SageBrush
REJECT Fascism
I recommend that all interested attend a few local utility meetings. The approach goes like this:
Our budget is X
Our revenue is Y
X > Y
Which rate payer classes do we stick for the difference ?
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California Utilities Plan All Out War On Solar, Please Read And Help
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- Start date
I recommend that all interested attend a few local utility meetings. The approach goes like this:
Our budget is X
Our revenue is Y
X > Y
Which rate payer classes do we stick for the difference ?
I think that most customers and utilities want to have a reasonable surety of month-to-month costs and the demand cost model has more uncertainty than other models to cover the fixed by grid costs.
Basing the charge on the size of the service is a quick and simple method. Yes, most service is oversized for the actual usage which IMHO makes it fair across the board and it is a simple concept to understand and implement.
An alternative that I have proposed is a backwards looking peak demand, which is a model that my water utility uses to set fixed sewer rates my taking the average water usage for three lowest winter months to estimate actual sewer flow versus irrigation in the summer. Applying this model to electric, would be something along the lines of average imported kWh per day for the highest imported kWh month. My concern with this approach is that it would likely still favor solar customers more than maybe it should.
SageBrush
REJECT Fascism
Utilities want to recoup+ infrastructure investments. A large service does not only mean a larger wire and meter, it also means a larger transformer since the utility must size the transformer for the possible load.
I don't want to come off as a utility apologist since I am a harsh critic most of the time but people here are barking up the wrong tree. The demand pricing model in its residential incarnation is meant to rationalize the spot market energy prices. I support it because it happens to push people towards clean energy consumption. It has little to do with infrastructure
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I'm kind of confused by your position. The IOU's in both California and Florida have both used the exact issue in their latest NEM proposals. They argue that the demand pricing model includes a significant portion that is directly intended to address infrastructure costs.
For the California IOUs, they delivered analysis that claimed on average, a detached home that did NOT have solar energy was paying approximately $37 to $55 per month of infrastructure fees. Naturally this non-solar household was paying this "grid benefit charge" on average through their demand pricing model.
So, the IOUs proposed amortizing those same monthly infrastructure costs against the average solar array size of 5 kW (DC). The IOU's proposal would require the average customer who installed solar to continue to pay this fixed cost fee by de-coupling the fee from the demanded energy, and simply make it a constant cost for the life of the solar/NEM agreement. The IOU's went so far as to say this was a benefit to the homeowner since this would "lock in" the fixed cost fee for decades.
This was the crux of the fixed cost shift argument; where the IOUs say the grid isn't being adequately subsidized by solar customers.
Anyway, I do agree with you that the demand pricing model is what drove many people to installing solar. The easiest way to "reduce demand" for a residential homeowner is to simply generate their own power at their home. And the irony is then the IOUs are unhappy about that so they want future policy to make residential solar punitive.
I see it mostly the same way in that we are asking the utility to have the infrastructure in place from the inter/intrastate wide grid, to city wide distribution, to the 0neighborhood/house transformer to supply power when we need it. There is a cost to maintain this regardless of the amount of energy that is flowing through the system.
Having this cost distributed among customers based on their actual usage was a reasonable approach when 99% of people were just consumers, but as more and more become both a consumer and producer this needs to change. The change should be across all residential customers and not just targeted at solar to correctly reflect the cost model.
Yeah, if the IOUs, the CAISO independent operators, and the CPUC actually had to execute the grid as a public good (instead of a perpetual grift), they would have been thinking about how to pivot away from their century-old centralized energy model and into DER many decades ago. But they basically just thumbed their noses and kept bumping up their old investment models, raising rates, and paying big dividends.
And now that we have a grid that is buckling under climate change, infinite fire season, and extreme peak time usage, they somehow blame residential solar for the problem.
Fun read from 20 years ago... this is about Gas-Fired DER. But even with the dino farts being proposed instead of "evil solar/wind renewables" (I'm imagining that's what Ted Cruz calls solar and wind), this didn't get much traction.
cpa
Active Member
I won't get into a discussion with the experts. I will say, however, that PG&E territory covers a vast swath of California with unequal and uneven electricity usage.
