SCTY Acquisition makes no strategic, financial or operational sense!

[ChadFeldheimer]

NV Energy made $750M last year and could very easily make nothing as soon as 2017 if solar is allowed to compete, aggregate and sell at wholesale.

NV Energy is a regulated utility, and in the long run the utility will make money. Furthermore, the higher their costs are, they more money they make.

If NV Energy made no money in 2017 as a result of paying for solar, it would be because solar is more expensive than alternative/historical means of electricity generation. For example, paying net metering customers for daytime electricity at peak rates - including cost of distribution. At that point, they'd be able to successfully lobby for higher rates in the future (especially for non-net metered customers), generating even higher profits than would otherwise be possible.

 

[Perfectlogic]

I'm not being ridiculous. You are being a clueless dumbass, or pretending to be one, I can't tell which.

Nope, not necessarily.


Everything you said is wrong.

Learn how to do math, then try again.

If you're really that much of a clueless dumbass, here's a hint: a household which installs solar, and *does not feed anything back*, looks exactly the same to the utility as a household which installs a more efficient electric heating system or insulates their house or just uses less hot water. Applying a fixed charge to one and not the other means that the solar household is subsidizing the other household. IF the utiilty is not charging a high enough connection charge to everyone, then efficient households are not paying their share of the grid costs. There is no reason for solar households to be taxed to subsidise them, except for malicious anti-solar hostility.

If you can't get something this simple through your head, you should be banned from this forum. It's bloody obvious.

Man that's a lot of insults in one post, calm down buddy. I'm only stating the facts, no need to shoot the messenger as they say. Going to assume you are a christian fundamentalist and got upset over that comment I made, I'm sorry for that, didn't mean to upset anyone.

Firstly a household with solar which does not feed anything back is not the same as someone who uses the same amount of power without solar. The demand curve for one of the households is more smooth while for the solar household there is no demand during 6 hours of the day, and those 6 hours happen to be the part of the day when electricity is the cheapest for the utility as the demand is the lowest. So the cost of a house with solar would be higher than the cost of a house using the same amount of power without solar.

I don't know why you are using this example though, didn't you say that only the households that used net metering would be affected by the price increase? You explicitly said that the household in your example did not feed anything back. Try again and perhaps focus a bit less on the insults and a bit more on making an argument that actually makes sense.

 

[Perfectlogic]

I don't think anyone argues net metering isn't skewing the system. It's by design. Until there's substantial penetration of solar it is simple and works well enough towards getting some solar power into the system. The system is skewed already in all sorts of ways, fair or not. Regulatory changes are coming that are much more sophisticated and will put other checks and balances in place.

I strongly advise to just drop the whole what's fair vendetta. We can try to figure out what would be the outcomes from various policies that get proposed, that'd be useful.

All you have to do is scroll up a few posts "Hasn't every legit cost/benefit analysis to date indicated that pure net metering is at worst neutral for all parties?"

All the bulls from the SCTY thread believes the residential solar model is the cheapest and best in every way, and will take over the world in a few years. Even neroden seems to believe that the only thing holding residential solar back is the big bad utiltiies, and I don't remember seeing him in the SCTY thread. I think a lot of people likes the thought of being self sufficient and of course being able to save money. I like that idea too, both of them actually, but things aren't always how you want them to be.

Just to be clear I am arguing for larger solar projects instead of residential solar. Right now the system is skewed alright, residential solar gets subsidized much more. If you really had a good case arguing that it is fair for residential solar to get subsidized more then it would make sense so that part of the discussion is actually relevant. This whole discussion might seem terribly unproductive, but on top of stopping the spread of misinformation it actually is relevant to understanding how future legislation might be likely to look like too as that is intended to be as fair as possible.

 

[kenliles]

existential thoughts

#3873

 

[30seconds]

All you have to do is scroll up a few posts "Hasn't every legit cost/benefit analysis to date indicated that pure net metering is at worst neutral for all parties?"

All the bulls from the SCTY thread believes the residential solar model is the cheapest and best in every way, and will take over the world in a few years. Even neroden seems to believe that the only thing holding residential solar back is the big bad utiltiies, and I don't remember seeing him in the SCTY thread. I think a lot of people likes the thought of being self sufficient and of course being able to save money. I like that idea too, both of them actually, but things aren't always how you want them to be.

