California and NEMS future?

cpa · Jun 15, 2015

A good friend of mine just finished his 8.8 kW solar array construction project, and will be going live late today or sometime tomorrow. He lives in rural Stanislaus County, so his electric utility is Turlock Irrigation District.

He shared with me the contract between him and his wife and TID:

A monthly meter rental of $17.
Mandatory time-of-use metering for delivery and receipt of electricity. Part peak starts at 9PM during the summer, and off peak starts at midnight.
Demand charges for the highest delivery amount in any one 15-minute increment throughout the billing period. Summer demand charges are $2/kW and winter demand charges are $1.70/kW.
Monthly settlement of net electricity delivered or received.

I have never heard of residential users being assessed a demand charge from any utility until now.

My wife and I are in PG&E territory. Our meter rental is about $4.35/month. We can opt for either TOU rates or baseline rates. We use baseline as the summers are so incredibly hot, and the HVAC runs into the evenings. We have zero demand charges. We settle with PG&E annually, with a dollar-for-dollar credit at retail rates against our bill when our delivery of electricity exceeds our receipt of electricity for the billing period. Any excess generation for the year is calculated at about 4 cents/kWh and is a credit against our gas bill.

When the current scheme runs out in a couple of years, I wonder if the three largest public utilities will start gouging us with higher meter rentals, demand charges and monthly settlements, not to mention mandatory TOU.

Battery storage is looking better and better.

Robert.Boston · Jun 16, 2015

The demand charge approach is very fair, I think. Most non-residential customers have demand charges, reflecting that fact that it's very costly for utilities to maintain the generating and transmission capacity to meet peak demand. $2/kW is a bargain compared to what most utilities charge. E.g., PG&E's Medium General Service tariff at secondary voltage (which is what residences use) has a demand charge of $16.23/kW summer, $8.00/kW winter. It's interesting to see how this breaks down: of the summer rate, e.g., $4.34 is for generation (capacity), $6.13 is for distribution, and $5.72 is for transmission.

I also strongly support the symmetric price of power that Turlock is using. As I understand it, your friend pays the same amount to buy a kWh of power as he would receive were he to sell it. That's very efficient and discourages people storing peak-period power (which is valuable to the grid) to use in off-peak periods (when there are cheaper generation sources available). That pricing supports efficient grid operation, which PG&E's does not.

cpa · Jun 16, 2015

Thanks for your analysis, RB. (Even though I cringe at the thought that our costs could easily more than double in a couple years, if your analysis has merit for PG&E.) Our annual settlement is less than $250/year with our 4.4 kW system, plus the $4.35 monthly meter tack-on. What makes things problematic for those of us in the Central Valley (guessing about 33% of PG&E customers) is that we get about 4 months of 95-110 degree weather, so a central HVAC is necessary. We get no respite. An expansion of our solar array to accommodate this putative idea just would not pencil out. But, it is a dry heat (~12% relative humidity :biggrin

Saghost · Jun 16, 2015

DELMARVA power here in Delaware has a demand charge similar to the one described. I didn't think it was a huge deal, and as Robert says, it's a fairly sensible way to monetize the actual expenses of the power company - especially in a net metered world.

(Of course, it's also incentive for homes and businesses to install battery packs and load shave - but that does reduce the actual requirements for the utility, so I don't have a problem with it.)
Walter

Robert.Boston · Jun 17, 2015

cpa said:
Thanks for your analysis, RB. (Even though I cringe at the thought that our costs could easily more than double in a couple years, if your analysis has merit for PG&E.) Our annual settlement is less than $250/year with our 4.4 kW system, plus the $4.35 monthly meter tack-on.

Remember that demand charges aren't just tacked on top of the existing kWh rate. Your current bundled kWh is trying to have a single price for (at least) four bundled products: energy, generation capacity, transmission, and distribution. If a demand charge picks up the last three, then the energy charge will fall–and fall dramatically. The average bill stays the same. Your bill could rise sharply, though, as you have very peaky demand.

In a use case like yours, I don't see batteries as being very sensible. You can't store anywhere near enough surplus power from the winter to get you through the summer. May I suggest spending summers in a nice seaside cottage here in Maine? It's currently 70°F with a pleasant breeze off the ocean.

miimura · Jun 17, 2015

Residential demand charges would make "smart charging" even more desirable. Some electric vehicles use charge timers based on departure time. However, they just delay the start of charging so that it will be done before the departure time. One step smarter would be to also have a Off-Peak rate window defined and departure time, so the charging RATE would be reduced to spread out the charging over the available time. This would require not only override controls for "charge now" but also "charge fastest" since the default behavior would be Off-Peak and as slow as possible, at least when at home.

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California and NEMS future?

cpa

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Robert.Boston

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cpa

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Saghost

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Robert.Boston

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miimura

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