, the "parties").
WHEREAS Buyer has a Distributed Generation Tariff("Tariff')under which it may
purchase products from a generator facility connected at the distribution voltage level on
the Member system; and
WHEREAS Customer owns and operates a generator facility connected to the
distribution voltage level of the Member system ("DG facility"); and
WHEREAS Customer wishes to sell the output of the DG facility to MMPA under the
rates,terms and conditions of the Tariff.
NOW THEREFORE,the parties covenant and agree to the following:
1. The DG facility information shown on the attached Exhibit 1 is accurate
as of the date below.
2. The DG facility meets all of the requirements of the Tariff.
3. Customer will sell the output of the DG facility in accordance with the
provisions of the Tariff.
4. Buyer will purchase the output of the DG facility from Customer and
make payments to Customer in accordance with the provisions of the
Tariff.
5. Buyer and Member have determined that Customer is entitled to Credits
in the form of additional payments to Customer as follows:
6. Any disputes will be resolved by the senior representatives of the parties.
7. Other:
IN WITNESS WHEREOF,the parties have executed this Service Agreement through
their duly authorized officers as of the date set forth below.
MMPA
Name, Title and Date
Member
Name, Title and Date
Customer
Name, Title and Date
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EXHIBIT 1
to
Service Agreement
Name of Facility:
Location:
Name Plate Rating:
Type of Facility:
Fuel Source:
Interconnection Point:
Meter Number and Location:
Accreditation Test date:
24 Hour Contact for DG Facility:
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ATTACHMENT B
MMPA will make payments to the Customer for Zonal Resource Credits and Energy.
MMPA may reduce payments to the Customer or render charges to the Customer for
failure to deliver energy when called upon by MISO.
"Credits" in the form of additional payments may be provided to the Customer in
recognition of any benefits the DG facility provides to the MMPA member distribution
system or to MMPA.
Payments by MMPA to a Customer will be net of the above and made within thirty(30)
days after the end of the month in which service was provided to MMPA.
Zonal Resource Credits
The DG facility may receive recognition for the capacity it may provide to the
MISO system. That recognition is now known as a Zonal Resource Credit(ZRC,
as defined in the MISO rules) and is determined by the facility's Unforced
Capacity(UCAP, as defined in the MISO rules). The UCAP methodology is
implemented to address the fact that not all DG facilities contribute equally to
reliability and will differ according to the resource characteristics of the DG
facility(intermittency, fuel type, etc.).
The UCAP used to determine ZRCs for the DG facility will be based on the
application of then effective MISO rules and the test results for the facility.
In order to maintain one's ZRC benefit, the DG facility must be:
• Claimed only by MMPA,
• Greater or equal to 100kW
• Schedulable by MISO or the Local Balancing Authority (LBA, as defined
in the MISO rules)within 12 hours' notice,
• Able to respond to MISO calls for energy dispatch at least 5 times as
specified by MISO rules for emergency event purposes, and
• Able to sustain energy production for a minimum of 4 consecutive hours.
Additional qualification requirements may apply to the DG facility as listed in the
MISO rules. The DG facility must be reviewed for accreditation as a Load
Modifying Resource on an annual basis.
MMPA shall pay the Customer each month an amount equal to the product of:
(ii) the ZRC quantity of the generator facility as qualified by MISO for
such month, and
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(iii) the value of a ZRC as determined by the MISO Planning Resource
Auction (PRA, as defined in the MISO rules) for such month.
In the event that MISO calls upon the DG facility to deliver energy to the
distribution system during a MISO emergency, and the DG facility does not
respond timely,then MMPA may impose a penalty on the Customer equal to the
sum of the penalties for each failure hour during the month, determined by the
product of:
(i) the amount of energy not delivered during such hour,
(ii) the Real Time (RT), Ex Post Locational Marginal Price (LMP) for
the DG facility location as determined by MISO for such hour, and
(iii) 1.15,to recognize costs such as MISO Revenue Sufficiency
Guarantee (RSG), MISO and MMPA administration costs, etc.
MMPA has the right to terminate any Service Agreement under this Tariff if
Customer fails to produce requested energy when called upon by MISO more than
once in a calendar year.
Energy
MMPA shall pay the Customer each month an amount equal to the sum of the
payments for each delivery hour during the month, determined by the product of:
(i) the amount of energy delivered by the metered DG facility at the
point of interconnection for such hour,
(ii) The RT, LMP for the DG facility location as determined by MISO,
and
(iii) 0.85 to account for RSG costs, MISO and MMPA administration
costs, etc.
Credits
The following credits in the form of additional payments may apply:
(i) Distribution Credits—a Customer may receive a credit equal the
member's avoided distribution costs resulting from the installation
of the DG facility, as determined by the member.
(ii) Line Loss Credits—a Customer may request the member to
provide a specific line loss study and receive line loss credits if the
study supports such credits in the member's sole opinion. The
Customer is responsible for the cost of the study regardless of the
study's outcome.
(iii) Renewable Energy Credit—a Customer may receive this credit if it
is a renewable energy resource as defined under state regulations.
The credit will vary based on DG facility output and market prices
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(as determined by an independent party) and account for
administrative costs incurred by MMPA in getting the DG facility
recognized in the Midwest Renewable Energy Tracking System.
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