CPUC NEM 3.0 discussion

[sunwarriors]

Better yet, get the cost of electricity under control in California so it is cheaper for everyone.

This part is simply impossible because their income is tied directly to spending on infrastructure projects. I think they are guaranteed 10% profit of a project. Sorta like building a bridge to nowhere, there will always be a desire to build something if your livelihood is tied to it. This is impossible to alter I think in it's current state.

I didn't see the exact %, but it's clearly tied to building more infra. Will we ever see/deploy things that are beneficial, but not tied to an IOUs bottom line?:

SDG&E Is Making More Money Than Ever – Here’s Why

On Sunday’s Union-Tribune front page, reporter Rob Nikolewski wrote how and why SDG&E is making more money than ever. But it’s a “subscriber only” piece, and we’re…

obrag.org

"SDG&E officials say the rise in profits is primarily due to taking on more infrastructure projects to:"

IOUs ideally should be compensated based on some other factors in the future. Using less energy, higher conservation, smart energy usage/deployment. None of those factors help their bottom line so it's probably never going to happen unless we have major structural changes which doesn't seem to be on the table.

 

[RKCRLR]

This part is simply impossible because their income is tied directly to spending on infrastructure projects. I think they are guaranteed 10% profit of a project. Sorta like building a bridge to nowhere, there will always be a desire to build something if your livelihood is tied to it. This is impossible to alter I think in it's current state.

I didn't see the exact %, but it's clearly tied to building more infra. Will we ever see/deploy things that are beneficial, but not tied to an IOUs bottom line?:

SDG&E Is Making More Money Than Ever – Here’s Why

On Sunday’s Union-Tribune front page, reporter Rob Nikolewski wrote how and why SDG&E is making more money than ever. But it’s a “subscriber only” piece, and we’re…

obrag.org

"SDG&E officials say the rise in profits is primarily due to taking on more infrastructure projects to:"

IOUs ideally should be compensated based on some other factors in the future. Using less energy, higher conservation, smart energy usage/deployment. None of those factors help their bottom line so it's probably never going to happen unless we have major structural changes which doesn't seem to be on the table.

The whole profit being tied to projects creates problems. PG&E wanted to do more underground burial for wildfire prevention and pass the costs onto the customers but the CPUC said no. So now if a wildfire is sparked by wires that would have been buried is PG&E responsible? How can they be if they requested to do it but were denied?

 

[mspohr]

The whole profit being tied to projects creates problems. PG&E wanted to do more underground burial for wildfire prevention and pass the costs onto the customers but the CPUC said no. So now if a wildfire is sparked by wires that would have been buried is PG&E responsible? How can they be if they requested to do it but were denied?

They weren't denied. They can still bury wires.
CPUC just said that they couldn't charge customers to fix their negligent shoddy infrastructure.

 

[RKCRLR]

They weren't denied. They can still bury wires.
CPUC just said that they couldn't charge customers to fix their negligent shoddy infrastructure.

Yes but where is the money supposed to come from? The CPUC let it get this way in the first place. You could say the stockholders but it isn't going to happen, the costs are too high. Ultimately if something isn't fixed there will be another bankruptcy. I think if something like this wound up in court and PG&E said we wanted to bury the lines but were told that they couldn't charge customers to do it that the court would side with PG&E.

 

[Redhill_qik]

Yes but where is the money supposed to come from? The CPUC let it get this way in the first place. You could say the stockholders but it isn't going to happen, the costs are too high. Ultimately if something isn't fixed there will be another bankruptcy. I think if something like this wound up in court and PG&E said we wanted to bury the lines but were told that they couldn't charge customers to do it that the court would side with PG&E.

I grew up in NH with lots of rural customer, lots of trees and nearly every line was overhead and I can't recall any wild fires. I do recall the utility (PSNH then now Eversource) regularly going along and trimming back tree growth every 2-3 years which is the basic maintenance that PG&E wasn't doing in recent years.

 

[cali8484]

Yes but where is the money supposed to come from?

IOU investors?

 

[RKCRLR]

I grew up in NH with lots of rural customer, lots of trees and nearly every line was overhead and I can't recall any wild fires. I do recall the utility (PSNH then now Eversource) regularly going along and trimming back tree growth every 2-3 years which is the basic maintenance that PG&E wasn't doing in recent years.

I grew up in northern California foothills (Nevada City area) and we never had wildfires like we do now, times have changed. Fires just didn't get as big as they often do now and I don't think PG&E did any more maintenance then than they do now. I'm not a PG&E fan but it is like filling a room with gasoline and then blaming PG&E for the spark that set it off.

