Steve Lindenberg

U.S. Department of Energy

Jim Green

National Renewable Energy Labora

WINDPOWER 2006

Pittsburgh, June 4-8, 2006

The Realities of Consumer-Owned 

For Rural Electric Co-opera

NREL/PR-500-39907
DISCLAIMER & GOVERNMENT LICENSE

This work has been co-authored by an employee of Midwest Research Institute (MRI) unde99GO10337 with the U.S. Department of Energy (the “DOE”). The United States Governm

the publisher, by accepting the work for publication, acknowledges that the Government reirrevocable, worldwide license to publish or reproduce the published form of this work, or a

purposes.Neither MRI, the DOE, the Government nor any other agency thereof, nor any of their empexpress or implied, or assumes any liability or responsibility for the accuracy, completenes

apparatus, product, or process disclosed, or represents that its use would not infringe any 

herein to any specific commercial product, process, or service by trade name, trademark, m

constitute or imply its endorsement, recommendation, or favoring by the Government or an

opinions of the authors and/or presenters expressed herein do not necessarily state or refle

Government or any agency thereof.
The Market for Small W

Turbines is in Rural Ame

• Better access to good wind resour• Zoning is less often a barrier • Larger parcels provide adequate s

wind turbine installations

• Most of rural America receives ele

from rural electric cooperatives

– 864 distribution co-ops serve 

39 million people in 47 states
Source: NRECA

Wind in Co-op Territo

Wind 

Resource
Consumer-Owned Wind P

The relationship betwee

wind turbine owners and their c

is crucial for the future 

small wind power!

Our Focus 

Æ consumer-owned wind 

– Wind turbine(s) connected on the con

side of the electric meter

– Reduces consumption of utility electri– Excess energy may be exported and – Consumers with energy-based tariffs– Single-phase electric service, typically 
Meter Configuration For Net 

Utility C

Net energy is recorded instantaneously as either a purchase or a sale.
Utility Co

Meter Configuration For Net 

Cumulative net energy is recorded.The account is settled either monthly or annua
Net Metering for Wind

NoneIndividual UtilitiesInvestor-Owned Utilities Only, No

Investor-Owned Utilities and Rur

10 

1,000

100

500

10 100

40

25/100 20

10

30

25 15/1

v

10/50

25

No 

Limit

40

25

25/

100

10/

100

50

25

25/

100

30

2,000

Settlement of Net Excess Energy:

MonthlyAnnualVaries by utility

50

NoneIndividual UtilitiesInvestor-Owned Utilities Only, No

Investor-Owned Utilities and Rur

10 

1,000

100

500

10 100

40

25/100 20

10

30

25 15/1

v

10/50

25

No 

Limit

40

25

25/

100

10/

100

50

25

25/

100

30

2,000

Settlement of Net Excess Energy:

MonthlyAnnualVaries by utility

50

Only 22 states have net metering for all rura
Wind Interconnection Disput

• Sweckers and Midland Electric Coo

– 8 years of litigation– Interconnection fees? Determination o

Avoided cost or net metering?

– Iowa Public Utility Board– Federal Energy Regulatory Commissio– Iowa Supreme Court 

• FERC ruling in February 2006 back

from the net metering enforcement June 2005

– Provisions of EPAct 2005 are changin

outcome is uncertain for net metering
Understanding the Co-

• Pinched Finances

– Smaller rural population means decl– Reduced ability to pay for facility fixe

• Price Signals Are Confusing

– Tariffs for consumers are kWh-based

Î perception that electricity is a var

– Coop operating costs may be 50% fi

• Load Match (~ 20% capacity credit)• Culture of Fairness 

– “member economic participation”

• Net Metering - It’s about the mone
Declining Rural Populat
Typical Utility Infrastruc

Investment Per Custom

• Electric power distribution $3• Telephone $1• Natural gas distribution $1• Cable television $ • Utility customers per mile of distribu

– Investor-Owned: 35– Publicly Owned: 47– Cooperatives: 7

Data from Sou

Source: 20

NRECA Strategic Analysis ▪ Last 
Times Are Changing

• Member preferences turning to re

energy

• Price of electricity is going up• Opportunity for rural economic dev

– Wind is an untapped resource

• Wind power is a hedge for an unc

– Price of coal? Price of natural gas? 

Carbon taxes? Other?
Co-ops and Consumer-Owned 

• Options

1. Avoided cost interconnections2. Net metering interconnections3. Green power generation 

• Co-ops aggregate and sell the green pow

4. Co-op support services for wind pow

• Sales, leasing, financing, installation, ma

5. Place value on environmental and/or 

risk-reduction attributes

6. Consumer-owned wind power to driv

economic development
Conclusions

• The market for consumer-owned w

in rural America where...

• Net metering is not widely available• There is a disconnect between co-o

consumer perceptions 

• Co-ops have significant fixed costs 

resistant to reduced revenues from 

• Benefits of consumer-owned wind p

being given monetary value 
Carpe

Ventem

www.windpoweringamerica.g