Just to be clear I am arguing for larger solar projects instead of residential solar. Right now the system is skewed alright, residential solar gets subsidized much more. If you really had a good case arguing that it is fair for residential solar to get subsidized more then it would make sense so that part of the discussion is actually relevant. This whole discussion might seem terribly unproductive, but on top of stopping the spread of misinformation it actually is relevant to understanding how future legislation might be likely to look like too as that is intended to be as fair as possible.

I think you put too much faith in utility power companies producing and distributing power in a way that is most beneficial to the consumer. You may be right that large scale solar coupled with the current grid is the cheapest way to produce and deliver power, however there still is a jump to how much & how variable the end consumer pays.

There is a net benefit to most consumers if the rate is fixed and known in advance vs highly variable but cheaper on average. This is one of the key reasons I see long time homeowners sign up for residential solar. There is also another benefit in that many people believe in global warming and want to take action vs. the local utility which usually is still burning coal b/c the plant is depreciate and thereby "cheap."

No money down solar PPAs are incredibly attractive to consumers. They reduce the monthly bill and have less variability. Yes currently they are dependent on ITC and net metering to deliver this, but as many have pointed out central utility producers also get subsidies such as tax credits and legislative rules forcing producers to only sell to them (which results in a massive discount).

How do you account for MGM and Wynn paying to break from NV Energy? By your perfect logic the utility should be able to aggregate and produce at a much lower cost that either of these players. However they are willing to pay upfront for a break.


Vegas Casinos Plan to Leave Warren Buffett’s Nevada Utility

 

[TheTalkingMule]

NV Energy is a regulated utility, and in the long run the utility will make money. Furthermore, the higher their costs are, they more money they make.

If NV Energy made no money in 2017 as a result of paying for solar, it would be because solar is more expensive than alternative/historical means of electricity generation. For example, paying net metering customers for daytime electricity at peak rates - including cost of distribution. At that point, they'd be able to successfully lobby for higher rates in the future (especially for non-net metered customers), generating even higher profits than would otherwise be possible.

For sure, but it should become plainly obvious to the people of Nevada that they're being fleeced and NVE will eventually lose nearly all their production profit which I imagine was the vast majority of that $750M. You won't be able to print money by selling fossil juice at peak in the dessert southwest after 2017.

 

[Perfectlogic]

No money down solar PPAs are incredibly attractive to consumers. They reduce the monthly bill and have less variability. Yes currently they are dependent on ITC and net metering to deliver this, but as many have pointed out central utility producers also get subsidies such as tax credits and legislative rules forcing producers to only sell to them (which results in a massive discount).

The difference in the size of subsidy is the problem. Residential solar is hugely subsidized by everyone else right now, they get to sell their power for 4 times the amount utility scale does, it is a waste of money, and the consumers without rooftop solar gets to pay the bill.

How do you account for MGM and Wynn paying to break from NV Energy? By your perfect logic the utility should be able to aggregate and produce at a much lower cost that either of these players. However they are willing to pay upfront for a break.

There is a difference between 1 small house and a huge casino. I can assure you they didn't break away from the grid to pay 15c/kwh + an escalator for electricity plus having to deal with the cost of storing excess power themselves.

 

[Norbert]

The difference in the size of subsidy is the problem. Residential solar is hugely subsidized by everyone else right now, they get to sell their power for 4 times the amount utility scale does, it is a waste of money, and the consumers without rooftop solar gets to pay the bill.

There seem so many things wrong with this sentence. Utilities are not supposed to make money from buying returned solar power (at least not until the balance is down to zero), they are supposed to make money from the energy they provide themselves. Subsidizing solar has two reasons, both of which do apply to residential solar: help reduce CO2/pollution, and help the development of cheaper solar.

You could argue that the subsidies for utility solar are too low, but you can't argue that getting back the same price customers with residential solar have paid for grid energy, would be too high, as long as solar is still in the single digit percentage realm. Given that solar is still around 0.6%, it also can't be a big bill for those other customers.

The utilities make a lot of noise about residential solar customers not paying enough for the grid, but what about the solar customers having to indirectly pay the bill for CO2/pollution ? Create a CO2 tax first, wait until solar is at 20% second, then, after that, we can talk about the grid cost, and reducing the energy pay back rates. Until then, why would you argue against all these things?