 

[RKCRLR]

IOU investors?

You could try to make the investors directly responsible for the costs without customer compensation but it isn't going to happen. And if you did investors would flee the stock and PG&E would likely wind up in bankruptcy again. Perhaps that is better but we would likely wind up just bailing them out again.

 

[mspohr]

You could try to make the investors directly responsible for the costs without customer compensation but it isn't going to happen. And if you did investors would flee the stock and PG&E would likely wind up in bankruptcy again. Perhaps that is better but we would likely wind up just bailing them out again.

Would be good for them to go bankrupt and have the state take them over.
The state couldn't do worse than PGE.

 

[RKCRLR]

Would be good for them to go bankrupt and have the state take them over.
The state couldn't do worse than PGE.

I'm not convinced of that, I've never been impressed when dealing with the state bureaucracy. PG&E is "regulated" through the CPUC and the CPUC let them get to this point in the first place.

I'll give an example of my personal dealings. When I built my house I was required to put in a certain percentage of high efficacy lighting. I was forced to put in a bunch of fluorescent lighting. Additionally I wasn't allowed to install standard lighting cans and use CFLs. They had to only accept fluorescent lights (I actually had to put in more lighting than I needed to offset some pendant lights I had with standard bulb threads). Now California has banned the sale of fluorescent lights. So I need to replace some fixtures or bypass the ballasts and install adapters so I can switch over to LEDs. If I had been allowed to put in standard fixtures with CFLs it would have been a lot easier and cheaper to convert to LEDs.

I agree that California needs to do something but putting a California bureaucracy in charge of the details isn't the answer.

 

[iPlug]

Would be good for them to go bankrupt and have the state take them over.
The state couldn't do worse than PGE.

Would go a step further and argue PG&E should then be broken up into municipalities. Our adjacent sister city of Roseville has nearly identical geography, demographics, and housing development/density. We in PG&E land pay much higher electricity rates and have worse service.

 

[RKCRLR]

Would go a step further and argue PG&E should then be broken up into municipalities. Our adjacent sister city of Roseville has nearly identical geography, demographics, and housing development/density. We in PG&E land pay much higher electricity rates and have worse service.

I agree that would be better than the state running them. I was with SMUD for years and the rates were great compared to PG&E. The problem with the municipalities is they are good in densely populated areas but not in rural areas where there is more infrastructure per capita.

 

[Redhill_qik]

I grew up in northern California foothills (Nevada City area) and we never had wildfires like we do now, times have changed. Fires just didn't get as big as they often do now and I don't think PG&E did any more maintenance then than they do now. I'm not a PG&E fan but it is like filling a room with gasoline and then blaming PG&E for the spark that set it off.

Global warming is changing environmental conditions and fires will get larger and spread more quickly in drier conditions. These changes aren't just happening in California and to the best of my knowledge, there haven't similar utility originated wildfires in our neighboring states of Oregon, Nevada or Arizona that have similar environments.

The PG&E Zogg file in 2020 was due to a pine tree that fell on a PG&E distribution line and that tree was one of two that were marked for removal, but never removed or the San Bruno gas pipeline explosion that was due in part to an inadequate pipeline integrity management program. The issue isn't from unavoidable events such as lightning strikes or earthquakes, but from avoidable events that are caused by shirking maintenance responsibilities that were mandated and rate payers were already paying to be done.

 

[cali8484]

You could try to make the investors directly responsible for the costs without customer compensation but it isn't going to happen. And if you did investors would flee the stock and PG&E would likely wind up in bankruptcy again. Perhaps that is better but we would likely wind up just bailing them out again.

Exactly. The state needs to take over.

 

[RKCRLR]

Global warming is changing environmental conditions and fires will get larger and spread more quickly in drier conditions. These changes aren't just happening in California and to the best of my knowledge, there haven't similar utility originated wildfires in our neighboring states of Oregon, Nevada or Arizona that have similar environments.

The PG&E Zogg file in 2020 was due to a pine tree that fell on a PG&E distribution line and that tree was one of two that were marked for removal, but never removed or the San Bruno gas pipeline explosion that was due in part to an inadequate pipeline integrity management program. The issue isn't from unavoidable events such as lightning strikes or earthquakes, but from avoidable events that are caused by shirking maintenance responsibilities that were mandated and rate payers were already paying to be done.

