The Sacramento Municipal Utility District (SMUD) has established a feed-in tariff (FIT), effective in January 2010. The FIT is designed to streamline buying electricity fed into its distribution system from eligible generation units at customer sites.
According to SMUD, the FIT removes barriers to interconnection by reducing regulation, making it easier for the utility and its power-generating customers to do business. It will also benefit the region by increasing energy efficiency, protecting the environment, saving money and reducing climate impacts of electricity generation.
The FIT minimizes the usual time and effort required to contract with power generators by standardizing the price SMUD pays. It is currently aimed at systems up to 5 MW connected to SMUD's local distribution system, and is capped at 100 MW system-wide.
The SMUD FIT applies to both renewable and fossil-fuel generation technologies. It sets higher prices for power produced from renewable sources but also applies to so-called combined heat and power generators.
SOURCE: The Sacramento Municipal Utility District