 

[Drax7]

All you have to do is scroll up a few posts "Hasn't every legit cost/benefit analysis to date indicated that pure net metering is at worst neutral for all parties?"

All the bulls from the SCTY thread believes the residential solar model is the cheapest and best in every way, and will take over the world in a few years. Even neroden seems to believe that the only thing holding residential solar back is the big bad utiltiies, and I don't remember seeing him in the SCTY thread. I think a lot of people likes the thought of being self sufficient and of course being able to save money. I like that idea too, both of them actually, but things aren't always how you want them to be.

Just to be clear I am arguing for larger solar projects instead of residential solar. Right now the system is skewed alright, residential solar gets subsidized much more. If you really had a good case arguing that it is fair for residential solar to get subsidized more then it would make sense so that part of the discussion is actually relevant. This whole discussion might seem terribly unproductive, but on top of stopping the spread of misinformation it actually is relevant to understanding how future legislation might be likely to look like too as that is intended to be as fair as possible.

Concentrating all the production under one utility, gives them monopoly pricing power . Even though it might be the most efficient way to produce , the concentration eliminates free market competition . How do you account
For that ?

 

[Perfectlogic]

Utilities are not supposed to make money from buying returned solar power

Right now utilities are taking a huge loss on "customers" with rooftop solar under net metering rules. I have explained the numbers in details many times, I suggest you go read some of my previous posts as you clearly do not have any clue about the cost structure of delivering power to consumers on demand.

but what about the solar customers having to indirectly pay the bill for CO2/pollution ?

You seem to be confused about what we are discussing. I am saying we should do large scale solar projects instead of wasting money for huge rooftop solar subsidies. And utilities are already opting for solar or wind for nearly 100% of new capacity additions, the future of electricity generation will be renewables with or without residential solar. The amount of strawmanning here is ridiculous, noone is saying that we shouldn't have a CO2 tax, that would be great and accelerate the transition to renewables even further. It wouldn't change a thing about the larger scale solar vs residential solar debate though.

Concentrating all the production under one utility, gives them monopoly pricing power . Even though it might be the most efficient way to produce , the concentration eliminates free market competition . How do you account
For that ?

There is a reason for having large monopolies as utilities, it is simply the cheapest model. The residential solar zealots like to make that into a problem as it fits their narrative, but like pretty much everything else they say it doesn't make sense as the US has some of the cheapest power in the world. I think on average the US rates are like half what we pay here in Europe, in Denmark where I live I pay 35c/kwh. I wouldn't mind one of those big evil US utilities offering me power for 12c/kwh.

 

[Norbert]

Right now utilities are taking a huge loss on "customers" with rooftop solar under net metering rules. I have explained the numbers in details many times, I suggest you go read some of my previous posts as you clearly do not have any clue about the cost structure of delivering power to consumers on demand..

With residential solar being only about 0.3% currently (in the US), the loss can't be that "huge". And it certainly is smaller than the loss we have as a society due to CO2. So I'd call it a subsidy, not a loss, a subsidy which is not only fair, but also necessary, as long as solar is in the single digits, as I said. It is in the nature of a "subsidy" that someone will see it as a "loss".

The utilities would (and hopefully will) indeed have a far larger "loss" if a CO2 tax were part of their cost structure, which you said you support.

Note regarding these and previous percentages: 0.6% is actually the EIA number for just utility solar in 2015.
Other EIA numbers are more difficult to read, but as far as I can tell residential solar by itself comes out at only about 0.3%.

What is U.S. electricity generation by energy source? - FAQ - U.S. Energy Information Administration (EIA)
EIA - Electricity Data

You seem to be confused about what we are discussing. I am saying we should do large scale solar projects instead of wasting money for huge rooftop solar subsidies.

I don't see the confusion since that is exactly how I understood you, and I disagree with it. With the "instead".

And utilities are already opting for solar or wind for nearly 100% of new capacity additions, the future of electricity generation will be renewables with or without residential solar.

While that's an interesting number if it is correct, I'm not sure how relevant it is since the total generation at utility scale since 2006 is more or less flat. And renewables are still a *far* too small percentage.

I'm afraid this number is more significant: Measured in MWh, annual numbers including 2015, natural gas energy generation went up more than all renewables combined. Fortunately, coal has decreased, but it was replaced by natural gas more than by renewables.

