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Distributed Generation


What is Distributed Generation?
Distributed generation (DG) is any small scale generator that is located at or near the point of end use. DG may or may not be connected to the Farmers Electric Cooperative (Farmers EC) distribution system. However, the most common types of DG in Texas, wind and solar, are almost always interconnected to Farmers’ system.

Will Farmers EC allow me to install a wind generator or solar panels on my service?
Yes. Farmers EC allows interconnection of all types of DG, including wind, solar, etc.

What is the difference between DG and a wind/solar farm?
The main difference is that DG is typically smaller member-owned equipment that provides power to the member in parallel with Farmers EC’s system. A wind/solar farm is a collection of very big wind generators connected to the transmission system.

How much does a DG system usually cost?
The cost of a DG system depends on what percentage of your power requirements the DG system will supply. A DG system that will serve 100% your power requirements can be quite expensive.

Are there any tax breaks or incentives for renewable DG systems?
Farmers EC does not closely monitor state and/or federal DG tax policy. However, the Database of State Incentives for Renewable & Efficiency (DSIRE) contains a wealth of information: www.dsireusa.org.

Will Farmers EC buy my power from a DG system?
Yes. Farmers EC will buy DG power through a Net Metering policy. Net Metering is offered for 50 kW and smaller DG systems.

If the member’s DG produces more power than the member uses during a billing cycle, the excess power is given to Farmers EC free of charge. In short, this means that Farmers EC will never issue the member a check for excess power produced on a Net Metering account and it cannot be credited to another billing cycle.

What is Net Metering?
Farmers will install a digital meter that can read both Delivered Power and Received Power. Delivered Power is from Farmers grid to the member’s service point. Received Power is from the member’s DG to Farmers grid which occurs only when the DG is producing more power than the member is using. The digital display on the meter changes every 6 seconds and cycles through Delivered Power, Received Power, and Net Power (see illustrations below). Net Power is Delivered Power minus Received Power. Net Metering applies to a given billing cycle and the member will be billed for the Net Power usage.

For example, a member’s DG system produces 1000 kWh and the member uses 1800 kWh in a given billing cycle. When Farmers reads the meter, the Net Power will only show 800 kWh in addition to the meters previous reading. Therefore, the bill would only be for 800 kWh. If the DG system produced 1800 kWh, the Net Power would be 0 kWh in addition to the meters previous reading. Therefore, the bill would only consist of a base charge which is currently a minimum $20 charge ($15.00 Customer charge and $5 rate minimum) for residential accounts. In short, Net Metering means Farmers essentially buys back power from the member at the retail rate as long as the DG doesn’t produce more power than the member uses in a given billing cycle.

What about DG systems larger than 50 kW?
Farmers EC does allow interconnection of DG systems larger than 50 kW but Net Metering will not apply. For systems over 50 kW, Farmers EC will install separate facilities to the generator and the power will be delivered directly to our distribution system. The output is metered and Farmers EC pays the owner of the generator for the power output at the wholesale or avoided cost rate.

It is important to note that the larger the DG system, the more of an impact it will have on Farmers EC distribution system. Consequently, Farmers EC has more requirements for interconnection of DG systems over 50 kW. For more information, please contact Farmers EC’s Engineering Department.

What voltage requirements does Farmers EC have for Net Metering?
Since Farmers EC is a distribution system and your DG system will operate as parallel power sources, the DG system must be the same voltage level as your service. For residential services, this is almost always single-phase 120/240V 60 Hz.

What happens if Farmers EC has a power outage?
If Farmers EC has an outage, the DG system should shut down. If the DG system did remain in service, it would actually back-feed and energize Farmers EC’s lines. This would be a very dangerous situation where crews would expect the line to be dead when it is actually energized.

What does Farmers EC require if I decide to install a DG system of 50kW or less?
For DG systems that are Net Metered, all equipment is located on the member’s side of the meter; therefore, Farmers is not directly involved in the installation. Farmers does have the following requirements that must be met before it allows Net Metering to occur:

  1. Member must fill out and submit the original signed interconnection agreement.
  2. Member must provide proof of liability insurance in the amount of 500k (this can be an extension of the member’s home owner insurance policy).
  3. Inverter(s) must meet UL1741.
  4. Installation of a separate, lockable disconnect installed next to the meter base for the service.
  5. Member must provide a one-line diagram outlining the interconnection of the DG system.
  6. Farmers EC must inspect the final installation before it is brought online.

What is UL1741 and how do I know that my DG system meets its requirements?
The DG manufacturer should have an Underwriters Laboratory (UL) Certification. The DG system’s power inverter(s) will have a tag that will clearly show that it meets UL1741 (see illustration below for example of tag).


Why does Farmers have so many DG requirements?
As a rural electric cooperative, Farmers is your partner in providing you with safe, reliable electric service. Farmers EC has requirements in place to address issues of safety, grid integrity and cost fairness. Those requirements ensure that the cooperative can (1) protect the safety of members and cooperative employees; (2) maintain the integrity of the grid; and (3) establish mechanisms to ensure each member shares appropriately in the costs.

I want to install a DG system of 50 kW or smaller. Where do I start?
The first step is to contact a manufacturer and/or sales representative of DG systems to determine what type of system you want, how much it will cost, and the expected payback of the system. Once you find a system you are satisfied with, simply fill out, sign, and submit the interconnection agreement to Farmers.


Agreement for Interconnection 1986