California Utilities Plan All Out War On Solar, Please Read And Help

[mspohr]

A way forward.

A solution for rooftop solar needs to reflect California values

The first part of a holistic solution is to mandate that everyone pay for energy in a way that is much closer to what it actually costs.

Second, we need to insist that higher income customers who are interested in solar also install home batteries. This transition to solar-plus-storage could occur in a short three-year period.

Third, lower income customers are currently suffering from the rapid inflation of energy costs largely driven by the spate of wildfires over the past five years and the need to harden the grid to wildfire. They deserve protection from rising costs.

Fourth, the growth of rooftop solar plus storage market is currently constrained by the supply of batteries – not the demand for them. Addressing the supply shortage is key to ensuring availability of battery packs and to allowing participation of Californians in the next phase of the energy transition.

 

[RandyS]

Back to the drawing board...

California regulator pulls solar reform proposal

A proposal that drew strong criticism was pulled from Thursday's agenda

www.kcra.com

This frequently happens when the Final Decision document isn't ready to be voted on at a regular CPUC voting meeting (which are held every 2 weeks). This one will take awhile because there are a lot of comments and reply comments to go through and incorporate, but the Final Decision will eventually be finished and voted out. My guess would be a month or two...Even on simpler proceedings, it's not uncommon to hold a decision back a meeting or two until it is ready to vote out...

 

[Merrill]

A way forward.

A solution for rooftop solar needs to reflect California values

The first part of a holistic solution is to mandate that everyone pay for energy in a way that is much closer to what it actually costs.

Second, we need to insist that higher income customers who are interested in solar also install home batteries. This transition to solar-plus-storage could occur in a short three-year period.

Third, lower income customers are currently suffering from the rapid inflation of energy costs largely driven by the spate of wildfires over the past five years and the need to harden the grid to wildfire. They deserve protection from rising costs.

Fourth, the growth of rooftop solar plus storage market is currently constrained by the supply of batteries – not the demand for them. Addressing the supply shortage is key to ensuring availability of battery packs and to allowing participation of Californians in the next phase of the energy transition.

All these articles talk about lower income people not being able to afford solar, how many of those even consider solar. Let get down to the real problem of the utilities, they need to be broken up into small businesses. Monopolies for profit is the reason are rates are the highest in the country.

 

[cali8484]

Second, we need to insist that higher income customers who are interested in solar also install home batteries. This transition to solar-plus-storage could occur in a short three-year period.

What is "higher" income exactly?

 

[mspohr]

Indiana utility’s net metering calculation overturned in court

An attempt to circumvent the state's already-limited net metering guidelines has been overturned in court, in a decision that distributed generation advocates see as an important step in strengthening the state's market.

pv-magazine-usa.com

One of the state’s investor-owned utilities, CenterPoint, attempted to change how the bill credit was calculated on customers’ monthly bills by eliminating this netting altogether, replacing it with a tariff provision that charged DG customers the retail rate for every kWh delivered by the utility and credited customers at the much lower 125% of wholesale rate for every kWh of energy delivered by the customer to the grid.

 

[Dave EV]

A way forward.

A solution for rooftop solar needs to reflect California values

The first part of a holistic solution is to mandate that everyone pay for energy in a way that is much closer to what it actually costs.

Second, we need to insist that higher income customers who are interested in solar also install home batteries. This transition to solar-plus-storage could occur in a short three-year period.

Third, lower income customers are currently suffering from the rapid inflation of energy costs largely driven by the spate of wildfires over the past five years and the need to harden the grid to wildfire. They deserve protection from rising costs.

Fourth, the growth of rooftop solar plus storage market is currently constrained by the supply of batteries – not the demand for them. Addressing the supply shortage is key to ensuring availability of battery packs and to allowing participation of Californians in the next phase of the energy transition.

Almost sounds reasonable, but the devil is in the details.