The amount of strawmanning here is ridiculous, noone is saying that we shouldn't have a CO2 tax, that would be great and accelerate the transition to renewables even further. It wouldn't change a thing about the larger scale solar vs residential solar debate though.

The "strawmanning" is all yours, since I mentioned CO2 tax to point out that the argument made by the utilities, that residential solar customers would not be paying the bill for the grid, is a false argument as it looses the larger context. And of course I stand by that.

There is a reason for having large monopolies as utilities, it is simply the cheapest model. The residential solar zealots like to make that into a problem as it fits their narrative, but like pretty much everything else they say it doesn't make sense as the US has some of the cheapest power in the world. I think on average the US rates are like half what we pay here in Europe, in Denmark where I live I pay 35c/kwh. I wouldn't mind one of those big evil US utilities offering me power for 12c/kwh.

I don't buy your arguments against residential solar, not in the least, and when you talk about "residential solar zealots", it just makes me wonder if you are a "utility solar zealot". We simply need all the solar, both utility and residential. One nice advantage of residential is that it uses existing space, and another is that in this way homeowners can add solar by their own choice. We need more of that, not less. Obviously!

 

[Perfectlogic]

With residential solar being only about 0.3% currently (in the US), the loss can't be that "huge"

It is huge per customer (relatively speaking, obviously), I have already explained this 100 times. It isn't an argument to just say well it can't be huge, that should settle it. Something like 82.5% of SCTY's revenue is pure subsidy, it is absolutely huge. They sell power for 4 times the market price on top of the 30% ITC. Just because it's still only a small part of the energy mix doesn't mean it's okay to throw away money on it.

The utilities would (and hopefully will) indeed have a far larger "loss" if a CO2 tax were part of their cost structure, which you said you support.

With a CO2 tax utilities would accelerate their spending on large solar projects, they will obviously make money regardless as their profit margin is fixed, but this would be good for the environment. The huge subsidy for residential solar is wasteful spending, if that money was used for larger projects which are far cheaper per watt installed we could accelerate the transition without any added cost.

While that's an interesting number if it is correct, I'm not sure how relevant it is since the total generation at utility scale since 2006 is more or less flat.

... It is relevant because since (large scale) renewables are now the cheapest source of power it is only a matter of time before the entire capacity is swapped out. Generation from both wind and especially solar isn't flat at all, it is exponential. Capacity today is still relatively small in total, but new capacity added this year is large. In just 5 years solar will be a significant part of the mix, and in perhaps 10-15 years the biggest part of the mix.

I'm afraid this number is more significant: Measured in MWh, annual numbers including 2015, natural gas energy generation went up more than all renewables combined. Fortunately, coal has decreased, but it was replaced by natural gas more than by renewables.

Again you have it wrong. You can't use these fluctuations for much, all it says is that the capacity factor has gone up for NG plants and down for coal since NG fuel has fallen in price making it cheaper than coal. They are building very few new plants, they are just using the old ones more and the old coal plants less.

One nice advantage of residential is that it uses existing space, and another is that in this way homeowners can add solar by their own choice.

I think this is the first argument you have made for residential solar vs large scale solar. All the other nonsense about CO2 is the same for both options. So your entire argument for subsidizing residential solar 82.5% and utility scale solar 30% is that with residential you use less space! I'm sure most people agree with you and are willing to pay a 50% higher utility bill in the future in order to not use a small part of the desert for large scale projects.

 

[Norbert]

It is huge per customer (relatively speaking, obviously), I have already explained this 100 times. It isn't an argument to just say well it can't be huge, that should settle it. Something like 82.5% of SCTY's revenue is pure subsidy, it is absolutely huge. They sell power for 4 times the market price on top of the 30% ITC. Just because it's still only a small part of the energy mix doesn't mean it's okay to throw away money on it.

You mean “huge per customer” as referring to residential solar customers? Since that relates to only 0.3% of generation, it would confirm that absolute numbers are not “huge”. I think that does in fact settle it. I won’t even ask how you get to the 87.5% number.

Regarding the “market price”, my understanding is that net metering usually gets you back the same price you paid, which is determined by the utilities. Load balancing really shouldn’t be a significant cost for net metering solar (as you claim in your post from June 27th), since natural gas generation (currently around 33%) can be adjusted easily, especially as long as solar is in the single digit percentage realm. This also applies to present and near future California, regardless of the “duck curve” article you like to quote.

