CPUC NEM 3.0 discussion

[nwdiver]

But that was my point solar owners aren't "contributing" anything to demand. Prior to getting solar when the sun is down they were using X and after solar when the sun is down they are still using X.

???? How are they not contributing to demand if 'after solar when the sun is down they are still using X.' Just because that capacity existed before they got solar doesn't mean it doesn't have to be maintained... there's still O&M costs. NEM at some point becomes unsustainable.

 

[nwdiver]

A demand fee would eliminate this disparity.

I don't understand how a demand fee would eliminate it any better than TOU.

 

[Southpasfan]

???? How are they not contributing to demand if 'after solar when the sun is down they are still using X.' Just because that capacity existed before they got solar doesn't mean it doesn't have to be maintained... there's still O&M costs. NEM at some point becomes unsustainable.

Yes, I sort of misread "contributing" you didn't mean "adding" to demand.

Anyway, yes, if it were only as simply as "ok, here's NEM 3.0, you get a credit on your overproduction for the wholesale cost of electricity, 3 cents."

Well, that would be a battle to the death since solar companies know no one saves money on that plan with just solar, and they don't want to go to 100% solar plus ESS and lose all of their solar only biz.

We should go to Solar plus ESS, or even just ESS, as a matter of public policy, my point is don't count on the utilities to somehow make this work through rate massaging.

 

[nwdiver]

We should go to Solar plus ESS, or even just ESS, as a matter of public policy, my point is don't count on the utilities to somehow make this work through rate massaging.

Of course. That's where the PUC comes in. If someone is ONLY using energy when solar and wind are abundant they should pay ~nothing. They're a grid asset. If someone is exporting when renewables are abundant and importing when they are scarce they need to pay something regardless of how much they exported.

 

[Southpasfan]

I don't understand how a demand fee would eliminate it any better than TOU.

So let me put my own numbers to it, from relatively sane LADWP.

So at about 25k kwh per year, (two evs plus mostly electric stuff), let's say before solar and PWs it was about $6k a year. It was probably more.

Averaged over the 20 year life of the system, which produces 27K kwh per year (LADWP never pays for overage but you do get 1 to 1 credit) the system costs about $4,000 per year.

I have minimal electric bills of about $300 per year.

But there are some more numbers.

At an average of 4 cents per kwh, sure, I used $1,000 less of energy per year from LADWP's view, but that's $1,000 less they had to source. So who cares.

The problem is, I also paid $5k less each year to support the grid, yet I am still connected to it.

That's like $400 a month. Now, I heard about a proposed $8 per installed kwh charge. Well, for me that would be 16.32 x $8 per month or $128 a month.

Well, that does make my whole personal energy system close to a wash, but that's not the point, maybe I would do it anyway.

My point is, that even charging me another $128 a month doesn't come close to the grid maintenance fees LADWP lost by me putting in a personal system.

Other than eliminating personal energy systems entirely, without gov support the utilities can't make it add up.

Which is why they are fighting so hard.

 

[iPlug]

What does the math look like if we lower off-peak rates to near wholesale, charge $0.25-1.00/kWh for peak rates, and charge something like $30/mo fixed grid fee for all? So same price to all customers (solar or not) and solar/any customers can sell back at same rate for same hour they would be charged. Customers free to add batteries and play the game however they like...

How would this (or not) shift costs to non-solar customers?

 

[STS-134]

That is what Texas has, and during the 2021 cold snap, the rates got pretty wild...

TX has half of that. They have the real time rates (or at least had them, when Griddy was still in business), they just didn't communicate them to customers in real time. What's the point of having variable rates to discourage usage during times of extreme shortages if you don't even tell people there's an extreme shortage/high prices so they know to cut back?

 

[skepticcyclist]

But that was my point solar owners aren't "contributing" anything to demand. Prior to getting solar when the sun is down they were using X and after solar when the sun is down they are still using X.

But many of us are, especially during the longer daylight months, and if we have battery backup.

For example I am currently sending all my solar to the grid during the peak from 4:00 to sunset, which can be as late as 8:00pm. I use a battery to run my entire house during peak time. So I am contributing to peak and using nothing from the grid during peak

 

[Southpasfan]

But many of us are, especially during the longer daylight months, and if we have battery backup.

