Local Generation and Net Metering

April 6, 2022

Most of NOTL Hydro’s power comes from the transmission grid.  This grid connects all the large power generation such as the Beck power plant on the Niagara River (where our power usually comes from), the nuclear power plants, the big wind farms, the gas peaking plants and many other smaller stations to all the distributors like NOTL Hydro.  This grid is managed by the Independent Electricity System Operator (IESO) whose job it is to ensure we have the power when and where we need it.

However, we also have 168 small generation facilities connected directly to our local distribution grid within NOTL.  Together these facilities supply us with around 16 GWh’s of power or 7% of our total annual load.  They range in size from 10 kw rooftop solar systems on a MicroFIT contract (145 of these) to a hydro plant on the Welland canal that is over 2 MW.  All but two of these facilities are solar.  Besides the hydro plant there is a Biomass generation facility that is currently not operating.  There are no wind power facilities in NOTL. 

There are other local distributors that get a higher percentage of their supply from local generation.  However, on a per capita basis, I believe we may have more solar generation here in NOTL than in any other municipality.

158 of these facilities are on a fixed price contract with the IESO.  The facilities are directly connected to the NOTL Hydro grid and their output is not used by the owner.  NOTL Hydro pays for their produced power based on their contract price and their monthly output.  NOTL Hydro is then re-imbursed by the IESO.  The cost of these contracts is thus spread over all the rate-payers in Ontario and not just those in NOTL.  Contracts of this nature are no longer available.

The remaining 10 facilities are on a net metering contract.  Under a net metering contract, the power from the generation facility is first used by the customer for their needs.  The generation is connected directly to the customer.  If there is excess power, like in the middle of the day, then this is fed onto the distribution grid and the customer gets a credit.  This credit can then be used to offset the cost of power taken from the grid such as at night or during the winter.  The credit is calculated based on the cost of power at that time as well as any other variable (per kwh) charges.  Fixed monthly charges must still be paid.

Some key features about net metering:

  • A customer is never “paid” cash for their power, they can only use their generation to offset their own power needs at that time or in the future.
  • If a generation credit is never used then it can be dropped after twelve months.  This means that it does not make sense to overbuild your generation but rather to right-size it.  Otherwise, you will be donating power to the rest of the Town.
  • Net metering is only available for renewable generation (solar).  It is not available for any fossil fuel generation.
  • You need to have a signed contract with NOTL Hydro to get net metering.  Make sure you can get this contract before you build.  There are electrical engineering principles that restrict how much generation can be connected at various points in the system.
  • Solar installations are still expensive though the cost is constantly falling.  You will need to determine if, or when, this makes financial sense.

There may be other solar installations that we do not know about if they are not net metering. 

NOTL Hydro is here to assist if customers wish to install solar power at their premises.  We will try to make the process as easy as possible as our goal is to be a facilitator and not an obstacle.  However, as mentioned above, there are some very real physical issues that do limit how much solar power we can handle on our system. 

1 thought on “Local Generation and Net Metering

  1. Great information for residents of NOTL. As we transition to electric vehicles there is a real possibility that some property owners will install solar power generation to offset the cost of “fuel”.

    It is then reasonable to conclude that at times they will have surplus power to share within the community.

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