Grid use vs Energy use for billing

nwdiver · Dec 29, 2014

Thank you for providing input on the 'Equitable funding' thread. There are many, many variations of grid fees for people that produce their own power. But it really boils down to one question... should you pay based on energy used/produced or pay based on grid use. I thought this would be a more simplistic way to discover what people saw as a 'fair' or 'accurate' billing process. We really need to encourage the development of distributed resources like storage and demand response.

ONLY GRID USE
- Utility profits by crediting less for exports than they charge for imports, connection fees and possible a peak demand charge.
- A slight surplus will result in no bill.
- Large benefit to Demand Response and storage.
(Ex: TXU in TX)

MOSTLY GRID USE
- Utility profits by charging a small fee (<$1/kW or <$0.002/kWh) on installed solar, a connection fee; any excess power beyond net is usually credited at wholesale rates <$0.03/kWh.
- Export credit per kWh > Production fee per kWh.
- A large surplus is needed to not have a bill.
(Ex:APS in AZ)

MOSTLY ENERGY USE
- Utility profits by charging a 'LARGE' fee (>$5/kW or >$0.01/kWh) on installed solar and a Connection Fee.
- Export credit per kWh < Production fee per kWh.
- Impossible to not have a bill even during months with no GROSS consumption.
- Assumption is made that the size of the PV system is tailored to expected consumption.
- Penalty to installing more solar than is needed.
- No advantage to reducing consumption < production
- No benefit to Demand response or Storage.
(Ex: Xcel in NM)

Robert.Boston · Dec 29, 2014

I would prefer an option that charges customers with on-site generation on a two-part tariff:
1. A fixed fee for grid access based on their facility design (panel size) and/or peak energy draw from the grid during the prior 12 months,
2. Plus a time-of-use/time-of-injection tariff for energy use, where the same price is paid regardless of the direction of the flow.

nwdiver · Dec 29, 2014

Robert.Boston said:
I would prefer an option that charges customers with on-site generation on a two-part tariff:
1. A fixed fee for grid access based on their facility design (panel size) and/or peak energy draw from the grid during the prior 12 months,
2. Plus a time-of-use/time-of-injection tariff for energy use, where the same price is paid regardless of the direction of the flow.

I think this would probably fall under 'Mostly Gird Use' I had initially thought of a poll consisting of many many billing types but it was becoming unmanageable and the results were unlikely to be informative.

GSP · Dec 29, 2014

I voted for "only grid only" whatever that means.

I would not mind paying more per kWh for energy consumed than for energy exported to the grid. Same for a monthly connection charge based on the kVA rating of my service.

Some utilities are asking for one time or monthly fees for kW of PV panels installed. This is outrageous in my opinion and well worth fighting. Same for any attempt to charge you for kWh that you produce, but do not export to the grid.

GSP

nwdiver · Dec 29, 2014

GSP said:
I voted for "only grid only" whatever that means.

GSP

Crap... that should be "only grid use" :redface: maybe a mod can fix that...

ItsNotAboutTheMoney · Dec 29, 2014

None of the above.

No special fees for solar accounts.
Earn energy price for output to the grid.
Pay standard costs for input from the grid.

I don't think this is at all conceptually difficult: if the utilities need to change the pricing model, they need to change it for _everyone_. It's just like road pricing.

Then any other energy policy costs are distributed per kW (by connection size), demand, energy use or general taxation as appropriate.

nwdiver · Dec 29, 2014

ItsNotAboutTheMoney said:
None of the above.

No special fees for solar accounts.
Earn energy price for output to the grid.
Pay standard costs for input from the grid.

You're describing Grid use only with net-metering which is absolutely not sustainable large scale...

ItsNotAboutTheMoney · Dec 29, 2014

nwdiver said:
You're describing Grid use only with net-metering which is absolutely not sustainable large scale...

No I'm not. It's only like net metering in the context of the current pricing model. Fix the pricing model and what I described would also have solar users paying for their use of infrastructure appropriately.

If you're going to PUC meetings please start by forgetting policy aims and focus on challenging the logical basis for having a connection charge for solar customers _only_. Pay per kW for infrastructure for _everybody_ would help a lot with grid economics, would encourage _better_ efficiency focuses and additionally, would help encourage PEVs by lowering the cost of the additional off-peak load.

Support for solar PV should be a separate matter.

Robert.Boston · Dec 29, 2014

ItsNotAboutTheMoney said:
None of the above.

No special fees for solar accounts.
Earn energy price for output to the grid.
Pay standard costs for input from the grid.

I don't think this is at all conceptually difficult: if the utilities need to change the pricing model, they need to change it for _everyone_. It's just like road pricing.