For example I am currently sending all my solar to the grid during the peak from 4:00 to sunset, which can be as late as 8:00pm. I use a battery to run my entire house during peak time. So I am contributing to peak and using nothing from the grid during peak

Your're right, but I think he said "contributing to demand."

You are correct in you are "contributing to supply."

We should probably just dump the word "contributing."

 

[holeydonut]

Sunrun shares surge after company reports jump in customers, says higher utility prices are fueling solar

The largest residential solar company in the U.S. raised guidance for Q2 as soaring commodity prices make solar power more attractive.

www.cnbc.com

Who woulda thunkit…

 

[Southpasfan]

What does the math look like if we lower off-peak rates to near wholesale, charge $0.25-1.00/kWh for peak rates, and charge something like $30/mo fixed grid fee for all? So same price to all customers (solar or not) and solar/any customers can sell back at same rate for same hour they would be charged. Customers free to add batteries and play the game however they like...

How would this (or not) shift costs to non-solar customers?

From the utilities perspective. Lets say its a super low user of 600 kwh a month, half off peak.

Adding $30 bucks a month is like 150kwh at 20 cents.

Charging the 3 cents wholesale for the same 150 kwh is $4.50 or a total of 34.50 for the first 150 kwh of use, and another 4.50 for the next 150.

So "before" this customer is at $60 bucks for the first 300 kwh, after this new rate plan its $39.

So, the customer is $21 bucks ahead.

You didn't say what the "before" peak rate was, but lets say its 30 cents, and now, putting your insane $1 a kwh aside, its now 60 cents.

So, add 300 times 30 cents, $90 bucks, plus $60, for a total of $150.

After, this same customer is $39 bucks for the 300 off peak but add 300 times 60 cents $180 so instead of $150 (before) its $219.

Absent absolutely crazy ability to shift ones usage, this peak pricing does incentivize anything other than utility profits. Because all of this pricing is not based on the actual cost of electricity.

The short answer is that if you only give solar without ESS $3cents credit no one will install without ESS.

With ESS its the same BS "cost shift" because regardless of the rate plan the solar/ESS customer pays less for a grid they still use.

If you do this with 1,000 or more per month kwh usage the costs go up even more, obviously.

 

[iPlug]

...After, this same customer is $39 bucks for the 300 off peak but add 300 times 60 cents $180 so instead of $150 (before) its $219...

Right, the number ranges were mentioned, and you picked parameters within them - there is plenty of room for adjustment within similar parameters.

Absent absolutely crazy ability to shift ones usage, this peak pricing does incentivize anything other than utility profits. Because all of this pricing is not based on the actual cost of electricity.

Disagree on ability to shift usage, disagree that peak pricing incentivizes utility profits (utilities will always try to overcharge for anything -but that is a separate issue independent of peak rates).

It's not hard to do off-peak: clothes washing, dryer, dishwasher, pre-heat/pre-cool house, heat pump water heater, pool pump, charge EVs, induction cooking, microwave, etc. That's low hanging fruit. It's also ok to incentivize folks to upgrade/replace their old low SEER/HSPF with high SEER/HSPF heat pumps, insulation upgrades, ESS.

No need to rehash the pricing/actual cost of electricity - nwdiver already explained that marginal cost for electricity peak is real and much higher than wholesale rates would ostensibly imply.

The short answer is that if you only give solar without ESS $3cents credit no one will install without ESS.

Sure and that may be good. NEM 1 and 2 are grandfathered and should remain so because their systems were a lot more expensive than they are now and solar PV benefits to the grid have changed over time. There should be a NEM 3 -just not with the silliness utilities are asking for.

With ESS its the same BS "cost shift" because regardless of the rate plan the solar/ESS customer pays less for a grid they still use.

If this is true, it is because utilities are profiteering and charging fee structures that are directed only towards their profits. Their proposed "demand" charges are just more of that BS taken to another level. Better to work on solutions that appropriately reflect costs.

 

[yblaser]

TX has half of that. They have the real time rates (or at least had them, when Griddy was still in business), they just didn't communicate them to customers in real time. What's the point of having variable rates to discourage usage during times of extreme shortages if you don't even tell people there's an extreme shortage/high prices so they know to cut back?

