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CPUC NEM 3.0 discussion

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Today's NPR "On Point" was about this issue. Both experts seemed to agree that the way utilities charge has to be restructured.

I was disappointed that despite having an hour to yak about this, and on public radio no less, no one pointed out that a system that pays for "the grid" based on a per unit cost for "energy" as to which only 20%$ is for the actual "energy" simply cannot withstand any large level decrease in usage.

And since rooftop solar is one of the most effective ways to decrease usage, well, its in the cross-hairs.

There was a lot of hand wringing about what to do. One guy said just pay for "the grid" some other way then through energy pricing, but it was not really explained that well.


You shoulda called in.

To join the conversation on the air, call On Point at 1-800-423-8255
 
This article adds more info about this guys BS claim for damages due to his high bill. This article places some blame on solar policies driving up his bill.

It’s unfortunate the utilities have terminated the programs to help a homeowner audit energy usage.



San Diego does have the largest energy bills in the nation now. Hawaii charges less than us even. Sempra Energy had a near $9+ billion profit last year.

I still think until the structure changes where these should not be for-profit shareholder owned companies, nothing will change.

News report on youtube:
"San Diego has highest electricity rates in the country"
 
San Diego does have the largest energy bills in the nation now. Hawaii charges less than us even. Sempra Energy had a near $9+ billion profit last year.



And if they earned 10.23% on all those juicy solar tax revenue proposed in NEM 3.0, they'd have $10 Bn of profit last year.

Wealthy solar a-holes have cost the IOU's billions of profits! News at 10.
 
After the huge pushback from the public, the CPUC has decided to kick the can down the road and has taken NEM 3.0 off its calendar indefinitely to study the issue more.

Given how much Governor Newsom seems to want to avoid this issue, I wonder if they'll push a decision until after November so he can continue to duck and cover through the election.

 
They better recalculate if they get something like NEM3

"In the 20-year outlook, the energy agencies accounted for the resources needed to meet California’s 2045 goals and put together a “starting point” scenario, which took into consideration CAISO’s forecasted 2040 peak load, subtracted the contribution of forecasted behind-the-meter resources, and then factored in a projected reduction of 15,000 MW of natural gas-fired generation. "

 
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I would prefer a fixed fee with lower usage rates, but otherwise I think that it is decent compromise.
Sierra Club is proposing something like that - their analysis is decent:


Key proposals:
  • Eliminate the $8/kW solar fee.
  • Add a base-connection fee (eg $12-16/mo) for all customers - this also has the benefit of reducing the cost of electrification as people install more heat pumps, electric appliances and charge electric vehicles - kind of like how the SDG&E EV-TOU-5 rate does vs the EV-TOU-2 rate.
  • Add a non-bypassable charge (NBC) for gross consumption
The third item I have some issue with, as trying to calculate that would require an additional meter in a lot of cases and adding meters is expensive. Also I think that if you avoid using the grid as a battery by installing your own battery, you should not have to incur NBCs.
 
Sierra Club is proposing something like that - their analysis is decent:


Key proposals:
  • Eliminate the $8/kW solar fee.
  • Add a base-connection fee (eg $12-16/mo) for all customers - this also has the benefit of reducing the cost of electrification as people install more heat pumps, electric appliances and charge electric vehicles - kind of like how the SDG&E EV-TOU-5 rate does vs the EV-TOU-2 rate.
  • Add a non-bypassable charge (NBC) for gross consumption
The third item I have some issue with, as trying to calculate that would require an additional meter in a lot of cases and adding meters is expensive. Also I think that if you avoid using the grid as a battery by installing your own battery, you should not have to incur NBCs.

The problem is that they're trying to have their cake and eat it too. They want to encourage solar while ensuring that people that can buy solar don't disproportionately benefit from have solar... the $8/kW fee is meant as a lazier NBC that doesn't require additional metering.

The real objective is to ensure wealthier people aren't dodging financial support for the grid while not crippling the solar industry. Why not have a surcharge on high value homes? I'm betting there are a lot of $10M+ homes that just don't want the 'blight' of solar panels and wouldn't notice/care paying $5/kWh. Seems like that would be a win-win. Provide a YUGE incentive to get solar and collect additional revenue...

What I find frustrating about this nonsense is for some reason the 3 facts...
  1. People with solar pay less into the grid.
  2. The grid needs more revenue support.
  3. Low-Income people shouldn't pay more.
For some reason lead to the absurd conclusion that solar producers should pay more. Really? No other revenue sources that don't disproportionally hurt low income people?
 
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The federal tax credit at the current rate, and say a typical installation cost of $4/ DC watt, is worth about $1/ watt or $1k per DC kw of panels. Over say 20 years, that's about $50/year per kw credit, or ~$4/kw per month. Rather than letting it phase out, as currently scheduled, they should keep in place with an income phase-out, so that it still provides a generous incentive for lower income households. Meanwhile, upper-middle to wealthy individual need to figure how to make it worth it with that relative increase compared to today's costs, or else the industry needs to make themselves more efficient to bring prices down further (let the free market drive cost efficiency).

