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Proposed "Reserve Capacity Charge" in Colorado

Discussion in 'Energy, Environment, and Policy' started by stevezzzz, Dec 3, 2013.

  1. stevezzzz

    stevezzzz R;SigS;P85D;SigX

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    #1 stevezzzz, Dec 3, 2013
    Last edited: Dec 3, 2013
    My local electric utility here in Colorado (unitedpower.com) is proposing to add a "Reserve Capacity Charge" for small, net-metered generation systems like my rooftop solar PV system. They've been doing this since 2009 for larger net-metered generating units (defined as 'over 25kW' of rated capacity); this proposal just extends the tariff to all net-metered accounts, to be phased in over a three-year period. The proposed first-year rate is $1.74 per kW of installed generation capacity, more than twice what the AZ utility plans to charge (see this thread); the utility didn't provide any information about the rates in subsequent years. My monthly utility bill already includes a $13 Facility Charge: according to the 'Understanding My Bill' web page, "This monthly charge covers the operational expenses to provide and maintain the equipment and lines needed for electric service at your location."

    By the way, my 4.76 kW (rated) system generated 7032 kWh of energy in 2012, the last full year for which I have data. That's an average of 0.802 kW, or not quite 17% of rated capacity, for which they propose to charge me $8/mo the first year and more after that. At our current per-kWh cost of $0.1091 (flat rate; there are no TOU differences and no tiered rates that I will ever reach), that $8 represents 15% of my average monthly electricity production, and pushes my system payback out by some number of years (I'm too financially challenged to figure it out, and it's probably moot: I'll be long gone; and it's not why I bought the system, anyway).

    I have the opportunity to comment at the utility's public Board meeting a week from Friday (Dec 13). I'd like to hear from the brain trust here what arguments I might bring to bear to fight the new charge (or the size of the new charge; or even whether or not I have a leg to stand on). I'm fully aware of my obligation to pay my fair share to support the grid I'm attached to: but what's fair?
     
  2. nwdiver

    nwdiver Active Member

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    #2 nwdiver, Dec 3, 2013
    Last edited: Dec 3, 2013
    Everyone seems to be stuck on "net-metering"... there are some rate plans that are "net-metered" that are much much worse than non-net-metered plans... like a flat rate based on production or capacity. My recommendation is that you recommend a rate plan that encourages "self-consumption". As mentioned on the AZ thread I'm personally a big fan of different rates for imports and exports. Solar customers should pay to support the grid but shouldn't the amount they pay be based on how much they use the grid and not how much solar they have?
     
  3. rolosrevenge

    rolosrevenge Dr. EVS

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    This is great. Finally small renewables will pay for the ancillary services to balance them. Now if only a nice V2G service was available, you could hopefully offset that charge by ceding control of your charging within certain limits. I am happy.
     
  4. nwdiver

    nwdiver Active Member

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    Only if they don't vote in favor of the RCC... with the RCC and net-metering there will be zero incentive for V2G or scheduled charging or any sort of supply/demand regulation on the consumers part. Net-Metering has to go. The free lunch was fun but we all knew it couldn't last forever :crying: though it probably could have gone on a little longer if the utilities weren't a bunch of cry-babies :tongue:

    Use the grid more you should pay more... use the grid less you should pay less. How much solar you have should never enter the equation.
     
  5. SCW-Greg

    SCW-Greg Active Member

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    Wait...

    So before you had solar, you were purely a consumer, paying both flat fees for staff, service, and net usage rates. Like 95+% of the the U.S., state, counties, and the rest of your local city population does as well. Right?

    And factored into those rates and fees is the maintenance (and profits) for your utility company to be viable for a growing community, for the long run.

    Now, you've added, at your expense, a system that gives back and helps your utility company mitigate future growth needs, and they want to charge you extra for it? The more you give back, the more they want to charge?

    What are the real costs associated with you feeding electricity back to the grid? What wear and tear on wire, transformers, etc is there (really), for flowing electricity in reverse?

    I can understand there maybe some additional bill management (software) on their end, but real costs with that are?

    Are the power companies proponents for green energy or not? What incentives are they creating? Taking away?

    Or are they just trying to maintain revenue/profit streams? Keep the system status quo.