You are in Los Altos, and from my personal experience hanging around the Peninsula, that winters are mild enough. Summers might have some temperatures in the 90s by late July for about four-five weeks. Nights cool off quite nicely. Many smaller homes can use window units to cool during that stretch of summer.
Monterey does not get many hot days, or for that matter, Morro Bay. They have lots of fog, so will have more heating needs than cooling needs.
Then we get the wonderful interior valleys of California. Winters need heating early in the mornings. Generally with enough fenestration the sun will provide enough warmth to maintain comfort without artificial heating by noon. Summers are another story. As I type this, the temperature is 92 at 1:00. By 5:00 it will be 105, cooling down to 72 tomorrow morning. Zero wind. At least the dread inversion layer has not settled over the Valley, but it is coming soon.
We cannot forget all the mixed weather in the foothill areas or along the North Coast either.
I guess my point is that the utilities want to have one rate system for widely different usages and needs. TOU sucks big time here in the San Joaquin Valley, but probably is the greatest idea since sliced bread along the Coast because there is no real need for electricity beyond lights and small appliances once the peak rates kick in during the afternoon.
The time for "one size fits all" utility rate assessments is past. Time for another look at how utilities figure their tariffs and implement them so that the fewest number of people get hosed. You cannot throw the coastal crowd together with the valley crowd, the foothill crowd, and the North Coast crowd any longer. And the basic tiered rates with the baselines based upon geography is long in the tooth too. Those baselines are not even close to approximating adequate needs for the tiniest of homes. They are illusory these days.
To me, this is an argument in favor of breaking up PG&E. I'm all for it.
IMHO, the bankruptcy was a missed opportunity for meaningful change. PG&E probably lobbied hard for political paralysis and got it.
Your points all go back to we need to look at energy needs/uses locally. Local or at least smaller municipal solutions can't be much worst than PG&E. Like miiumura says, their bankrupcy was the perfect time to fix things and just possibly carve them out.
Things like the rural areas maybe can shift away from long transmission lines and design locallized solar, energy storage at a big scale. I assume they have lots of land being rural.
The problem has always been there are workers at the IOUs who's goal is to understand how the company makes money. It's all capital projects so that's what they do without thinking. More capital projects = more jobs, more bonuses, more profits. When someone is gaming the system and the only one (since the CPUC is a rubber stamp paid off by said IOUs), you're never going to have a good system. It's all about get all you can now and leave if there's a problem and it's someone elses problem.
Also, I also find it unfair that after someone spends $25k-$50k for solar, they now don't factor that someone already paid for energy upfront and just want to wide brush charge all those folks too. If PG&E rates (and many IOUs) had lower prices, no one would've done solar as much at this scale.
I don't think PG&E's problems can be solved with tariffs and the volumetric rates. To me, the solution first lies in how the IOU is compensated and regulated. They simply cannot be allowed to continue with a centralized energy generation -> Transmission -> Distribution model where all the cards sit behind the murky veil of the old business models. All the IOU needs to do is rationalize behavior and then charge rates from people who have zero say in the matter.
We eventually need some form of decentralization of the PG&E network. Plus some incentive based regulation to get PG&E to act smarter/better to find ways to deploy capital intelligently. Instead of incentivizing PG&E to plow billions into their operating costs so they can make a 10% ROE until we're all dead and buried.
This NEM debate (edit: the debate between the IOUs and CALSSA/SEIA) makes me sick because the IOUs got rate payers to look at the "fixed costs" and point fingers at one another to figure out who should be paying their fair share. The IOUs split up the California homeowners to attack one another. We should all be pointing our fingers back at PG&E and demanding them get their costs down by rethinking how energy should work in 2025 and beyond.
That General Rate Case (GRC) that PG&E submitted last year shows they want to spend like $30 Bn extra dollars over 3 years for all sorts of stupid stuff to keep their old grid model alive. The only business model that gets away with this BS is the IOUs... since ratepayers have no choice or say in the matter.
