The Fair Trading Commission (FTC) is giving consumers who generate renewable energy the right to choose their billing arrangements with the Barbados Light & Power Company (BL&P) under the Renewable Energy Rider (RER) programme.
The decision, which takes effect from September 1, was a shift from the FTC’s August 9, 2013 RER ruling that consumers should be billed at the normal electricity rate for what is used from the grid, and then credited for the excess sold to the grid – the “sale of excess” billing arrangement.
The BL&P, which filed a motion for review of the RER decision, had indicated its preference for a “buy all/sell all” arrangement in which thecustomer is billed at the normal electricity rate for all the energy consumed regardless of the source, and then credited for the electricity generated at the RER credit rate.
However, it had also asked the FTC to consider either giving all customers with renewable generating systems up to 2kW the choice of their preferred billing arrangement and billing customers with renewable generating systems above 2kW under the ‘buy all/sell all’ arrangement; or giving all customers the flexibility of selecting their preferred billing arrangement.
Today, in a written decision issued by a panel led by chairman Sir Neville Nicholls, the utility regulator said that it had taken into considerationthe BL&P’s obligation to provide service to the entire country, the loss in the power company’s base revenue, and the financial impact on RER customers.
“Residential RER customers are expected to realize a marginally greater financial benefit under the ‘sale of excess’ arrangement, as reductions are expected in the customer charge, energy charge and fuel charge components of their bills,” the FTC said.
“Secondary Voltage Power and Large Power customers realise a greater financial benefit under the ‘buy all/sell all’ billing arrangement because such customers are credited for their entire RE generation at 1.6 times the FCA [Fuel Clause Adjustment].”
As for the BL&P’s financial concerns, the FTC said the projected loss in base revenue, if the maximum 7MW of installed capacity – the limit set in the RER decision – is billed using the ‘sale of excess’ arrangement, is approximately $2.3 million.
“This is because under the ‘sale of excess’ arrangement not all of the fixed costs associated with generation and distribution are recovered due to reduced energy sales. However, under the ‘buy all/sell all’ billing arrangement, the [BL&P’s] sales volume is unaffected and its base revenue is not compromised,” the regulator noted.
In its decision, the FTC said all existing RER customers could remain with their current billing arrangement or exercise the option, within three months, to change from ‘sale of excess’ to the ‘buy all/sell all’ billing arrangement.
All new customers with renewable generating systems with a capacity of 2kW and below will have the option to choose; all new Domestic/General Service and Employee RER customers with renewable generating systems above 2kW will be billed under the ‘buy all/sell all’ billing arrangement; and all new SVP and LP RER customers will be billed under the ‘buy all/sell all’ billing arrangement.
The RER, which was introduced with its approval on a two-year pilot basis starting in 2010 but will become permanent, was designed specifically to facilitate the sale of excess electricity to the grid by customers using a solar photovoltaic or wind renewable energy system to offset electricity consumption from the grid.
The FTC also maintained the RER credit of 1.6 times the FCA, which is the rate the BL&P had proposed.
In an initial response to the ruling, the BL&P said it would comply with the decision.
“The Barbados Light & Power has acknowledged the FTC’s decision on the motion to review the Renewable Energy Rider. The decision appears balanced and the company will comply with its implementation from September 1, 2014,” the company’s Corporate Communications Coordinator, Jackie Marshall-Clarke, told Barbados TODAY.