What is the purpose of the Net Billing Standard Offer Program?
The Net Billing Standard Offer Program is intended to support greater use of renewable sources of energy in Jamaica. The program seeks to encourage electricity production by small intermittent sources of renewable energy of 100kW or less, via a simple contract arrangement. These installations will require supplemental power from the JPS and will on occasion have excess electricity, which can be sold to the utility – so long as the Gross System Output does not exceed 10kW AC output for myHome facilities, or 100kW for myBusiness facilities.
Who Initiated this Program?
The Government of Jamaica as part of its Energy Policy has proposed a number of initiatives to make investment in electricity generation for the public grid from renewable sources, economically viable. The Government has set a target where 15% of total generation should be provided from renewable energy sources by 2015. The OUR, which is responsible for the addition of generating capacity to the grid, has reserved a block of capacity for renewable sources, one portion of which should be in the category of 100kW or less.
Who is eligible to participate?
Participation in this program is limited to JPS customers in good standing at the time of application, ie no outstanding payments due to JPS. Additionally the following conditions must be met:
- Participant’s system must have a gross generating capacity of no more than 10kW for myHome customers and 100kW for myBusiness customers.
- Applicant must be the owner of the property where the generating facility will be located, or have the permission of the property owner and also have an account with JPS.
How do I become eligible if I am not an existing customer?
Recent or new customers will have to establish an operation record of at least 3 months, before consideration by JPS for participation in this Program. After this waiting period, JPS being mindful of the criteria used for longstanding customers, will decide on the condition for inclusion of such recent/new customers.
What renewable resources and technologies are eligible for the programme?
All renewable sources and technologies of an intermittent nature are eligible to participate. It is expected however that in the 2-year pilot programme most projects will generate electricity from wind or solar PV.
Can JPS install a renewable energy generating system for me?
Yes. JPS is also a provider of renewable energy solutions to its customers and this includes the design and installation of renewable energy systems. JPS encourages its customers to educate themselves with regard to the technology and equipment they may purchase and install, and to determine that their design and installation will comply with the applicable codes and standards. Codes and Standards are available from the OUR and JPS.
When will the program start?
Applications are accepted from May 1, 2012.
When can an application be submitted?
Application forms are available on the Office of Utilities Regulation (OUR) and Jamaica Public Service Co Ltd. (JPS) websites and can be submitted within business office hours at the aforementioned organizations from May 1, 2012. Applications being sent to JPS, may be submitted at 6 Knutsford Blvd., Kingston 5.
How long will the application process take? And how long will the contract process take?
Upon acknowledgement of the application for participation in this Program, it is expected that the contract process should be completed within 2 months. Also, the application process timing is dependant on the customer supplying all relevant information as needed.
Will the program ever be revised?
The Program will be implemented initially under a pilot limited to 2 years, at the end of which there will be an assessment of the programme. The recommendations arising from this assessment will drive revisions to the programme on the subsequent roll-out. Additionally, the contact terms and conditions may also be reviewed every 5 years in keeping with program experience and policy guidelines of the OUR. Changes to contract terms will not apply to existing contracts but only to subsequent signings.
What rate will be paid to customers who sell electricity to JPS?
Facilities that sell electricity to JPS under the Net Billing Program will be paid the prevailing short run avoided cost of generation, plus a premium of up to 15%. In other words, they are paid an amount based on the fuel costs that JPS has not incurred (or avoided), by having the customer produce power.
Does this rate ever change?
This rate is calculated every month by JPS and approved by the OUR.
What is the application process?
Interested JPS customers may obtain Application Forms and Program Guidelines from JPS and the OUR websites. Applications must be submitted to both JPS and the OUR. A non-refundable application fee of $2,000 for myHome customers, and $10,000 for myBusiness customers, shall be paid with the submission of the application to the OUR. No fees are required to be paid with the submission of the application form to JPS. JPS will acknowledge receipt of the Application form within 14 days of its submission. The Application must provide the following information within the application form:
- Applicant/Account holder’s name
- Facility’s address
- System Type
- System capacity and or inverter rating
- Electrical Configuration ( single or three phase)
- Rating of facility’s main breaker
- Inverter electrical output (voltage/frequency)
- Projected energy sales to the utility
What major documents will be required?
The following documents must be submitted with or not long after the application is submitted and before the OUR is advised that they can proceed to the next stage in the Application process which is processing the License.
- Facility or site layout diagram
- System design with equipment description and specifications
- Interconnection drawing(s)
- Protection schematic and settings
What other documents will be required?