In any case, in the long term future, load balancing will be supported by batteries (again both utility and residential). That’s what Tesla is working on with the Gigafactory and its energy products.

With a CO2 tax utilities would accelerate their spending on large solar projects, they will obviously make money regardless as their profit margin is fixed, but this would be good for the environment. The huge subsidy for residential solar is wasteful spending, if that money was used for larger projects which are far cheaper per watt installed we could accelerate the transition without any added cost.

It is not wasteful because these subsidies are complemented by the investments of residential solar customers, which otherwise would not (yet) happen to the same degree. Whether additional subsidies in the utility space could trigger additional investments there, is a separate question, and not necessarily the case.

... It is relevant because since (large scale) renewables are now the cheapest source of power it is only a matter of time before the entire capacity is swapped out. Generation from both wind and especially solar isn't flat at all, it is exponential. Capacity today is still relatively small in total, but new capacity added this year is large. In just 5 years solar will be a significant part of the mix, and in perhaps 10-15 years the biggest part of the mix.

Again you have it wrong. You can't use these fluctuations for much, all it says is that the capacity factor has gone up for NG plants and down for coal since NG fuel has fallen in price making it cheaper than coal. They are building very few new plants, they are just using the old ones more and the old coal plants less.

That doesn’t really make sense as an answer. You are effectively conceding my point, while at the same time trying to create the impression that I got it all wrong. (BTW, it isn't "fluctuations", but a continuous increase since 2006, except for two outlier peaks.)

I think this is the first argument you have made for residential solar vs large scale solar. All the other nonsense about CO2 is the same for both options. So your entire argument for subsidizing residential solar 82.5% and utility scale solar 30% is that with residential you use less space! I'm sure most people agree with you and are willing to pay a 50% higher utility bill in the future in order to not use a small part of the desert for large scale projects.

I ‘m not that concerned with making arguments residential vs utility. Both are good and both should increase substantially.

 

[neroden]

Firstly a household with solar which does not feed anything back is not the same as someone who uses the same amount of power without solar.

False. It's exactly the same.

The demand curve for one of the households is more smooth

False. You've never actually looked at household electricity demand minute by minute, have you? Load fluctuations *vastly* exceed the fluctuations caused by solar panels. Those high transitory startup loads are the bane of the grid manager's existence...

I'm planning to install on-demand (tankless) hot water. This is a *brutal* load fluctuation, much worse than normal load fluctuation, and much much worse than the fluctuations caused by solar panels. It would be reasonable for the utility to charge me more because of this. NV Power doesn't charge extra fees to people with these systems. Which shows that their extra fee for people with solar is *just a matter of attacking solar*.

I don't know why you are using this example though, didn't you say that only the households that used net metering would be affected by the price increase?

It's not clear that it's possible/legal to install solar panels in Nevada without subscribing to net metering. Maybe it is, but I couldn't find any documentation saying that they'd authorize connection of solar panels with a circuit preventing them from feeding energy to the grid.

Look at what Spain did; they made it illegal to install solar panels without feeding the grid. (In Europe, there are apparently now quite a lot of illegal "plug-in" solar panels showing up. So it's not really possible to effectively prohibit them, but the utility company can cause a lot of trouble if they catch you. Spain's government, on behalf of its utility companies, was threatening to send the police door to door to look for unauthorized solar panels. Seriously.)

I have been trying to figure out whether NV Energy will allow you to connect them, and I can't find any documentation that they will allow it. I suspect the worst.

By contrast, in Hawaii there are now very clear rules for installing solar panels without net metering, which don't feed back to the grid. (Go Hawaii!)

There is a potential long-term issue with net metering. Faced with this issue, *decent* utility companies have done some of the following things:
(1) raised basic connection charge for everyone
(2) proposed residential peak demand charges (note, this catches the on-demand hot water users -- as it should)
(3) proposed net metering on an "hour by hour" basis (so you can't offset night usage with day usage) -- this is the Maine proposal
All of this is fine. NV Power instead proposed a punitive scheme to attack people with rooftop solar.