Now I know those tax credits are being offered at the federal level, so keeping or removing them does nothing to help California pay for their grid. I'm just saying there's a big thing sunsetting in two years, that's equal to at least half of this proposed onerous $8/kw/month solar tax, and no one on either side is even factoring this big change in to their financial arguments.
 
They better recalculate if they get something like NEM3

"In the 20-year outlook, the energy agencies accounted for the resources needed to meet California’s 2045 goals and put together a “starting point” scenario, which took into consideration CAISO’s forecasted 2040 peak load, subtracted the contribution of forecasted behind-the-meter resources, and then factored in a projected reduction of 15,000 MW of natural gas-fired generation. "

Yep. And CAISO doesn't analyze the potential cost savings from INCREASING distributed solar and batteries to avoid the need for some of their modeled transmission costs. It's frustrating how much tunnel vision the responsible CA agencies seem to have.
 
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After the huge pushback from the public, the CPUC has decided to kick the can down the road and has taken NEM 3.0 off its calendar indefinitely to study the issue more.

Given how much Governor Newsom seems to want to avoid this issue, I wonder if they'll push a decision until after November so he can continue to duck and cover through the election.


Explains why sunrun stock is popping after hours. I should have bought more of their stock so I can pay my upcoming $500 natural gas bill.
 
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Main issue remains that the IOUs charge double what everybody else is charging for electricity. Should our rates be in line with the rest of the country, we wouldn't need to have this talk about equity. If we want to support CA residents who make less, there are plenty of existing avenues for income redistribution in CA (one could say that this is a California specialty).

For once the Sierra Club got something right. Make the rates partially fixed for all (I vote for a $30/month access fee) and lower the volumetric rates commensurately. This solar tax is a complete non starter.
 
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After the huge pushback from the public, the CPUC has decided to kick the can down the road and has taken NEM 3.0 off its calendar indefinitely to study the issue more.

Given how much Governor Newsom seems to want to avoid this issue, I wonder if they'll push a decision until after November so he can continue to duck and cover through the election.

Completely. You can bet Newsom would probably be voted out if he approved NEM3.0 as is. Not so much because of the "rich" solar owners, but the 40k+ loss jobs, plus probably all the other things tied to it like basic restaurants, etc due to this one change.

If there's one thing we can always have faith in is politicians will always do things to get re-elected and companies like $$.

From that article, I'm starting to think the CPUC IS actually part of the problem. We know publicly traded for profit companies are in it for profits, everyone else be damned, but the CPUC seems too quick to approve any rate rises with little accountability.

I still want to see a breakup of all the major utilities honestly. Turn them all non-profit and local/community based.
 
It's frustrating how much tunnel vision the responsible CA agencies seem to have.

When someone else is paying the bill, it's easy to have tunnel vision.

Look at our healthcare, it's completely inflated what we pay vs. every other industrialized nation out there. I've seen hundreds of thousands in medical bills and the bill was much lower due to insured limits. One reason why high medical bill = bankruptcy for people (with no insurance).
 
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There should be penalties on high usage customers. I know of a residence in the Bay Area that uses $5k of electricity a month and they have no solar. They "don't care' but they use more power than the entire block. House is only 6K sq feet and lots of gas appliances.


It sounds like this $5k monthly bill could be for the house that has 8 EVs and counting? o_O
 
They better recalculate if they get something like NEM3

"In the 20-year outlook, the energy agencies accounted for the resources needed to meet California’s 2045 goals and put together a “starting point” scenario, which took into consideration CAISO’s forecasted 2040 peak load, subtracted the contribution of forecasted behind-the-meter resources, and then factored in a projected reduction of 15,000 MW of natural gas-fired generation. "

I tried to read the full CAISO outlook document, but it is really quite a mess with tables that have widely different components and no simple comparisons between 2021, 2031 and 2041. The article does say this:
including utility-scale solar, energy storage, offshore wind, energy storage and out-of-state clean energy — to the system by 2040, in order to meet the rising demand for electricity
Table 3.1-1 does show a roughly 30% increase in the peak consumption form 2031 to 2040, but for 2031 it is labelled CEC Peak and for 2040 it is SB-100 Peak, so it isn't clear that these are equivalent. If the load is expected to increase and that is why we need more transmission lines and more generation then why is distributed solar a parasite on the grid again?

I'm not fully on board with that question, but it is difficult to conclude otherwise based on the scatter shot of information that is being made available. I found a CAISO Peak Load History document and most of the days in late August or early September and from 15:00-18:00 (3:00pm-6:00pm). Solar generation is declining during these times, but still contributing to the grid.
 
There should be penalties on high usage customers. I know of a residence in the Bay Area that uses $5k of electricity a month and they have no solar. They "don't care' but they use more power than the entire block. House is only 6K sq feet and lots of gas appliances.
If they are still on a tiered tariff like E-1 (pure tiered) or E-6 (TOU and tiered) then they would be getting increasing higher costs (penalties) with increased usage. These tiered tariffs are going away at the of year as everyone is getting moved to pure TOU plans.

Edit: Actually E-TOU-C (I'm on this) is also tiered and the difference is the same E-6 (0.08206 higher when you go above the baseline of ~10.5kWh/day)
 
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