Green Power in Saipan

It's been a year or two since the "Green Power" law was passed. Basically, it allows for a concept called "net metering." There are two basic ways people use alternative (solar/wind) power. First, you can buy the power generating stuff -- solar panels, windmills -- and buy batteries that store the power generated, and use it when you need it. There are a couple of difficulties with this. First, the batteries are really expensive, so cost goes up. Second, you have to generate enough power to meet your demands. This is the method people use to live "off the grid." You generate and store their own power.

The other method is "net metering." You buy the solar panels or windmills, but your house is still connected to the utility. The power you generate is gets fed into the city power grid. If you don't generate enough to meet your needs, you get the extra you need from the utility. If you produce more than you need, you feed it into the grid for others to use, and the utility pays you for the power. The excess feeds through your meter and runs your meter backwards, thus the term "net metering". With this method, you use the grid as your "storage" so you save the cost of batteries. Of course, without storing the power yourself, when the CUC power goes out, yours does too.

The fact that we have this net metering law opens some huge possibilities for the consumer to bring down the power rates and also to contribute to power generation for other customers. The glitch for us has been that although the law has been passed, the regulations that define the practicalities of implementing the law have yet to be written.

I fired off an email to an undisclosed source close to the issue to find out about the status of the regulations. Here is a summary of the reply I received. It looks like we're getting close.

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The net metering regs are being drafted right now. They are a blend of regs from a US green power NGO and 3 or 4 states. The adminstration is committed to making net metering happening, so that the private sector can help CUC meet its customers' needs cost-effectively and reliably. Oil will soon become unaffordable to small markets like the CNMI. We will need the sun, the wind, the ocean and geothermal resources to power our lives.

The consumers issues will be, of course, cost/revenue and reliability (both of your system and CUC). The regs should lock you into revenue of 1/2 the price of power at the time you install the solar. Solar is relatively expensive, but, when installed correctly and maintained (so the panels are clean and connections are protected from the salt air) should last for 10-20 years.

1. The kwh. As you may know, solar panels don't start working at 100% capacity the day you install them. The solar capacity increases to manufacturer's specs over a couple years, then slowly, slowly degrades over time. So, if you are figuring revenue, you will multiply an average output percentage times manufacturer's spec times "availability", or the number of hours per year expected of the "insolation".

2. The rate. You will want as much guarantee as possible that the rate you sign up for is the one you get. One argument from the statute is that your rate will vary as the CUC's rates vary. That means that if oil gets outrageously expensive (it's at $127/bbl now and on its way to $200/bbl by year end), our rates will increase past the 26 cents/kwh we now pay just for the oil, and you will like the variance. (Overheads, operations and maintenance and debt service typically cost about another 8-10 cents/kwh.) If we discover geothermal sources on Saipan, however, the bulk of our power will cost less than 10 cents/kwh total. You won't like that, because you will have paid for expensive solar and CUC won't be paying you very much back.

3. Rate stability. One way to make this all stable is through the regs. Another way is through a contract. The law will protect you better from the Legislature's rate orders for rate decreases if you have a contract. Ordinarily regs are a strong way to protect a customer, but a new statute trumps regs. Also, someone might argue that the CUC's interpretation of PL 15-87 to allow long term stability will stretch the statute's terms.

4. Another consideration for you is batteries. With solar, of course, you are unlikely to generate enough power during bad weather to run your house. And CUC may not be reliable during a supertyphoon. But batteries can easily double your investment. Many people use their utiltiy company as the "battery", relying on their own power when the sun shines.

If cost is not a big issue with you, you will want to buy a system that makes you energy independent -- oversize it, so you never peak in excess of your capacity, and use batteries. Of course you will also purchase very efficient mechanicals and appliances and superinsulate your home, and design a home that orients properly to the sun and the wind. These strategies provide you with much more value than buying the solar panels.

ONLY if there is an active group of potential green power producers examining the draft regs and contracts will you wind up with something satisfactory.