Understanding Net Metering
From time to time we have members inquire about small-scale, home or business based power generation such as small wind turbines and rooftop solar panels, which are referred to as distributed generation (DG). We want you to know our team at Callaway Electric is here to help with the process of weighing options and setting up the best system for you.
Most members with DG systems use Callaway Electric Cooperative's grid to buy power during times when their DG systems are not producing enough power to meet their needs and to sell power to the Cooperative when their systems are producing more electricity than is needed. To encourage DG systems when they first came to the market, many states approved a billing system called net metering.
What is net metering?
A simple explanation
Net metering, as the name implies, is a metering process designed to determine the net amount of energy provided to the member by the cooperative and the energy provided to the cooperative by the member. Simply put, net metering is the difference between how much energy is used at a member's home or business and how much energy the DG system at that home or business produces during each billing period. Net metering policies vary by state, and in Missouri, electric utilities must abide by the "Net Metering and Easy Connection Act." These details are based on the Missouri Act.
Net amount purchased
Give me an example
Suppose you have installed DG at your Missouri home or business and are connected to the grid. Callaway Electric will net your monthly use against your monthly generation produced and delivered to the grid, measured during each billing cycle. If your monthly use is more than your monthly generation produced, you will pay the difference based on the cooperative's retail rate. If the generation your system produced and delivered to the grid is more than your monthly use, you will receive a credit, based on avoided cost (explained next), on your monthly bill.
Net Amount credited
What is avoided cost?
Per the Missouri Net Metering Act, any credit from generating more energy than you used will be based on the average monthly avoided cost of Associated Electric Cooperative, Inc. (AECI), Callaway Electric's wholesale power provider. Avoided cost is what it would cost AECI to generate power or purchase power from another utility. The credits will never be paid in cash to a member. They may only be used as a credit against energy used and billed at Callaway Electric's retail rate. Under the Act, the credits must be used within 12 months or they expire without compensation.
Net kWh to credit
Avg Avoided Cost per kWh (cents)
Credit Received (dollars)
You will still have a bill
Regardless of the amount generated by your DG system, you will always need to pay Callaway Electric's fixed monthly fee, also referred to as a service availability charge. This charge helps Callaway Electric partially offset operating costs for things such as poles, wires, meters and other infrastructure to keep your power safe and reliable. Your net metering credits are not applied against that charge.
Monthly service availability ($)
Energy Rate per kWh (cents)
Avg Avoided Cost (cents)
How do the meters work?
Recording the Data
Every CEC member has an electric meter that records the amount of power delivered by the co-op. As electricity is used, the meter spins forward, much like a car's odometer records miles traveled. Under net metering, CEC uses a single bi-directional meter or two meters to measure the net of the energy used and produced. A single bi-directional meter provides two readings - one for the energy purchased from the grid and one for the energy provided to the grid. We will then "net" these two readings to determine the bill. Alternatively, we can use two separate meters to acquire these two readings.
Energy Purchased by member
Energy provided by DG
Net amount billed
What are my next steps?
If you are considering installing a DG system, we encourage you to talk with the energy experts at Callaway Electric first. Not only will this be helpful, you are also required by law to inform and work with us prior to installing a DG system that connects to the grid and be sure it meets safety requirements. We can provide resources to help you decide if a DG system is right for you and provide you with the proper information and forms you will need going forward.
Talk with our Team
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