Then any other energy policy costs are distributed per kW (by connection size), demand, energy use or general taxation as appropriate.

A key part of this proposal is that energy price is not the same as the "standard cost." Standard cost loads in the wires, etc. and so will generally be higher than the energy price. So this is sustainable as a design. What I don't like about it is that someone who uses the grid for export only (but retains the right to import power on demand) pays little.

nwdiver · Dec 29, 2014

ItsNotAboutTheMoney said:
No I'm not. It's only like net metering in the context of the current pricing model. Fix the pricing model and what I described would also have solar users paying for their use of infrastructure appropriately.

If you're going to PUC meetings please start by forgetting policy aims and focus on challenging the logical basis for having a connection charge for solar customers _only_. Pay per kW for infrastructure for _everybody_ would help a lot with grid economics, would encourage _better_ efficiency focuses and additionally, would help encourage PEVs by lowering the cost of the additional off-peak load.

Ok... I'm really confused as to what you're suggesting... can you cite any real world examples?

ItsNotAboutTheMoney said:
Support for solar PV should be a separate matter.

Please be more specific.

- - - Updated - - -

Robert.Boston said:
A key part of this proposal is that energy price is not the same as the "standard cost." Standard cost loads in the wires, etc. and so will generally be higher than the energy price. So this is sustainable as a design. What I don't like about it is that someone who uses the grid for export only (but retains the right to import power on demand) pays little.

...... well...... yeah..... let's say there's someone with 10 acres of land that wants to invest in 1MW of solar. IMO paying them wholesale for exports (this will vary with supply/demand of energy) and charging them retail for what they import would be more than fair. At some point in the future the only way for them to get paid would likely be storing energy during the day and exporting only when it's needed. Please specify what you see as unworkable in this scenario.

We NEED more storage and demand response for distributed generation to continue to grow... a good billing system provides an incentive for supporting the grid.

bxr140 · Dec 29, 2014

The options are leading--the third optionn is clearly more negative.

Also, the poll is too binary (or trinary?). There are fair and feasible pricing solutions that bridge your options--a combination of 1 and 3 would probably be closest to my true answer. At a minimum, a 'none of the above' would be helpful.

nwdiver · Jul 30, 2015

Ok... so I've tried this a couple times now and screwed it up... but I'm genuinely interested in understanding where this community stands...

I think most of us agree that we;
- Need the Grid
- The Grid costs $$$
- Distributed Generation is Good

The trillion $$$ question is... as more people use the grid less since they produce their own power... who pays for the grid? I'm going to post another poll with a larger breakdown... here's what I've got so far... it's not as unmanageable as I thought.

- Net-Metering + a small admin fee (<$10) (PSE WA)
- Net-Metering + a LARGE service fee ($10-50)
- Net-Metering + Production (kWh) fee + admin fee (Xcel NM)
- Net-Metering + Capacity (kW) fee + admin fee
- Net-Metering + Demand charge (~$6/kW) + admin fee
- Supply/Demand determine Export credits; No Net-Metering + admin fee

What did I miss?

DMC-Orangeville · Jul 30, 2015

nwdiver said:
The trillion $$$ question is... as more people use the grid less since they produce their own power... who pays for the grid? I'm going to post another poll with a larger breakdown... here's what I've got so far... it's not as unmanageable as I thought.

- Net-Metering + a small admin fee (<$10) (PSE WA)
- Net-Metering + a LARGE service fee ($10-50)
- Net-Metering + Production (kWh) fee + admin fee (Xcel NM)
- Net-Metering + Capacity (kW) fee + admin fee
- Net-Metering + Demand charge (~$6/kW) + admin fee
- Supply/Demand determine Export credits; No Net-Metering + admin fee

What did I miss?

Where does the Feed In Tariff (FIT) play in this equation?

That's what is offered in my jurisdiction (Province - Ontario). All production is sold to the utility at a set fee for 20 years. If the producer wants to use some of the power personally, they do so prior to the outbound meter. All capital costs are borne by the solar producer. No service/admin fee. The cost of using the solar power generated would be the opportunity cost of not selling.

It's justified to the populace as being a "green option". The province is shutting down all coal fired generation. The powers that be claim that paying a higher than utility rate to solar producers is much cheaper than making new nuclear or gas plants.

nwdiver · Jul 30, 2015

DMC-Orangeville said:
Where does the Feed In Tariff (FIT) play in this equation?

That's what is offered in my jurisdiction (Province - Ontario). All production is sold to the utility at a set fee for 20 years. If the producer wants to use some of the power personally, they do so prior to the outbound meter. All capital costs are borne by the solar producer. No service/admin fee. The cost of using the solar power generated would be the opportunity cost of not selling.