There was a recent ruling in Arizona that ruled the solar-penalizing rates they tried to implement were illegal. And they weren't nearly as bad as what has been proposed in California.

I agree that any rate plan should be applied across the board, whether or not you have solar.

There is some truth that there should be some sort of minimum bill that reflects the cost to be connected to the grid. It might need to be higher than what it is currently. On the other hand, you want to encourage people to use less electricity, so you want the lowest minimum rate possible so reductions in energy use get bigger reductions in their bill, so you can't let the minimum bill get too high.

It is also clear that we need more storage so we can shift solar away from the 10-2 PM solar peak and into the 4-9 PM demand peak. What's the best way to encourage that?

The current climate credit also further distorts things - it would be simpler if utilities were required to pay a penalty that they can not pass on to customers, for sourcing electricity from CO2 emitting generation.

All these articles talk about lower income people not being able to afford solar, how many of those even consider solar. Let get down to the real problem of the utilities, they need to be broken up into small businesses. Monopolies for profit is the reason are rates are the highest in the country.

Being able to run the the utility at a guaranteed profit, while being allowed to pass on the costs of boondoggles like ruining San Onofre or the cost of wildfires due to insufficient maintenance is insane. The non-profit, publicly owned utilities have a much better record of providing reliable service at lower costs in California than the for-profit utilities.

 

[Merrill]

I agree, what bothers me (one of many things) is that when you install solar you pay for it. Now you are getting power from the sun not the utilities so why do you have to be charged more for having solar.

 

[mspohr]

What is "higher" income exactly?

Well, that will need to be determined. Could be something along the lines of a monthly payment to finance the installation being x% of monthly income.
These recommendations are broad principles/strategy. The devil will be in the details.

One thing that I haven't seen much discussion is the issue of unbundling energy cost and distribution cost. Since utilities bundle distribution cost and energy cost together, people who don't consume much electricity (such as solar homes, small homes, energy efficient homes, etc.) pay a lower amount to cover grid maintenance. It seems for most utilities that grid cost is about 50% of the billed cost. If all customers paid a grid maintenance fee (probably proportional to the size of their connection, 100 amp, 200 amp, etc.) then we wouldn't have to try to adjust/tax/penalize people based on their electricity use. The grid would be paid for and people would then pay for the energy they used at a much lower rate (about 50% of current rate). This should work out to be about the same cost for "average" customers. People who draw less power would pay less. People who use more power would pay more.

 

[Dave EV]

Well, that will need to be determined. Could be something along the lines of a monthly payment to finance the installation being x% of monthly income.
These recommendations are broad principles/strategy. The devil will be in the details.

One thing that I haven't seen much discussion is the issue of unbundling energy cost and distribution cost. Since utilities bundle distribution cost and energy cost together, people who don't consume much electricity (such as solar homes, small homes, energy efficient homes, etc.) pay a lower amount to cover grid maintenance. It seems for most utilities that grid cost is about 50% of the billed cost. If all customers paid a grid maintenance fee (probably proportional to the size of their connection, 100 amp, 200 amp, etc.) then we wouldn't have to try to adjust/tax/penalize people based on their electricity use. The grid would be paid for and people would then pay for the energy they used at a much lower rate (about 50% of current rate). This should work out to be about the same cost for "average" customers. People who draw less power would pay less. People who use more power would pay more.

Utilities do this for commercial / business accounts now with larger "meter" fees and then demand charges, and if you dig into the fine print, the utilities also split up the distribution and energy costs. With the proliferation of CCAs (Community Choice Aggregators), many more people are seeing distribution and energy costs split up.

Demand charges are kind of what the whole NEM3.0 mess proposed, but based on the size of the solar system, when if anything, it should be sized based on the maximum export power over some time period per billing cycle.

