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Generating Value Behind the Meter

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AMP and its members are pursuing solar, natural gas projects that will deliver a variety of benefits

December 2015

Behind the meter generation (BTMG) is becoming an industry trend that many members can take advantage of through AMP.

In the simplest terms, BTMG lowers the amount being read on the meter by providing local generation and feeding native load. Reliability is one of the more notable benefits of BTMG, particularly with gas engine projects. The site can still operate in the event of a large-scale blackout and has the ability to provide power to the municipality in which it is located even if the grid is down.

The local generation also provides a reduction in load, which relieves stress from the transmission system – benefitting all project participants and all transmission users. By not utilizing the transmission, utilities should be able to increase the timeframe in between upgrades.

“The transmission grid is aging and continues to need infrastructure reconstruction and expansion investment,” said Steve Dupee, director of the Oberlin Municipal Light & Power System and chair of the AMP Board of Trustees. “As transmission-dependent entities, we’re going to foot the bill – behind-the-meter generation is a way to reduce demands on the transmission grid, increase reliability and hedge cost risk associated with transmission system investment over time.”

Oberlin is realizing value from BTMG in three main ways: merchant generator (landfill gas projects located outside of city limits that are tied to the city’s distribution grid), customer-owned generator (Oberlin College solar array) and city-owned generation (power plant).

“Capacity costs in the PJM market as well as transmission costs by our local transmission owner continue to rise,” said Dupee. “We’re able to offset those increases by virtue of operating our power plant during peak demand hours.”

Under the current market structure, it is a benefit to members that BTMG allows communities to bypass market requirements by keeping the generation under local control. Bringing more generation behind the meter also means a community is buying less power overall on the market. This reduces risks by decreasing reliance on capacity markets, which have been in a state of flux for the past year and a half, and avoids the steadily increasing rates imposed by transmission grid owners.

“Behind-the-meter lowers the transmission obligation because the generation is in your back yard,” said Craig Kleinhenz, AMP’s manager of power supply planning. “If transmission isn’t being used, then the community doesn’t need to pay for it.”

AMP is pursuing behind-the-meter in solar and natural gas projects to leverage the benefits and savings of BTMG – the Phase II solar project and a potential gas engine project.

AMP has a history of success with BTMG – AMP CT, Napoleon solar, Ohio Municipal Electric Generating Agency Joint Ventures 1, 2, 6, and JV 5 diesel units are all behind the meter projects.

Subscription for Phase II solar is under way and more than 20 BTMG sites in member communities have been identified as possible locations. Development of the first tranche of the Phase II sites in Coldwater, Michigan; Smyrna, Delaware; Bowling Green, Ohio; Prospect, Ohio; Front Royal, Virginia; and Marshallville, Ohio is already in the engineering and design stage. This AMP solar program will allow members to benefit from renewable energy, including transmission and capacity savings.

“As it relates to the solar investment, not only are you getting the value of behind the meter generation, but also reducing risk with future environmental regulations,” Dupee said. “It’s a dual benefit.”

The gas engine project is in the development phase, with a target of first quarter 2016 to begin subscription. The objective of this project is to provide smaller and more easily dispatched generation to better match load needs throughout the day.

AMP believes bringing local generation behind the meter is a positive solution for municipal electric systems to increase reliability and transmission savings, and combat rising transmission and capacity costs. The AMP solar and gas engine projects will help members take control of their future, and are a progressive way to increase reliability and lower expenses.

Learn more about AMP’s projects on the Generation Page of the AMP website.