 

[Perfectlogic]

I lost interest in this discussion, I have explained the same things enough times. It is impossible to win when you just don't accept any arguments no matter how good and just claim "well it's okay to waste money if its only on .3% of households!", I would rather discuss with a 10 year old.

 

[30seconds]

I lost interest in this discussion, I have explained the same things enough times. It is impossible to win when you just don't accept any arguments no matter how good and just claim "well it's okay to waste money if its only on .3% of households!", I would rather discuss with a 10 year old.

But it is OK to waste money on 100% of utilities. Maybe one day net metering will be a big and unfair drag on utilities, as for now it's a small drag. You argue otherwise and without the numbers. How much is the loss for net metering in 2015 for a large utility like Southern California Edison? Tiny. How much was the loss to Edison customers when the power producers were gaming the system to jack up rates? Billions.

As Blackouts Hit California, Traders Manipulated Market

Want to know what would have helped people? Rooftop solar. Even more? Rooftop solar + batteries.

There are many valid reasons why rooftop solar is viable in some locations and to some people.

 

[Perfectlogic]

But it is OK to waste money on 100% of utilities. Maybe one day net metering will be a big and unfair drag on utilities, as for now it's a small drag. You argue otherwise and without the numbers. How much is the loss for net metering in 2015 for a large utility like Southern California Edison? Tiny. How much was the loss to Edison customers when the power producers were gaming the system to jack up rates? Billions.

As Blackouts Hit California, Traders Manipulated Market

Want to know what would have helped people? Rooftop solar. Even more? Rooftop solar + batteries.

There are many valid reasons why rooftop solar is viable in some locations and to some people.

That trading manipulation stuff was alike to what Enron was doing, it was partly because of some very stupid regulation CA passed back in those days to liberate the market funnily enough. It isn't relevant to today in the slightest. The US has some of the cheapest power in the world, the utilities are actually doing a good job, I know it is very hard to accept as it doesn't fit your narrative but that is how it is.

I suggest we start subsidizing solar panels on cars next, we will have to subsidize it even more than residential because it is even more stupid and expensive. But I'm sure the solar panels will only make it onto a few cars anyway so who cares. Lets subsidize solar for 1000 different use cases that all produce power very inefficiently and expensive, in aggregate all these weird use cases will be able to power our whole grid! And it will be cheap too because each one on their own only bears a small completely irrelevant cost. Man your logic is great guys.

 

[doggusfluffy]

Speaking of waste...
'Is everybody else wrong?' In other states, coal ash being excavated to protect waterways

The DEQ does not consider the arsenic seeping from the groundwater into the river to be a violation, but a top DEQ official was forced to acknowledge in court that the agency was not aware of a U.S. Environmental Protection Agency interpretation of the Clean Water Act at odds with DEQ’s opinion.

 

[Perfectlogic]

Speaking of waste...
'Is everybody else wrong?' In other states, coal ash being excavated to protect waterways

If you wan't the shift to renewables to be as quick as possible, the best would be to stop wasting money on subsidizing expensive residential solar and put the money where you get the most bang for your buck, which is large scale projects. For every watt SCTY puts up we could have put up 3 watts of large scale solar at the same price.

 

[Norbert]

If you wan't the shift to renewables to be as quick as possible, the best would be to stop wasting money on subsidizing expensive residential solar and put the money where you get the most bang for your buck, which is large scale projects. For every watt SCTY puts up we could have put up 3 watts of large scale solar at the same price.

a) I have looked at some of your calculations and found them to be strongly biased and exaggerating, if not incorrect or misleading. Others in this thread came to similar conclusions about your arguments. Maybe that is necessary if one wants to defend the position of NV Energy.

b) Regarding car solar (and stupidity): It doesn't really work, and wouldn't go anywhere even with subsidies. Although it does, at first, sound like a nice idea.

c) Residential solar already works very well, already got quite far, and most of us sincerely expect that with the necessary growth support, residential solar will become competitive at common ("cheap") US prices without subsidies, and then carry itself, so to speak. Even if in some geographical areas sooner than in others. It will become a significant and valuable component of the energy mix in the US, and provide all the advantages of renewables. I have little doubt about this, if any.

d) Multiple avenues of progress are strongly preferable to a monopoly (which have a tendency to organize things around self-interest, and often to be adverse to change). Your insistence on supporting one at the expense of the other, makes me very suspicious about your motives.