If you truly want to make it "fair", you would split things up this way:

1. Grid connection fee - this is a base fee just to hook a meter up to the utility that covers the cost of the meter and the cost to maintain your account.
2. Demand charge - this is a fee that covers the peak demand (or supply if exporting solar) that covers the cost to maintain the size of the wires to supply your account. This should also have some sort of TOU component as well, since pulling 10 kW from the grid to charge your EV at 12 PM when you may be pulling electrons from your neighbor's PV system is different than pulling 10 kW from the grid at 7 PM when everyone else is also pulling energy from the grid as well.
3. Energy fee - TOU based energy costs based on actual amounts paid by the utilities to buy energy on your behalf.

The question is: Is that truly fair? There's all sorts of market distortions purposely applied to utility rates for a number of reasons...

 

[cali8484]

Well, that will need to be determined. Could be something along the lines of a monthly payment to finance the installation being x% of monthly income.
These recommendations are broad principles/strategy. The devil will be in the details.

That's kinda what I am concerned about. Vague principles/strategy without real practicality consideration. People's income will likely change over the lifespan of their solar system so will their monthly electric bill follow income? How much more bureaucracy would be required to implement such system? Multi-millionaire retirees who have little/no income would be exempt? It seems unnecessarily complex to add income as another factor to the already very complex and opaque utility rate plans.

 

[Altes]

Every state is panning war on solar, its not the state its the oil lobby, which is in every state

 

[Big Dog]

Almost sounds reasonable, but the devil is in the details.

Almost, is right. The goals are in conflict:
#1) Everyone pay their share of costs....
BUT, #2) higher income folks have to pay more to purchase a battery.
BUT, #3) lower income folks will be "protected" from rising costs, i.e, will not pay their share of costs..
BUT #4) state taxes - predominantly paid for by higher income folks -- will subsidize battery makers to setup shop in CA.

In other words, higher income folks (however defined) will pay more so others can pay less.

 

[mspohr]

Utilities do this for commercial / business accounts now with larger "meter" fees and then demand charges, and if you dig into the fine print, the utilities also split up the distribution and energy costs. With the proliferation of CCAs (Community Choice Aggregators), many more people are seeing distribution and energy costs split up.

Demand charges are kind of what the whole NEM3.0 mess proposed, but based on the size of the solar system, when if anything, it should be sized based on the maximum export power over some time period per billing cycle.

If you truly want to make it "fair", you would split things up this way:

1. Grid connection fee - this is a base fee just to hook a meter up to the utility that covers the cost of the meter and the cost to maintain your account.
2. Demand charge - this is a fee that covers the peak demand (or supply if exporting solar) that covers the cost to maintain the size of the wires to supply your account. This should also have some sort of TOU component as well, since pulling 10 kW from the grid to charge your EV at 12 PM when you may be pulling electrons from your neighbor's PV system is different than pulling 10 kW from the grid at 7 PM when everyone else is also pulling energy from the grid as well.
3. Energy fee - TOU based energy costs based on actual amounts paid by the utilities to buy energy on your behalf.

The question is: Is that truly fair? There's all sorts of market distortions purposely applied to utility rates for a number of reasons...

For residential users, I don't think a demand charge is appropriate for draw from the grid since this is not likely to be very large and not like commercial users. The size of the grid connection (100 amps, 200 amps, etc.) should cover this as a grid connection fee.
For solar, I don't see why there should be a fee at all since this power just goes to neighbors locally and no load beyond. Could, however, be subject to TOU to reflect what the utility pays for power.

 

[RandyS]

I agree, what bothers me (one of many things) is that when you install solar you pay for it. Now you are getting power from the sun not the utilities so why do you have to be charged more for having solar.

I just retired from 36 years at a California utility, and I'll try to explain one of the main issues. I'm a solar owner and an EV driver, so all of this affects me as well. I didn't work in the rates group or the solar group, but my knowledge comes from working at the utility for many years in various engineering positions...

Years ago, the utilities charged an all-in price per kWh and that covered all the services offered, the cost of the energy, transmission, distribution, billing, etc. Over time, some of those charges have been broken out and charged separately, but not all of them.

