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CPUC NEM 3.0 discussion
- Thread starter jjrandorin
- Start date
California NEM 3.0 revisited, Commission seeks industry feedback
After heavy protest to the proposed solar net metering rates and fees, the CPUC now seeks comment on how an equitable, environmentally-sound, and economically beneficial structure can be created.
pv-magazine-usa.com
Utilities don’t make profit from energy sales. Utilities want people on certain rate plans to help levelize energy usage over the course of the day.
Energy costs are pass throughs for utilities. Whatever the cost of energy / fuels are, they don’t make a dime on it. Utilities make their money through capital investments (return on assets).
Here's the May 9, 2022 judge ruling to seek comments about:
1) The glide path and market transition credit to ease the transition
2) Changing NBCs on gross consumption instead of the per kW fixed cost fee
3) Community Distributed Energy Resources (DER) to better serve disadvantaged groups
The record of Rulemaking 20-08-020 will be resubmitted upon the filing of reply comments on June 24, 2022.
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The word "grandfathering" is not mentioned; so it seems the 15 vs 20 years thing isn't up for new comments. Being a pessimist, I feel like this means the proposed decision's 15 years on older installs may persist in the future revised NEM 3.0.
I don't see where this would replace the per kW fixed fee, this may be a new way to charge NBCs?
The rates are decoupled, but that is a bit of a misnomer. Their top line revenue is all revenue pulled in from rates charged to Customers. Their "investment" in assets is used to determine rates as we cannot let them lose money - can we?
stopcrazypp
Well-Known Member
Yeah, I don't see where it say it replaces the Grid Access Fee explicitly. However, in the footnotes page six it says: "3 Sierra Club Opening Comments on Proposed Decision Revising Net Energy Metering Tariff and Subtariffs at 12-13."
Page 10 of their opening comments says:
"B. The Commission Should Eliminate the Discriminatory and Illegal Grid Participation Charge and Replace it with Non-Bypassable Charges on Total Energy Use and Enrollment in Electrification Rates with a Fixed Charge Component Approximately Equal to Marginal Customer Costs."
https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M436/K665/436665095.PDF
I'm not entire sure however it's really that good a proposal. It essentially is a tax on total consumption (including what happens behind the meter), so there would need to be new meter that measures all consumption behind the utility meter. It is done this way to avoid violating federal law on discriminatory fees on producers.
For some case it may still end up as a per kW fixed fee, given the Sierra Club proposal says the following:
"While determining gross consumption could involve a separate meter, the Commission should ensure successor tariff customers have the option of using methodologies that avoid the added cost of separate metering and minimize administrative complexity, such as a per-kW charge based on average system performance."
Sierra club may suggest average system performance, but it may end up to still be based on system rating.
Yeah, it seems they want comments on some alternatives, without saying what they might replace or if they are new additions.
One difference from the per kW fixed cost fee is that any generation exported wouldn't be subject to these new NBCs. I wonder if charging a battery would be considered gross consumption, even if it is later exported? Without direct metering, determining the NBCs will be difficult. And in some topologies with multiple inverters going to different panels, metering could be complex.
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nwdiver
Well-Known Member
This fetish the CPUC has with charging for behind the meter consumption is idiotic. That's just going to encourage non-connected off-grid systems that can't import or export then everyone loses. They need to just find the right arbitrage and be happy buying for $0.05 and selling for $0.50. Heck.... charge a fee for exports if they want... electric rates do sometimes go negative.
RKCRLR
Active Member
I agree. The charge should be based on how much energy you use and when you use it, and a fixed connection fee based on your peak consumption; and that should be the same for everyone regardless if they have solar or storage. If someone feeds power back to the grid the compensation should be based on the value of that power at the time it was produced. If it has no value, so be it.
lets describe it this way. How does PG&E get Revenue? Thru your bill. How does you bill go up or down? Usage and Rates. That's it.
Use more electricity, your bill goes up. They raise their rates, your bill goes up. Your bill goes up, they make more revenue. Anything else is propaganda
Revenue does not equal profit so I don’t know what you are trying to say. If I pull in $200 of revenue and my costs are $200, I have $0 in profit. The rates are increased so they can recover all the costs they incur. Although rates are setup as variable rates, the costs they are trying to recover are also fixed costs for things such as T&D Infrastructure. So if someone puts solar panels on their roof, the utility doesn’t recover all the fixed costs they need to cover since energy sales decreased, so they need to increase the rates in the future to make themselves whole. I’m just stating facts and not playing the blame game against large utilities that we all need.
do you debate that their revenue is directly corresponding to your bill? Look at their income statement. They have Revenue and Cost of Revenue, the Operating Costs and then Net Profit. You use more Electricity, their Revenue goes up. They pay more fore Electricity generation, their gross profit goes down.
you are arguing against yourself. You said energy costs are a pass thru.