I agree with all that, the problem is trying to claw that back. The CPUC let this happen and now were trying to close the barn door after the horse is gone. It's like the parents let the kids run amuck and they broke something. The parents are the ones held responsible.

 

[RKCRLR]

Exactly. The state needs to take over.

Then we can have the efficiency of the DMV.

 

[Redhill_qik]

I'm not convinced of that, I've never been impressed when dealing with the state bureaucracy. PG&E is "regulated" through the CPUC and the CPUC let them get to this point in the first place.

I'll give an example of my personal dealings. When I built my house I was required to put in a certain percentage of high efficacy lighting. I was forced to put in a bunch of fluorescent lighting. Additionally I wasn't allowed to install standard lighting cans and use CFLs. They had to only accept fluorescent lights (I actually had to put in more lighting than I needed to offset some pendant lights I had with standard bulb threads). Now California has banned the sale of fluorescent lights. So I need to replace some fixtures or bypass the ballasts and install adapters so I can switch over to LEDs. If I had been allowed to put in standard fixtures with CFLs it would have been a lot easier and cheaper to convert to LEDs.

I agree that California needs to do something but putting a California bureaucracy in charge of the details isn't the answer.

The mandate for fluorescent bulb format fixtures versus CFL that screwed into a standard A19 socket was to prevent people/builders from switching back to incandescent after the permit inspections. The rise of LEDs as a lower cost, lower wattage, longer lifetime alternative to CFLs that have higher environmental waste concerns just wasn't foreseen.

When my fluorescent tubes died in the garage, I replaced them with an LED tube. I have a couple of remaining CFLs for the cans in the kitchen and bathrooms, but when they go I need to find a good PL-C LED replacement or go into the ceilings to bypass the balast an install flush LED cans. Not a lot of PL-C LED options, but hopefully that will improve over time.

 

[Dave EV]

Yes but where is the money supposed to come from? The CPUC let it get this way in the first place. You could say the stockholders but it isn't going to happen, the costs are too high. Ultimately if something isn't fixed there will be another bankruptcy. I think if something like this wound up in court and PG&E said we wanted to bury the lines but were told that they couldn't charge customers to do it that the court would side with PG&E.

Like any organization, they should be focused on doing things more efficiently and getting more work done by spending less money.

Beating a dead horse, but when your profit is dictated by how much you spend without any real guardrails on how efficiently you do it, you end up with a bloated mess of an organization.

On one hand, the utility can't just decide to raise rates to increase profit margins.

One the other hand, they also can't just decide to do more with less, because that decreases overall profits.

Unless you somehow manage to get management in place that strives to do things more efficiently, you end up gradually increasing costs. Boiling a frog, so to speak.

 

[dakhlkt22]

Like any organization, they should be focused on doing things more efficiently and getting more work done by spending less money.

Beating a dead horse, but when your profit is dictated by how much you spend without any real guardrails on how efficiently you do it, you end up with a bloated mess of an organization.

On one hand, the utility can't just decide to raise rates to increase profit margins.

One the other hand, they also can't just decide to do more with less, because that decreases overall profits.

Unless you somehow manage to get management in place that strives to do things more efficiently, you end up gradually increasing costs. Boiling a frog, so to speak.

PG&E recently applied to raise rates to cover an aggressive campaign to bury cables and thereby reduce fire risk. The request was denied, and PG&E was forced to dial back its plans to bury cable. That's actually a case where PG&E wanted to be conservative on safety, and regulators said it'd be too expensive for consumers.

That doesn't strike me as deciding "to raise rates to increase profit margins." A regulated utility has a fixed profit margin by law, and they have to get regulator approval for their spending plans. They can't increase profit margins per se. I think they can make higher profits unexpectedly, but they can't propose plans to increase their profits.

 

[miimura]

PG&E recently applied to raise rates to cover an aggressive campaign to bury cables and thereby reduce fire risk. The request was denied, and PG&E was forced to dial back its plans to bury cable. That's actually a case where PG&E wanted to be conservative on safety, and regulators said it'd be too expensive for consumers.

That doesn't strike me as deciding "to raise rates to increase profit margins." A regulated utility has a fixed profit margin by law, and they have to get regulator approval for their spending plans. They can't increase profit margins per se. I think they can make higher profits unexpectedly, but they can't propose plans to increase their profits.

The problem is the the line burial project is exactly the kind of thing that PG&E is guaranteed 10% return on. I would be all for it if they did more of this safety related work for 5% return to shareholders.