SMUD's Feed-In Tariff

SMUD Feed-In Tariff Workshop Dec 9, 2009 

Workshop on 

SMUD’s Feed-In Tariff 

December 9, 2009 

Welcome! 

1



Introduction - What We’ll Cover 

• Welcome/Introduction 

ti 

• Rates 

• The Process/The Rules 

• Interconnection 

• www.smud.org FIT navigation 

2



Introduction 

• SMUD’s vision is to empower our 

customers s with solutions and options that 

increase energy efficiency, protect the 

environment, reduce global warming, and 

lower the cost to serve our region. 

3



Introduction – FIT Goals 

• Support SMUD’s Strategic Directives i for 

Environmental Protection and Resource Planning 

• Bridge the gap between current DG incentive 

programs (e.g. SB-1) and our renewables RFO 

• Encourage the harvest and use of local resources 

• Published tariff and terms to facilitate project 

financing 

• Develop distributed generation within SMUD’s 

service territory 

4



Introduction – FIT Philosophy 

•Objectively value the energy provided to 

SMUD ratepayers 

– i.e. value-based tariff, not cost-based 

• Encourage broad participation 

• Open to all technologies that offer 

improved efficiencies 

• Address risks to both parties appropriately 

5



Introduction – SMUD Board’s Rate Action 

• In general rate action, SMUD’s Board approved 

Feed-In Tariff in September for Januar 1, 2010 

effective date. 

6



Introduction – Basic FIT Features 

• Applications taken first-come first-servedserved 

• Offer 10, 15, and 20 year rates published as part 

of the tariff, and updated at least annually 

• Applicants offered a standard Power Purchase 

Agreement (no negotiation of terms and 

conditions) 

7



Introduction – Impact of SB 32 

• Governor signed SB 32 October 11, 2009 

• Some slight differences on requirements 

• Requires POUs to offer Feed-In Tariff for prorata 

share of state-wide 750 MW cap 

– 33.5 MW for SMUD 

• Capacity of not more than 3 MW 

• Eligible Renewables only (not CHP) 

8



Introduction – Impact of SB 32 

• To accommodate provisions of SB 32, we intend 

to bifurcate the 100 MW into two “pools:” 

• Pool A - SB 32-specific pool 

– Pool size: 33.5 MW 

– Limited to renewables 3 MW or smaller 

• Pool B - Other FIT Applications pool 

– Pool size: 66.5 MW 

– All CHP and renewables not qualifying for SB-32 pool 

9



Introduction – Updated Rates 

Renewable FIT Rates 

• Are levelized for contract term 

• PV Production-Weighted , 20 year 

– 2010 – 13.9 ¢/kWh 

– 2011 – 14.44 ¢/kWh 

– 2012 – 14.8 ¢/kWh 

10



Introduction – Updated Rates 

CHP FIT Rates 

• Annual rates (not levelized) 

• Escalate at 2.74%/yr 

11


Workshop on 



Rates 

12



Rates – How SMUD Developed FIT 

• In accordance with the SMUD Board of Directors Resolution No 09- 

06-05, 05 the FIT prices for energy delivered to SMUD will be based on 

the following cost components: 

• Market Energy Price 

• Ancillary Services 

• Generation Capacity 

• Transmission 

• Sub Transmission Capacity 

• Avoided Greenhouse gas mitigation 

• Risk Avoidance from future natural gas price increases 

13



Rates – Model Assumptions 

• Energy costs based on market simulation model and 2010 gas price 

forecast. 

• Ancillary Services based on historical ISO costs. 

• Generation capacity costs based on CEC’s installed costs for the 

advanced simple cycle merchant plant (August 2009). Annual costs 

based on MPR cash flow model. 

• Net Capacity value based on ISO NET CT Net Revenue Methodology 

(see ISO Market Issues and Performance 2008 Annual Report) 

• GHG adder 

• Gas Adder based on gas price risk. 

• Avoided Costs are Levelized using SMUD’s nominal discount rate. 

14



Rates – Cost Components 

Cost Component 

20 Year Levelized Costs 

2010 Start year 

($/kWh) 

% of Total 

Energy $0.0678 61% 

Capacity $0.0202 18% 

GHG Adder $0.01010101 9% 

Gas Adder $0.0126 11% 

Total $0.1107 100% 

15



Rates – Time of Day Delivery Periods 

• Super Peak: 2:00 to 8:00 PM, Mon – Sat, Except Holidays 

• On Peak: 6 AM to 2 PM and 8 PM to 10 PM, Mon – Sat, Except Holidays 

• Off peak: All Other Hours 

• Holidays: New Years, Memorial Day, Independence Day, Labor Day, 

Thanksgivings and Christmas 

• Summer: June to September 

• Fall and Winter: October to February 

• Spring: March to May 

16



Rates – Time of Day Delivery Multipliers 

Time of Day Delivery Multipliers 

(2010 Start Year – 20 Year Term) 

Month Period SMUD PG&E 

Super Peak 2.92 2.01 

June to Sept On-peak .90 114 1.14 

Off-peak .84 .72 

Super Peak 1.14 1.09 

Fall/Winter On-peak .94 .96 


Super Peak .85 1.13 

Spring On-peak .81 .86 


17



Rates – MPR Comparisons 

Comparison Between SMUD Fit and CPUC MPR 

MPR for 2010 Start-Year, 20-Year Term 

SMUD CPUC MPR Difference 

(%) 