I think utilities are actually guaranteed a profit so yes, they always have profits since it's in their terms with the state I believe to have profits.
The whole IOI model is flawed I feel. Use no energy, they now have to raise everyone's rates to support all their costs. There is no benefit in conservation or use less, etc...Similar to healthcare, if everyone is healthy, hospitals goes belly up with no $$.
I think they should just tack on fixed grid support costs for all customers or better yet, city/municipalities should just take over the IOUs. We already know the CPUC aren't consumer focused at all and just rubber stamp everything. PG&E should have went under and broken up and bond holders/investors should have gotten pennies and those long term energy contracts torn up/failed.
I really hope this 20 year doesn't end up being a 15 year thing grandfathering thing. People talk about IOUs making capital investments for a grid and they need to recoup their investments. How about homeowners making capital investments on solar and the IOUs expect you to now pay even more and change the rules?
Solar has taken off so much due to a cash grab by utilities. If the IOU energy rates weren't so much more expensive that other utilities right next to them (Santa Clara Power, that place in Sacramento, etc), people wouldn't be trying to avoid the IOUs so much and installing solar/batteries or cut them off completely by going off grid.
agree
PG&E Revenue is Customers time rate plan time usage
Cost of Revenue id their cost of generation and buying power
Other operating costs are grid maintenance, customer service, marketing/sales, etc
Net profit is positive
PG&E makes money as more electricity is used. They are guaranteed more rate hikes as more grid maintenance is done
I'm playing a bit of devil's advocate here, but What'sUp is saying what the IOUs tell customers when they inquire about their bills.
PG&E and SCE both have said over the last few months that commodity and energy prices soared... driving up bills. The IOUs claim to simply charge the customer more that is exactly equal to the increased commodity price. In essence... yes PG&E will recognize more revenue due to the higher rate, but their profit is identical since they did not make margin on the more expensive energy charged due to commodity price changes.
PG&E simply makes a 10%-ish ROE on fixed investment and operating expenses. So if they can convince the CPUC to authorize $1Bn more of absolute trash investment (which is also funded by ratepayers), then they pocket a cool $100m to pay out as dividends to their shareholders.
So yeah, PG&E gets to talk out both sides of their mouth. Sometimes PG&E rates go up to support their rubbish inefficient operations. And Sometimes PG&E rates go up because the cost of natural gas and the CAISO energy market go up. Where PG&E gaslights people is by blaming commodity prices for almost all rate increases.
They always claim their revenue is set by the CPUC and they never take "excess profit". I posted about this in the past, but their simply saying "excess profit" is misleading. Most people consider profit to be an amount (or sum). But when PG&E says "excess profit" they mean profit margin or their ROE. While PG&E makes more absolute dollars when the CPUC authorizes PG&E to make scam/schill investments, the PG&E ROE is fixed. PG&E points to the fixed ROE and ignores the massive spike in total dollars they pay to shareholders.
That's why they want the $10Bn to go bury some powerlines in the next general rate case. They get an extra Billion profit if that proposal is approved. PG&E will continue to say they didn't get "excess profit" ... even though they just got an extra billion of pre tax profit dollars.
mspohr
Well-Known Member
Coalition received $1.7 million from three California utilities to push NEM 3.0, a rooftop solar ‘killer’
The Affordable Clean Energy for All coalition received payments from PG&E, SCE, and SDG&E to "stop the cost shift" and support the proposed (and since postponed) Net Energy Metering 3.0 decision.
pv-magazine-usa.com
California NEM 3.0 revisited, Commission seeks industry feedback
After heavy protest to the proposed solar net metering rates and fees, the CPUC now seeks comment on how an equitable, environmentally-sound, and economically beneficial structure can be created.
pv-magazine-usa.com
Indeed.
The technology for distributed solar and ESS is so good, basically, it can only be slowed down at this point. The state is going to have to figure out another way to pay for "the grid" since we need it. And by "another way" I mean a way other than charges per kwh used, especially peak v. non peak, since I have seen no data that peak rates actually, over the entire population, decrease peak usage in a material way.
That's because the utilities cannot survive if usage decreases, since usage pays for the grid, and the cost of the grid only can go up.
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