It's justified to the populace as being a "green option". The province is shutting down all coal fired generation. The powers that be claim that paying a higher than utility rate to solar producers is much cheaper than making new nuclear or gas plants.

Is your FIT based on production or export? This poll is seeking opinions on long-term sustainable options. If I understand correctly most FITs are an incentive to accelerate the adoption of solar and designed to be phased out over time. If your FIT is not an incentive then it probably falls under the last option...

DMC-Orangeville · Jul 30, 2015

nwdiver said:
Is your FIT based on production or export? This poll is seeking opinions on long-term sustainable options. If I understand correctly most FITs are an incentive to accelerate the adoption of solar and designed to be phased out over time. If your FIT is not an incentive then it probably falls under the last option...

The FIT would be based on export. Our Province reviews and renews the program regularly (about every 18 months), and we are on the third edition. The program itself could be viewed as short term (they could stop any new applicants if they saw fit to stop the program), but once the contract is signed - it is that - a guaranteed contract for purchase of power for 20 years. I would consider that long term.

Should the producer choose to use their own power, their cost would be just the loss of revenue. Note: for small solar systems, the current rate paid is $.384/Kwh for rooftop (<10KW systems), $.289 for non-rooftop (<10KW systems). Details, here: FIT Price Schedule | Feed-in Tariff Program - Independent Electricity System Operator

nwdiver · Jul 30, 2015

DMC-Orangeville said:
It's justified to the populace as being a "green option". The province is shutting down all coal fired generation. The powers that be claim that paying a higher than utility rate to solar producers is much cheaper than making new nuclear or gas plants.

We need some of that down here in NM... I'm paying ~$50/mo because I'm NOT using the plants they've already built!

How's this?

- Net-Metering + a small admin fee (<$10) (PSE WA)
- Net-Metering + a LARGE service fee ($10-50)
- Net-Metering + Production (kWh) fee + admin fee (Xcel NM)
- Net-Metering + Capacity (kW) fee + admin fee
- Net-Metering + Demand charge (~$6/kW) + admin fee
- Supply/Demand determine Export credits; No Net-Metering + admin fee
- FIT; admin costs paid by surplus energy sales

I'm considering allowing multiple selections with a final two choices...

- Should there be a minimum bill regardless of imports/exports? Yes
- No

Foghat · Aug 1, 2015

Everyone should pay separate bills:

Grid access fee
Energy rate
Demand/volume rate

If you self supply, then grid access fee is all you pay the utilty.

If you supply energy to the grid, then you will charge an energy rate as well as demand/volume rate.

Ultimately, if aggregated DG solar is valued correctly, you could end up with net zero bill based(or better) on appropriate system size for home or business.

aesculus · Aug 1, 2015

PG&E in California basically has a tiered system for payment of solar. If you are clever and have the capacity and storage, you can game the system to your advantage even though you don't over produce net. In fact that's probably not a good idea.

What they do is to charge you and also reward you based on Tiers (1-4) at different rates. But in addition to that if you are on a Time of Use (TOU) plan you also get charged and payed depending on the time of day, day of the week at different rates.

So if you are cleaver you make sure you over produce during the peak periods and only consume during the non peaks. And you also need to size the system so you can produce at the best possible net value when its good, but without going over at the end of the true up period.

It would take a special formula to figure out the ideal solar installation size based on your overall consumption needs (total and time) as well as the ROI maximum that your could get. But basically there is an opportunity with both Tiers and TOU to get more from the system than it gives you without a huge investment in solar with a paltry $.04 kwh return.

Note the above expects you to never over produce at the end of the year. This is because the higher dollars are always offset by consumption but the kWh are totaled at the end and if you have excess $ credit it gets thrown way. Sort of like a bank account that is settled once a year and if there is any remaining the slate is wiped clean. But you can still get credited at a higher rate than what you consume at. Just don't end up positive.

rolosrevenge · Aug 1, 2015

Everyone should pay:
* Grid Connection Fee
* Energy usage based on time of usage
For those with DG, they should pay:
* DG Connection fee
* Wheeling tariff on energy produced
They get paid:
* Energy production based on real-time rate

nwdiver · Aug 1, 2015

rolosrevenge said:
Everyone should pay:
* Grid Connection Fee
* Energy usage based on time of usage
For those with DG, they should pay:
* DG Connection fee
* Wheeling tariff on energy produced
They get paid:
* Energy production based on real-time rate

I was hoping to hear from you on this topic... do you agree that fees based on installed PV capacity or PV production are absurd?

To be more specific... would you agree with a 'Wheeling tariff' that was HIGHER than the Export credit? Should I have to shut down my PV system when I go on vacation to save $$$?

Here's a real world example... Xcel pays me ~$0.03/kWh exported... charges me $0.036/kWh produced...

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