    I don't pretend to know the answers here, but it sure seems counter intuitive. IMO
     
  6. Akikiki

    Akikiki A'-Lo-HA ! y'all

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    I live in Hawaii. I too have PV, a 5.5Kw system. I want to add a little more and have run into a couple of recent City code changes that have become real obstacles. The local power dictator has not planned for the growth of PV and is working on ways to force everyone to pay more although we are helping them. As a result of this, the PV companies are starting to show us early versions of off-grid systems that will take us completely off the grid. That's the way ahead. Until the off-grid systems are mature enough to be reliable, cost-effective and small enough to fit where my water heater used to fit, I will suffer along with non-PV customers but keep a low profile. Then spring for the off-grid when the time is right, and let the rest short sighted folks deal with the power struggle.
     
  7. nwdiver

    nwdiver Active Member

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    Greg, No doubt it's a combination of everything you mentioned. IMO the "fair" fee for grid use would be what is necessary to cover maintenance. For the utility to expect the same revenue level from fewer services is silly. The net "cost" to a utility per solar customer varies widely and is hotly debated. If you're the only one in your neighborhood then it's difficult to argue that you're anything but a net positive... but at some level of solar penetration the net cost is no longer in the utilities favor. Solar customers will need to pay something for the service they get from the grid... the billion dollar question is how much.

    I've lived with solar in three states and the difference is amazing...

    WA- Full Net Metering, Excess kWh rolled month-month, excess is reset to 0 every April. In 2013 they added an $8 service fee. In 2012 this fee could be "paid" with excess production, now you pay $8 no matter how much extra you produce :(

    TX- State law states you must be paid for exports but doesn't specify how much... apparently paying you $0 is still paying you (no joke) De-regulated market so you can shop around. TXU pays $0.075 for exports and charges up to $0.17 for imports. Green Mountain Energy nets 1-1 for first 500kWh exported then gives 50% credit for each kWh >500. About 20% of service providers pay more than $0 for exported energy. TX is also the only state I know of that doesn't meter production.

    NM- Xcel Service area (Eastern NM) Full net-metering up to consumption but only pays $0.01 - $0.03 for excess. "Standby Generation Fee" of $0.023 for every kWh produced. So there are actually times that exporting electricity costs money...

    Ironically NM actually gets high marks on how PV friendly the state is... that might be because it was judged by it's larger utility PNM or they weren't aware that Xcel charges the average solar customer >$250/yr for self-generated power. :cursing:

    Some interesting references...
    http://www.eei.org/ourissues/finance/Documents/disruptivechallenges.pdf
    http://www.ferc.gov/legal/fed-sta/exp-study.pdf
     
  8. Robert.Boston

    Robert.Boston Model S VIN P01536

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    As I laid out in the Arizona thread, your utility is on extremely sound cost-causation basis charging you *some* level of fee for integrating your generation and providing you on-demand power. As we've discussed in that thread, there might be more accurate/elegant ways to assess that charge. But there are real costs that your utility incurs, beyond the $13 facilities fee that covers metering, customer service, bad debt, etc., to maintain enough generating capacity to ensure that you (a) get power when you want it and (b) can sell power through their network when you have extra.

    I do not have a view as to whether the level of the charge your utility is proposing is just and reasonable. Arizona Public Service filed for a charge at about $8/kWh, but was only granted a rate one-tenth as high. Utility rates are supposed to be set based on costs, so if your utility can't back up the rational for the $1.72/kW, then that's an area for you to address. My gut says that, with the lower capacity factor solar facilities will have in Colorado vs. Arizona, the fee should be lower in Colorado than in Arizona.
     
  9. nwdiver

    nwdiver Active Member

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    The reverse is actually more typical... higher capacity factors mean more consistency and lower "Reserve fees". When Xcel applied for their production fee they assigned a percentage of the fee they wanted for each type of generation. Wind:94.9 Solar:53 Biomass:30. So WA should actually have the highest solar fees but instead has the lowest. I spoke to the lawyer that helped draft their rate schedule... PSE really wanted to make it work. Shows what can happen when the utility is pro-solar.

    http://www.nmprc.state.nm.us/consumer-relations/company-directory/electric/xcel-energy/rates/rate59.pdf
     
  10. rolosrevenge

    rolosrevenge Dr. EVS

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    Let us not forget, that the utility commissioner is an elected official and has to be seen as representing the people who put him in office. It is common practice for the utilities to workout the rates and fees they need to operate, multiply it by some number between 2 and 10, and send it to the commissioner just so he can "slash" rate increases to keep the people happy. AZ probably only wanted the lower rate but needed to ask for the ridiculously high rate at first to get it.