Before final approval is granted for the system to be connected to the electricity grid the following submissions will be required among others as outlined in the SOC
- GEI report
- Copy of the License
- Insurance policy
- Proof of ownership of the location for the generator or authorization to install the system
- Environmental or any other relevant approvals (if required)
- Revised drawings (if changes were requested by GEI)
Can you explain the application process step by step?
The application process is outlined in the Application Process Document which can be found on the OUR or JPS websites and can be summarized at follows.
- Submit an application in duplicate to JPS which will be stamped (date, time location) and one copy returned to the applicant for submission to the OUR.
- An application fee is paid to the OUR and
- A receipt is given to the applicant.
- In addition to the application form, applicants should also present to JPS as stated in Schedule 3:
- A site layout drawing, showing the building/house, location of major components up to the utility incoming supply
- Single line system design with supporting documentation, showing the arrangement of the components from the renewable energy generator to the utility disconnect, to the utility incoming supply
- JPS may request additional information from applicants or their contractor to clarify aspects of the information submitted.
- Upon completion of its technical and administrative assessment JPS will advise the applicant and the OUR of its approval or additional requirements.
- If the application is approved by JPS, then the OUR will do its assessment and make its recommendation to the Ministry of Energy.
- If a license is approved, the applicant and JPS are advised by the OUR and a copy of the Net Billing Standard Offer Contract is sent to the applicant for review prior to signing.
- On signing, the applicant has 18 months to install and commission his renewable energy generator.
- Installation begins with the submission of the system design which forms part of the Standard Offer Contract to the GEI for approval.
- On approval, the applicant should install his system in accordance with the approved drawings and relevant standards
- Any new or modified infrastructural changes required of JPS as part of the renewable energy system installation will be done in keeping with JPS existing procedures.
- Cost of changes will be borne by the applicant.
- The applicant is responsible for coordinating the execution of infrastructural changes with JPS.
- JPS will install the utility disconnect switch, in coordination with the applicant.
- On completion of the installation, the GEI is expected to inspect and approve the installation and will issue a certificate to JPS and a report to the applicant.
- The applicant should then submit the GEI inspection report and all outstanding documents to JPS, after which the applicant will be advised of a date for the commissioning of the renewable energy system.
- Prior to commissioning, the applicant’s meter will have to be changed to facilitate the temporary recording of delivered and received energy.
- Commissioning will consist of a number of activities which will include:
- Verifying that there has been no material modifications to the original design documents submitted to JPS and incorporated as part of the SOC;
- Anti-islanding verification test;
- Verify operation and security of the utility disconnect switch.
- Following completion of the commissioning exercise the applicant will be advised via written communication, of the results of the commissioning, and if successful the official Commercial Operation Date.
Will there be adjustments to the pricing? If so when?
Changes or modifications to pricing or pricing structure of net billing projects, are within the sole responsibility and jurisdiction of the OUR.
Will any adjustments also apply to previously signed contracts?
No. Existing contracts will be honored in accordance with the pricing regime in effect at the time of signing.
What price will I have to pay for electricity that I sell to the utility?
The price paid to participants in the Net Billing Program will be the short run avoided cost of generation plus a premium of up to 15%. This will be computed using the Net Generation by power plants on the grid for the applicable period and their related fuel costs.
Why is there a different pricing for renewable sources and cogeneration?
Cogeneration systems by their design should have operating cost below the avoided utility costs, while renewable systems with their environmental benefits, have a high initial capital cost which may be a disincentive. Hence, the reason for the avoided cost, plus premium for renewable.
Is there a different price being paid for electricity being purchased in peak and off-peak periods?
No. There is no distinction at this time between electricity purchased during the on-peak, the off-peak or the partial peak periods.
Who will make the payments to the participating JPS customers?
JPS will compensate participants in the Net Billing Programs as follows:
- Each month the Customers will be compensated for the energy supplied to JPS at the short-run-avoided cost of generation rate. This money amount will be shown on the electricity bill as a credit.
- If after application of the credit, monies are still owed to JPS, then this amount is to be paid by the due date.
- If after application of the credit, monies are owed to the customer, then this money amount will be carried over to the next month’s bill.
- At the end of June and December every year, any credit balance on the customer’s account will be paid in full by JPS.
Does JPS guarantee payments even if the program is changed or cancelled before the end of a contract?
Yes. Signed contracts will be honored up to the point of termination or renewal.
What are the payment terms?
In all cases, settlement will be based on electricity actually delivered to JPS, based on metered data, and not on the rated capacity of the project. Payments will be made according to the JPS’ normal billing schedule.
Who will own Renewable Energy Attributes?
The customer will retain all rights to renewable energy attributes related to their renewable energy generating system.
What are the estimated costs that the participants will be required to cover?