Here's the issue with your statement..."...when you install solar you pay for it. Now you are getting power from the sun and not the utilities so why do you have to be charged more for having solar?"...

You are making solar energy during the day, and either using all of it or using some and exporting some. You are using the grid at night, unless you have a lot of expensive batteries (most solar customers don't have batteries yet, but of course, that is increasing). But even those that have batteries are usually not covering all their consumption for the entire period of darkness. So most solar customers are purchasing power from the utility at night and using the grid. In fact, the utility peak has shifted from 4pm in the summer to 7-8pm for this very reason.

The issue is that many solar customers are not paying much of anything for the grid (The CPUC has refused a monthly grid fee for many years in the past). The grid is the tool that allows you to export your excess solar during the day and feed you with energy at night. While I happen to think that the proposed $8/kW grid fee is too much, there does need to be SOME sort of fee for the grid, because all customers use it, not just the non-solar ones. To me, that's one of the main issues (there are others, but that to me is one of the main issues). Like I said, I think it should be less than $8/kW, and with the advent of Smart Meters, I think customers could be charged based on what their actual grid demand is for the month with some sort of average calculation and that would be more accurate...We'll see what happens in the CPUC final decision...I hope that helps to explain a little bit...

 

[h2ofun]

I just retired from 36 years at a California utility, and I'll try to explain one of the main issues. I'm a solar owner and an EV driver, so all of this affects me as well. I didn't work in the rates group or the solar group, but my knowledge comes from working at the utility for many years in various engineering positions...

Years ago, the utilities charged an all-in price per kWh and that covered all the services offered, the cost of the energy, transmission, distribution, billing, etc. Over time, some of those charges have been broken out and charged separately, but not all of them.

Here's the issue with your statement..."...when you install solar you pay for it. Now you are getting power from the sun and not the utilities so why do you have to be charged more for having solar?"...

You are making solar energy during the day, and either using all of it or using some and exporting some. You are using the grid at night, unless you have a lot of expensive batteries (most solar customers don't have batteries yet, but of course, that is increasing). But even those that have batteries are usually not covering all their consumption for the entire period of darkness. So most solar customers are purchasing power from the utility at night and using the grid. In fact, the utility peak has shifted from 4pm in the summer to 7-8pm for this very reason.

The issue is that many solar customers are not paying much of anything for the grid (The CPUC has refused a monthly grid fee for many years in the past). The grid is the tool that allows you to export your excess solar during the day and feed you with energy at night. While I happen to think that the proposed $8/kW grid fee is too much, there does need to be SOME sort of fee for the grid, because all customers use it, not just the non-solar ones. To me, that's one of the main issues (there are others, but that to me is one of the main issues). Like I said, I think it should be less than $8/kW, and with the advent of Smart Meters, I think customers could be charged based on what their actual grid demand is for the month with some sort of average calculation and that would be more accurate...We'll see what happens in the CPUC final decision...I hope that helps to explain a little bit...

What does my connection fee for month cover?

Just seems everyone should start off paying the same connection fee no matter how much you use. Do we not do this with water, sewer, etc?

Then it seems you get charged for how much you use. Again for water, I pay for useage. If I put in fake lawn to save water costs, they do not raise my connection fee?

 

[mspohr]

I just retired from 36 years at a California utility, and I'll try to explain one of the main issues. I'm a solar owner and an EV driver, so all of this affects me as well. I didn't work in the rates group or the solar group, but my knowledge comes from working at the utility for many years in various engineering positions...

Years ago, the utilities charged an all-in price per kWh and that covered all the services offered, the cost of the energy, transmission, distribution, billing, etc. Over time, some of those charges have been broken out and charged separately, but not all of them.

Here's the issue with your statement..."...when you install solar you pay for it. Now you are getting power from the sun and not the utilities so why do you have to be charged more for having solar?"...