Kind of like having a doomsday device and keeping it a secret.

 

[nwdiver]

That's like $400 a month. Now, I heard about a proposed $8 per installed kwh charge. Well, for me that would be 16.32 x $8 per month or $128 a month.

.... kW isn't kWh. Please take care with units especially when discussing TOU vs Demand. And that's a capacity charge not a demand charge. The proposal was $8/kW.

Also has nothing to do with what I'm referring to. Capacity fees are idiotic. There NEEDS to be some market signal to encourage use when renewables are abundant and discourage use when they are scarce. NEM fails to do that and so do capacity fees.

THAT is how the grid should be paid for.

 

[cwied]

I don't understand how a demand fee would eliminate it any better than TOU.

As a numerical example, assume a customer uses a steady 2 kW across the peak period from 4pm to 9pm. Assume there is about 2 kWh solar production during peak. Let's say the utility decides $.40/kWh is needed to pay for the grid. If the customer has solar, they $3.20, without solar they pay $4.00. If instead the utility decides to apply a $2/kW demand charge to fund the grid, they would pay $4.00 whether or not they have solar.

 

[nwdiver]

As a numerical example, assume a customer uses a steady 2 kW across the peak period from 4pm to 9pm. Assume there is about 2 kWh solar production during peak. Let's say the utility decides $.40/kWh is needed to pay for the grid. If the customer has solar, they $3.20, without solar they pay $4.00. If instead the utility decides to apply a $2/kW demand charge to fund the grid, they would pay $4.00 whether or not they have solar.

How are you arriving at $3.20 with solar? If you're using the grid less during those critical hours you SHOULD pay less regardless of whether you have solar or not. Someone with batteries and no solar that shifted their use from 4-9 to noon-4 should also pay less.

Let's say solar customers use on average 8kWh during that period and ~$4/customer/day is required to fund the grid. Ok... then why not make the rate $0.50/kWh. Why is $2/kW better to get the same funding? Utilities already do TOU. You think they should keep track of the daily peak during peak hours then take the average of that instead? ..... why?

This isn't just about ensuring sufficient revenue. It's also about structuring rates to encourage behavior that is easier on the grid.

 

[cwied]

Let's say solar customers use on average 8kWh during that period and ~$4/customer/day is required to fund the grid. Ok... then why not make the rate $0.50/kWh. Why is $2/kW better to get the same funding? Utilities already do TOU. You think they should keep track of the daily peak during peak hours then take the average of that instead? ..... why?

Because assuming there are 2 kWH of solar production during this period, the non-solar customer is going to pay $5 instead of $4, because they'll have used 10 kWh instead of 8 kWh. It seems to me the demand charge would incentivize keeping demand as low as possible during the peak hours while also correctly reflecting the burden solar customers place on the grid after the sun goes down.
By the way, I'm not saying they should charge only based on demand, just that the demand charge could be used in conjunction with a usage charge to correctly reflect the cost of maintaining a grid that is capable of meeting the demands of solar customers after sundown.

 

[nwdiver]

It seems to me the demand charge would incentivize keeping demand as low as possible during the peak hours

..... wouldn't a higher TOU rate accomplish the same thing? Shouldn't a non-solar customer using 10kWh during peak hours pay more than a solar customer using 8kWh?

And it comes out as a wash across the rate class. Should someone have to pay $40 for the day if they needed a quick 30 minute top-up charging their car at 20kW using 10kWh? Totally agree they should pay ~$0.50/kWh for using energy during peak hours $5 but not $40.

 

[cwied]

..... wouldn't a higher TOU rate accomplish the same thing? Shouldn't a non-solar customer using 10kWh during peak hours pay more than a solar customer using 8kWh?

And it comes out as a wash across the rate class. Should someone have to pay $40 for the day if they needed a quick 30 minute top-up charging their car at 20kW using 10kWh? Totally agree they should pay ~$0.50/kWh for using energy during peak hours $5 but not $40.

I guess I probably don't have the background to really debate this further. I do agree with your statements, so maybe there isn't any merit in my line of thought.

 

[getakey]

is there a new NEM3 proposal out for comment?