It is difficult to outline all the possible costs at this juncture due to the possible difference in facility types, size and location. At a minimum, there will be the following costs, separate and apart from equipment costs:
- Non-refundable application fee (to OUR)
- Impact study cost (if deemed to be necessary)
- Interconnection infrastructure cost (if deemed to be necessary)
- Meter cost.
Apart from the purchase price of the electricity will there be any other incentives offered?
At this time the only additional incentive being offered to participants is a renewable energy premium, which can be up to 15% of the avoided cost.
Do I need to obtain any licences?
After an application is accepted and approved by JPS, a standard license should be issued by the Ministry of Energy on the recommendation of the OUR.
What are the costs involved with licensing?
All renewable energy generating facilities are required to pay a non-refundable licence fee or a one-time application fee of J$2,000.00 for myHome facilities and J$10,000.00 for myBusiness facilities. The application submitted to the JPS and OUR, includes a section which is a request for a licence. Following an assessment by the OUR, and its favourable recommendation, a licence will be issued by the Ministry of Energy
When do I need to secure the licences?
The licence must be obtained before the standard offer contract is signed and before any form of interconnection to the electric utility. The respective authorities and agencies can provide the timing requirements for other permits and approvals.
Can a generator continue with the application and receive a contract even if the license is pending?
A valid license to generate electricity is a prerequisite to enter into a Standard Offer Contract SOC. The application process is sufficiently flexible to accommodate short delays but a valid and approved license must be obtained prior to executing a SOC.
Are there contracts of different duration?
All Net Billing Standard Offer Contracts are for a 5-year term, effective from the first day of myBusiness operation of the generating facility, which must be within 18 months of the date on which the contract was signed. Once the contract expires, it is renewed based on mutual agreement and approved terms and conditions, as stipulated by the OUR.
Who are the participants in the contract?
The contract is between the project principals and the Jamaica Public Service Company Ltd.
Will property tax assessments be changed with the addition of a generation facility on the land?
The Parish Council assesses property taxes. Prospective applicants should contact their local municipality for advice.
Is there an opportunity for any of the contract members to cancel the contract?
Projects are required to begin myBusiness operations within 18 months of the signing date of the SOC; otherwise the contract may be terminated by either party with the stipulated notice period if there is a breach, or by mutual consent.
Do I need a new meter and if so, do I need to pay for it?
JPS will in most cases, replace your existing meter with a new one that is capable of measuring electricity flow in both directions. The cost of this meter can be paid for upfront by the participant or monthly over a 6-month or 12-month period. Alternatively, JPS may upgrade the existing meter with the required Net Billing features, the cost of which will also be recovered from the participant.
What is the difference between net metering and net billing?
Net Metering is when the utility allows a customer having a renewable energy system to reverse his meter when he has satisfied his internal load requirement and has excess energy which is sent to the electric grid. This decreases his meter’s net kWh reading and he receives the full retail rate for this excess energy. However, when he takes energy from the grid his net kWh reading increases. Net Billing is when the utility uses two meters to measure (i) energy sent to the electric grid from a renewable energy system and (ii) energy received from the electric grid by the customer. The energy received is valued at the existing retail rate dependent on the electricity rate schedule. A rate lower than the retail rate is applied to the energy sent to the grid and the resulting money value is applied to the electricity bill as a credit or bill reduction.
Why is Net Metering not offered?
Net Billing is the option approved and being promulgated by the OUR, not Net Metering.
Why is there a 100kW capacity limit?
The Net Billing Standard Offer Program is intended to make it easier for smaller renewable energy projects to contribute to the renewable energy targets of the country’s electricity supply system, by providing a standard pricing regime and simplified eligibility, contracting and other rules. Other procurement processes are expected for larger capacity projects.
Is the “Gross System Output” (GSO) for Solar Photovoltaic projects under the Net Billing program an AC or DC rating?
The definitions and contract language relating to GSO of a project can be based on either the DC Solar PV panel rating or the AC inverter rating, so long as the GSO does not exceed 10kW AC output for myHome or 100kW for myBusiness facilities.
What are the specific connection requirements?
Specific connection requirements are outlined in the “JPS Guide to Interconnection of DG to the Grid” which can be requested from JPS
Who is responsible for arranging connection with the distribution system?
The facility is solely responsible for negotiating and coordinating connection and metering for the project with the JPS and for arranging payment of all associated costs.
Is there any support for applicants trying to connect to the distribution system?
JPS will provide information regarding the local distribution system and connection process, however the associated costs are the responsibility of the applicant.
Will all applicants be allowed to connect to the electricity distribution system?
JPS reserves the right to limit or reject projects where, for technical reasons, the transmission/distribution system is not capable of receiving additional power after technical assessments and simulations.