    - - - Updated - - -

    Also don't forget that there is hardly any solar in WA since we're
    a) 70% hydropower
    b) have horrible solar profiles
    c) have the cheapest electricity (see a) in the nation

    Solar just doesn't make sense here so PSE "encouraging" people is due to the fact that they know very few will actually do it. We do have lots of rain, and rain power works great and is clean and renewable and dependable. We just call it hydropower instead.
     
  11. stevezzzz

    stevezzzz R;SigS;P85D;SigX

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    I always pay attention when you have something to say, Robert.Boston. So help me understand how the utility incurs an incremental cost when I go from being just a residential consumer of electricity to a small time producer who still consumes about twice as much electricity as my PV system produces. Before solar I was paying the same $13 Facilities Charge per month; after solar my demand-related charges have been cut roughly in half. The utility derives some benefit from not having to build more generating capacity as quickly and having my production online during some of their peak demand periods (I'm thinking summer afternoons and A/C loads); I derive some benefit from having grid-delivered electricity, that I pay for, when I need it.

    Then there's the fact that $1.74 per kWp is the monthly charge for just the first year of a planned three-year ramp; we don't know what the second, third and subsequent years' charges will look like. And though the utility isn't concerned about my capital costs in acquiring a PV system, I have to think it's a tremendous disincentive to others who might be considering a similar investment to realize that the utility is going to recoup at least 15% of the value of the electricity a PV system will produce, through these extra fees.

    Here's a thought experiment. Imagine I had cut my electricity usage in half through conservation measures rather than by adding generation: would the utility be able to make any kind of argument that I owed them an extra $8 a month? The other side of the same coin is the question I posed in the first paragraph above: what incremental cost does the utility incur from my adding solar panels on the roof of my house?
     
  12. omgwtfbyobbq

    omgwtfbyobbq Member

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    What's fair is the additional cost your system incurs. I would push for a reasonable TOU system that would show you the real time value of what you're generated versus the real time costs of what you use so you can make effective decisions about what you use and when you use it. The facilities charge would be in addition to the net real time cost of whatever you use/generate.
     
  13. nwdiver

    nwdiver Active Member

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    #13 nwdiver, Dec 3, 2013
    Last edited: Dec 3, 2013
    Hey Brianman; Rolosrevenge is saying solar doesn't make sense in WA... get 'em:wink: But seriously... that is a common myth. A Solar PV system in Seattle will actually generate ~70% as much as one in San Diego... but ~80% of that will be April-Sept. I agree the profile is terrible, a lot in the summer and very little in the winter. But the summer makes it worth it.

    Sadly Hydro is only ~33% of PSEs energy mix, gas is 29% and Coal is 36%.
     
  14. SCW-Greg

    SCW-Greg Active Member

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    @Steve, I'm with you on your analogy.

    Can someone explain (Flasher?) how a PV system works? I.e. How it feeds back, technically?

    Outside of your PV system install, from what I understand, you just need a new meter installed, one that allows electricity to be measured in the opposite direction. Cost for the meter?

    I assume the electricity, once it passes by your meter, gets sucked up by be other homes in the hood... and just that much less is then needed from the utility. If more homes go PV (give back to the grid), does this create a "back flow" problem? Excess current that can't be consumed? Transformer issues? Does the neighborhood transformer need any mods?

    Perhaps new costs here?

    But hey, I'm just making this up. Thoughts?
     
  15. rolosrevenge

    rolosrevenge Dr. EVS

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    Except the energy prices here don't make it worth it. The most expensive utility is $0.12/kWh. Seattle City Light is $0.07. Solar here may make some cents, but really it needs to make dollars to be worth it.
     
  16. brianman

    brianman Burrito Founder

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    I know better than to argue with Rolo about electricity stuff.

    That said, in this case we probably agree. Without the incentives (federal and state), I wouldn't have gotten panels ("yet?").
     
  17. omgwtfbyobbq

    omgwtfbyobbq Member

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    The profile may not be that bad. I know that the PNW exports electricity to southern California in the summer via a bi-directional HVDC line, so additional summer generation may actually be valuable to a local utility, especially with longer days, because they can sell it for a premium to other utilities.
     

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