2015 Fall PR-MR & Marketing Meeting October 16, 2015 Fairo Mitchell Energy Policy Director, Public Utility Division Oklahoma Corporation Commission

 17 O.S. §, 156 A. As used in this section:  1. "Distributed generation”  c. is intended to offset only the energy that would have otherwise been provided by the retail electric supplier to the customer during the monthly billing period,

 17 O.S. §, 156 A. As used in this section:  1. "Distributed generation" means  f. does not include customers who receive electric service which includes a demand-based charge.

 17 O.S. §, 156 A. As used in this section:  2. "Fixed charge" means any fixed monthly charge, basic service, or other charge not based on the volume of energy consumed by the customer, which reflects the actual fixed costs of the retail electric supplier.

 17 O.S. §, 156 B. No retail electric supplier shall increase rates charged or enforce a surcharge above that required to recover the full costs necessary to serve customers who install distributed generation on the customer side of the meter after the effective date of this act.

 17 O.S. §, 156 C. No retail electric supplier shall allow customers with distributed generation installed after the effective date of this act to be subsidized by customers in the same class of service who do not have distributed generation.

 17 O.S. §, 156 D. A higher fixed charge for customers within the same class of service that have distributed generation installed after the effective date of this act, as compared to the fixed charges of those customers who do not have distributed generation, is a means to avoid subsidization between customers within that class of service and shall be deemed in the public interest.

 17 O.S. §, 156 E. Retail electric suppliers shall implement tariffs in compliance with this act no later than December 31, 2015.

 Distributed Generation Offsets Energy Component of Bill Does not include a demand charge Does not offset Fixed Cost Can not charge above full cost to serve Can have higher fixed charges in the same rate class to avoid subsidy Must implement tariff before December 31, 2015 SIMPLE, Right?

WRONG

 Executive Order Senate Bill 1456 that amends Section 156  Does not mandate tariffs or other increases for distributed generation customers.  Requires the OCC to conduct transparent evaluation of DG consistent with Oklahoma First Energy Plan  Evaluation mandates inclusion of all stakeholders,  Prior to implementation of any fixed charges, the OCC is allowed to consider all available alternatives e.g. time-of use rates, minimum bills and demand charges.

 OAC 165: Purchase rate (a) For power produced in excess of on-site requirements, the producer will be compensated by the retail purchase meter running in reverse. The cooperative/utility shall bill the producer for the excess of energy supplied by the cooperative/utility over and above the energy supplied by the producer during each billing period according to the cooperative/utility's applicable retail rate schedule.

 OAC 165: Purchase rate (b) When the energy supplied by the producer exceeds the energy supplied by the cooperative/utility during a billing period, the monthly charge and/or minimum bill of the retail rate schedule shall be billed by the cooperative/utility; the excess energy shall be provided at no charge to the cooperative/utility.  SIMPLE, Right?

WRONG

 OCC held public meetings to get stakeholder input  PUD created a check list to address various complexities of DG applications

 Tariffs Are they mandated?  Subsidy Does it have to be established?  Full Cost Can it be offset?

 Demand Charges Can they be implemented on a DG customer? May require residential customer education  Net Metering Rules May need to amend – Oklahoma stands alone  If fixed cost are being moved from energy component to another component that a DG customer can not avoid, the utility may need to allow customer to carry forward excess generation

 OG&E has a pending application If ordered as proposed, OG&E’s new rates would add a demand charge to the bills of distributed generation owners, which already include an energy charge, a fuel charge, and a customer charge. The proposed demand charge was put at $2.68 per kilowatt each month. ​  PSO has not filed for a new tariff yet.  Electric Cooperatives???