FAQs About Installing Renewable Energy Systems & the City’s Avoided Cost for All Customers Policy
Q1: I’m considering installing a renewable energy source (wind, solar energy, water, etc.) system for my home to help control my energy costs. What do I need to know before I sign a contract with a vendor?
A1: The City wants renewable energy in our community. In fact, one of the City’s strategic priorities is to provide reliable utility service that meets the needs of today’s customers as well as to anticipate future ones, and that means including renewable energy. However, before signing a contract and/or calculating any potential savings, it is important for customers to have a clear understanding of the methodology the City of Stillwater uses for calculating renewable electric energy and its credits.
If you are considering a renewable energy system, contact Electric Chief Engineer Kyle Muret at 405.533.8444 before you sign a contract. We can help you understand the City’s policy.
Q2: The vendor is promising a quick return on my investment. How will I know how much credit I’ll get on my electric bill once my renewable energy system is installed?
A2: Because of the expense of these systems and the perceived savings, it is important for our customers to talk to the City before signing a contract that promises you will see savings on your electric bill if you purchase X, Y or Z renewable energy system. What we are seeing is that some vendors are selling their systems promising savings that don’t reflect the Avoided Cost rate policy we have in Stillwater.
The City changed its approach or methodology from a Net Metering policy (2008-2018) to an Avoided Cost for All Customers policy (established April 16, 2018). The reason for the change from the net metering approach was the concern for fairness to all customers.
Q3. I thought the City used a net metering policy. When did that change and why?
A3. Net metering was a simple approach that allowed residents with customer-owned renewable energy systems (also called distributed generation or distributed energy resources) to offset their electric bills with the energy they produce.
As a result, when those customers reduced their consumption of power from the electric utility system, they also bypassed costs that were associated with the infrastructure needed to provide service when they were not generating—leaving non-distributed generation customers with the burden of paying those infrastructure costs. They were also given credits for their excess electricity from the City at their full retail rate.
The Electric Utility generally purchases electricity from the Grand River Dam Authority at an avoided cost of approximately three cents per kilowatt-hour (kWh). Under net metering, as mentioned above, it was giving electric credits to renewable energy customers at approximately eleven cents per kWh.
Q4. What is the City’s Avoided Cost for All Customer Policy and how does it affect me?
A4. The Avoided Cost for All Customers rate policy (established in 2018) establishes that the utility gives credits for renewable energy at the Stillwater Utilities Authority’s Avoided Cost price and sells all energy to the customer at the applicable retail rate. This approach also covers the not-so-obvious costs associated with generation, infrastructure, transmission, and distribution of electricity available to customers on demand.
Q5. Where I can I find documentation on the City’s renewable energy policy?
Q6. What does the City of Stillwater do with the revenue generated by providing public power?
A6. A lot actually! In addition to providing jobs to about 65 people in the electric department who keep Stillwater’s lights on, the revenue is used to replace or repair transformers and to purchase equipment like poles, wiring, street lights and bucket trucks.
Another important benefit of being a public power community is that a portion of the revenue is reinvested to improve and maintain crucial city services—such as fire, police, parks and roads. Since Oklahoma cities rely primarily on sales tax to fund local government services, cities like Stillwater are fortunate to have this additional revenue source.
Q7. I keep seeing reference to “Public Power” and “Community-owned.” What does that mean?
A7. Stillwater has been a community-owned electric utility since 1901 and has owned its own electric generation since 1903. In other words, Stillwater residents own the utility. Stillwater is the second largest municipal electric utility in the state as well as the largest transmission owner and electric generator. It is one of 191 of the nation’s public power utilities to earn the Reliable Public Power Provider (RP3®) designation from the American Public Power Association for providing consumers with the highest degree of reliable and safe electric service.
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Content last reviewed 08.29.2022