You are making solar energy during the day, and either using all of it or using some and exporting some. You are using the grid at night, unless you have a lot of expensive batteries (most solar customers don't have batteries yet, but of course, that is increasing). But even those that have batteries are usually not covering all their consumption for the entire period of darkness. So most solar customers are purchasing power from the utility at night and using the grid. In fact, the utility peak has shifted from 4pm in the summer to 7-8pm for this very reason.

The issue is that many solar customers are not paying much of anything for the grid (The CPUC has refused a monthly grid fee for many years in the past). The grid is the tool that allows you to export your excess solar during the day and feed you with energy at night. While I happen to think that the proposed $8/kW grid fee is too much, there does need to be SOME sort of fee for the grid, because all customers use it, not just the non-solar ones. To me, that's one of the main issues (there are others, but that to me is one of the main issues). Like I said, I think it should be less than $8/kW, and with the advent of Smart Meters, I think customers could be charged based on what their actual grid demand is for the month with some sort of average calculation and that would be more accurate...We'll see what happens in the CPUC final decision...I hope that helps to explain a little bit...

I agree that there should be a grid fee for solar... and ALL other users. Everyone should pay for the grid and be charged separately for their electric use.
My electric bill has a small "grid charge" ($8) which is really just a billing fee. It also has a "distribution charge" and an "energy cost charge". These two are about the same amount.

 

[iPlug]

The whole solar PV export fee thing is nonsense. This $8/kW or any such charge has always been a red herring to distract from the real issues that need to be worked on. There are already rules on how much solar can be installed on a residential premise and they are not a threat to the stability of the system.

What needs to be addressed is that every customer should have skin in the game, and the rules should apply to Solar PV and non-solar PV customers alike. Everyone should pay a separate connectivity fee (transmission/distribution line capital costs, improvements and maintenance, meter costs, etc) and separate energy fee (TOU and related demand import charges).

It's fine if the utilities want to credit at max wholesale rate for solar PV delivered on a mild sunny day at noon. But they should also be charging non-solar PV customers the same energy rate at that moment. If they want to charge $0.50/kWh at 7pm on a hot summer evening, fine. But the energy price should be same for solar PV as non-solar PV customers at that time. Got a battery and exporting to the grid instead of consuming then? Great, that $0.50/kWh should be credited to you.

 

[mspohr]

The real issue for the utilities is that residential solar reduces their revenue. They have made up all kinds of "fairness" and "load" issues to disguise that fact that they see their revenue decreasing when people generate their own power. They need to realize that they are a public utility, not an unregulated business focused on ever increasing revenue and profit.

 

[Dave EV]

Then it seems you get charged for how much you use. Again for water, I pay for useage. If I put in fake lawn to save water costs, they do not raise my connection fee?

It's funny you say that, but if enough people put in fake lawns, they will raise your connection fee. Our water utility has doubled our "system access charge" in the last 10 years. One of the reasons for repeated rate increases is the fact that we are indeed, using less water across the region, but a large part of the cost of running a water system is maintenance.

So yeah - unless the utility can figure out how to keep the system running for less money, the more people install solar, the higher your connection fee will go up. As stated earlier, this is one reason why an IOU (investor owned utility) with a guaranteed percentage return is a bad idea - they don't really care how much they spend on maintenance and infrastructure - in fact the more they spend, the more money they make.

 

[iPlug]

Other utilities are interesting analogies, but may not well apply to the electric grid.

In the case of water, weather/climate determines production in any given season. Humans may determine how to allocate that water, but the real costs is not the production of water, but that endeavor of distribution and those distribution system costs. We have next to no control of the amount of precipitation in a given season.

In the case of electricity, we do control production and really can decouple distribution/transmission costs form energy generation costs. In fact, there is a good argument to be made that distributed energy production, such as residential solar PV, decreases connection costs.

So the question is, what is an accurate distribution/transmission cost?