2009 FIT 0.11975 .11380* 0.00595 

5.20% 

2010 FIT 0.11066 .09674** 0.01392 

Difference -0.00909 -0.00909 

(%) -7.60% -15% 

14.40% 

* CPUC, Resolution E-4214 

**CPUC, Resolution E-4298 

18


Workshop on 



The Process/ 

The Rules 

19



Process Overview 

• Proposer (Applicant) Applies for FIT reserved position 

• SMUD reviews application for completeness (including 

application fee) 

• SMUD confirms assignment of reserved position 

• SMUD conducts interconnection review/study 

• Applicant presented with Power Purchase and Interconnection 

Agreements 

• Applicant returns executed contracts 

• Project completion tasks (including interconnection work) 

• Commercial operation under PPA 

20



Process - Application 

• Application must include: 

• FIT Application form 

• Interconnect Application 

• $1,400 Interconnection review payment 

• $20/kW FIT Reservation Deposit 

• 8:00 a.m. January 4, 2010 – start accepting applications 

• Hand delivery is recommended 

• SMUD will assign a tracking number and add Application 

to the FIT Queue posting to our website 

21



Process - Application 

• What is an Application? 

• Covers one Facility 

• One metering gpoint 

• Must identify location 

• Must specify scheduled commercial operation date 

• Cannot change location (Reserved Position locks in location) 

22



Process – SMUD Reviews Application 

• Application i must be complete, including payment of 

monies 

• Facility must comply with eligibility criteria 

• Reserved Position granted upon determination upon 

favorable finding of meeting criteria, and determination 

that there is available Reserved Position 

• Granting Reserved Position also locks in specific rate, 

based upon rate that is current at time of application. 

• Rate is based upon year of Scheduled Commercial 

Operation Date 

23



Process – SMUD Confirms Reservation 

• SMUD will send reply to Applicant to confirm Reservation 

24



Process – SMUD Conducts Interconnection Review 

• Pass interconnection info to Rule 21 process 

• Goes to Distribution Services for assessment 

• If interconnection ti is not simple, we then require System 

Impact Study 

• Process results in estimate of interconnection cost 

• Some iteration w/Applicant during this process likely 

• Time for interconnection review 

25



Process – Applicant Presented with Agreements 

• PPA and Interconnection evaluation/study results forward to 

Applicant, along with request for payment of interconnection costs. 

• Requiring Interconnection Agreement contingent upon completion of 

internal staff review/discussions 

• Applicant’s decision time. 

• Go forward – return executed PPA w/in 30 days 

– payment for estimated interconnection costs required along with 

executed PPA 

• No go – after 30 days we remove Application and release Reserved 

Position 

– Return 100% of Reservation Deposit 

26



Process – Applicant Returns Executed Agreements 

• SMUD executes agreements. 

27



Process – Project Completion 

• SMUD sets up customer project and proceeds with interconnection 

work 

• Applicant proceeds with obligations to complete Facility 

• Limited ability to modify Scheduled Commercial Operation Date 

under PPA terms 

• If Facility is not on line w/in 90 days of Scheduled CO, as it may be 

revised, then contract terminates 

• Reservation Deposit returned in full if Commercial Operation 

achieved in a timely manner 

– Deposit is not returned if CO date passes 

– Pro-rated return of Deposit if Seller gives early notice of termination 

28



Process – Commercial Operation Under PPA and IA 

• Goal was to simplify PPA, and make terms and 

conditions less onerous than in bilaterally negotiated 

contracts 

• Specific Performance. SMUD can terminate for failure to 

perform 

– With 2 consecutive years of energy production below 75% of 

expected level. 

– With 12 consecutive months of no production 

• No monetary penalty for termination 

• No specific financial security requirements 

29



Process – Commercial Operation Under PPA 

• We purchase all green attributes 

• WREGIS. SMUD will register these in our own WREGIS 

portfolio, which will reduce overall cost of administration 

for RECs 

• We’ll require telemetering for anything 1,000 kW and 

larger 

30


Workshop on 



Interconnection 

31



Interconnection – Review 

• Review Design of Proposed System 

– Maximum Generation 

– Locate proposed property on SMUD system 

– Assessor Parcel Number required 

• Evaluate Adjacent System Capacity 

– Existing loads (Historical) 

– Existing/Pending Generation 

– Line capacity limits 

– Voltage regulation limits 

• Basic Protection review 

• Voltage Regulation review 

• No issues? Grant Preliminary Interconnection Approval, Provide Interconnection 

Cost Estimate 

32



Interconnection – Study 

• Issues? 

• System Impact Study. Request Applicant funding. 

• Identify required remediation –options 

– Upgrade distribution line 

– Replace/ reprogram existing substation LTC 

– Increase substation capacity 

• Produce rough estimate of remediation cost 

• Provide results to applicant for project 

– Applicant determines project viability 

• Proceed with remediation’s 

– Applicant pays estimated cost 

– Detailed estimate completed by Design 

33



Interconnection – Opportunities Map 

FEED-IN-TARIFF PROJECTS 

ESTIMATED LOW COST 

INTERCONNECTION 

SUBSTATION CAPACITY 

(UNCONSTRAINED) 

> 5MW 

≤ 5MW 

≤ 3MW 

≤ 2MW 

≤ 1MW 

34



Interconnection – Opportunities Map 

35


Workshop on 



Navigating 

www.smud.org 

36



Navigating www.smud.org 

• Where do I find Feed-In Tariff 

information? 

• www.smud.org 

37


Workshop on 



Any Other 

Questions? 

38


Workshop on 



Thank-you! 

39

SMUD's Feed-In Tariff

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?