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SageBrush
REJECT Fascism
The IOUs are obscuring the conversation. The old way is to tack on their cost of business to volumetric pricing. Their cost is an amalgam of infrastructure, corporate bloat, corporate advertising and lobbying, profit, and cost of energy. In the absence of consumption their revenue deflates so their conclusion is that the solution is to decouple charges from consumption.
It is fundamentally wrong to penalize conservation, and it is fundamentally wrong to penalize clean energy production that reduces fossil generation.
I don't disagree with the argument that infrastructure costs should be decoupled from consumption but the IOU's are burdening that donkey with a lot more that, and harming the transition to clean energy along the way.
SageBrush
REJECT Fascism
To continue my rant for a moment ...
The utility argument towards the home PV with excess generation boils down to this: "we think clean energy has the same wholesale value as energy from fossils."
Any PRC/PUC tasked with community value should reject that argument out of hand since it ignores the externalized costs of carbon emissions and other pollutants.
The utility argument towards the home PV with excess generation boils down to this: "we think clean energy has the same wholesale value as energy from fossils."
Any PRC/PUC tasked with community value should reject that argument out of hand since it ignores the externalized costs of carbon emissions and other pollutants.
Ok, but aren't wholesale rates paid to solar farms lower than wholesale rates paid to a natural gas plant?
SageBrush
REJECT Fascism
Sometimes, although even then you have to know the nitty gritty details surrounding land use and connection for an honest accounting. To answer what I think you are getting at, I have no problem with a utility choosing the cheapest clean energy it can buy.
CrazyRabbit
Active Member
if the utility "has to buy" your excess solar during the day at full retail, then i think it is fair that you should pay a higher rate in the evening then people without roof top solar.
I have said this many times before - if the IOUs want to devalue solar, then make a new tariff that has a Super-Off-Peak from 10am-2pm and push down the price. I wouldn't even mind if they forced solar customers onto rate plans with this "feature". That's far more tolerable than retracting the 20 year NEM term guarantee. However, they can't complain when people choose to use more during that period too.
Maybe we'll just all go off grid after NEM1.0/2.0 expires for each individual (for power at least). I can't see how there are many solar installs once NEM3.0 is live with some of the bad terms listed. Grab your popcorn watching all the jobs go poof and maybe a year after that, we'll see they went too far. (That and no new homes will do solar since the terms are so bad).
Isn't that what they wanted in the NEM 3.0 PD? The ACC rate is a "super of peak" value of solar worth about $0.03 per kWh around 1am to 2pm. That's effectively the spot/wholesale value of solar at that time. The ACC rate gives you no transmission credit on NEM; it's a pure spot wholesale generation estimate for the cost of the rooftop solar power at that time.
ACC is a export credit model. I'm saying the total rate on the tariff should have a Super Off-Peak period. If they want to have NBCs, that's fine but I think the fair value is the Tariff Generation Rate. I don't know how the Generation Rate compares to the ACC rate proposed.
This could be could be converted to an almost completely market driven industry except for the local neighborhood grid. Anyone who wants to sell power to my neighborhood will have to pay a carrier for the transmission. In my neighborhood, there will be no transmission costs. This way we can compare the actual cost of delivering electricity to me. I will buy the cheaper electricity. In many cases, this may be my solar panels or my neighbor's solar panels. Eventually, pricing should be dynamic. The price is determined by the market. During the day when the sun is out, electricity will be almost free. In the evening, it will be expensive. Some people will use batteries to shift energy from the middle of the day to the evening. Many EVs now how bidirectional charging. I wish Tesla did. Then you could charge your car at home or at work in the middle of the day when electricity is cheap. You can then discharge the energy from your car in the evening and at night when electricity is more expensive.
There would need to be a small charge to maintain the local grid. Probably similar to the price of a phone line. Maybe $10-$20/month. All other prices would be determined by the market.
There would need to be a small charge to maintain the local grid. Probably similar to the price of a phone line. Maybe $10-$20/month. All other prices would be determined by the market.
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