Distributed Generation

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Q. What is Distributed Generation? 

A. Distributed generation (DG) is the generation of electric power from a small energy source, such as wind or solar, and is an alternative to the large scale traditional electric power generating plants. A form of distributed generation is the use of a wind turbine or solar panels to generate electricity on site at the member’s premises. The electricity generated is typically used to satisfy the electric power needs of the producer, but excess power may be sold back to the utility.

Q. If I own distributed generation equipment, can I connect it to the electric distribution system of Medina EC?

A. Yes, Medina EC allows the interconnection of distributed generation facilities to the electric distribution system of Medina EC under certain conditions. The DG Tariff of Medina EC currently allows interconnection of DG facilities up to 1 megawatt (MW) in size. The DG Tariff has a complete list of rules regarding interconnection of a DG system to the Medina EC electric distribution system.

Q. What upfront costs are involved to interconnect with Medina EC?

A. There is an application fee of $25 for systems 10 kW or less, $50 for systems from 11 kW to 50 kW and $250 for systems 51 kW to 1 MW. If an interconnection study is required, the member will be required to compensate Medina EC for the cost of the study.

Q. Are there insurance requirements?

A. Yes, for DG systems 10 kW and smaller, the member will need to show evidence of personal liability insurance on their home owner’s policy. For DG systems with output from 11 kW to 50 kW, a general liability policy of $500,000 with Medina EC named as an additional insured is required. For DG systems whose output is greater than 50 KW, a general liability policy of $1,000,000 with Medina EC named as an additional insured is required.

Q. Why is insurance required?

A. Because of the inherent risks in generating electricity, it is a prudent measure for the member to protect themselves from losses or claims from damage that could be caused due to faulty equipment or an unexpected accident. While no one ever anticipates these events happening, insurance should be carried to provide coverage for damages to others and their property. As it is true for other personal property, it is up to the member to assume responsibility for insurance coverage.

Q. Will a distributed generation system pay for itself?

A. Installing your own distributed generation facility is an individual decision for each member. Medina EC’s role is to help educate the member regarding Medina EC’s expectations in this process. The member has the responsibility of determining whether the facility will generate enough electricity to offset the cost of equipment and installation. Medina EC will try to help you obtain information you deem relevant to your decision making process.

Q. What is net metering?

A. Net metering is a mechanism where energy (kWh) being delivered to the grid by a member is netted against that being delivered to the member through the metering process. Net metering essentially runs the Medina EC meter backward when the member is delivering energy into the grid.

Q. Does Medina EC net meter?

A. No, Medina EC does not “net meter.” Instead, Medina EC utilizes a single meter with two registers. One register measures all kWh that is consumed by the member and the other register measures all kWh that is generated by the member back into the grid.

Q. If I generate more than I consume, will Medina EC purchase my excess energy?

A. Yes, Medina EC will purchase all kWh generated by the member in excess of the kWh consumed by the member. The second register on the meter is used to measure all energy that flows back to Medina EC.

Q. How does Medina EC determine the price it will pay for energy created by a distributed generator?

A. If a member generates more electricity than they consume, they are credited for each kWh push back onto the grid at the “avoided cost.” The avoided cost is the cost Medina EC would have incurred had it been required to purchase the energy from a wholesale power supplier.

Q. How is the avoided cost calculated?

A. The avoided cost is calculated by dividing the prior 12 months’ total wholesale power purchase cost (excluding demand costs, transmission costs, ERCOT [Electric Reliability Council of Texas] and related fees and distribution costs) by the 12 months’ total kWh’s purchased.

Q. What steps do I need to follow to interconnect my DG system to Medina EC?

A. Members interested in interconnecting distributed generation to Medina EC’s electric distribution system should perform the following:

  1. Consult with a qualified distributed generation developer, installer or electrical consultant to determine technical requirements and potential costs.
  2. To indicate you are interested in interconnecting distributed generation, please call 1-866-MEC-ELEC (632-3532) or visit any Medina EC district office.
  3. Read and understand the DG Tariff to insure that all provisions will be followed.
  4. Complete the DG Application and return it to Medina EC with the appropriate application fee and a drawing of the member’s DG system.
  5. Schedule a visit for a Medina EC representative to visit the proposed DG facility.
  6. Complete the DG Interconnection Agreement and return it to Medina EC along with any necessary insurance documents.
  7. Give Medina EC the opportunity to witness or verify the testing of the DG facility.
  8. If system testing is approved and all conditions of the interconnection agreement are satisfied, the DG facility is eligible to operate in parallel with the electric distribution facility of Medina EC.

Q. Is it necessary for me to contact Medina EC about my distributed generation system?

A. If a member’s DG system is interconnected with the facilities of Medina EC, the member is required to disclose to Medina EC the presence of the DG system. Non-disclosure of an interconnection of a DG system could result in harm to Medina EC personnel and discontinuance of service to the member.