Koch Brothers Attack Net Metering and Solar

[Cottonwood]

See Arizona SRP proposing to halve Net Metering and jack Monthly Fees for an example in Arizona.

 

[3mp_kwh]

I've mentioned this in other threads, but several energy companies are indeed changing their approach. For the past 5 years or so, my co-op has changed its approach to fixed cost vs. variable cost. It has raised the connection / meter fee (from an original $17ish/month when I started a number of years ago to a current price of ~$40/month, while lowering (or at least attenuating the increases of) the variable costs. This helps to solve the primary argument that non-solar customers subsidize solar customers' use of the grid as a battery.

The downside of this approach is that anyone who consumes less than 1,000 kWh/month sees a higher bill overall, but it does bring into line the fixed costs of a grid connection and the plant maintenance & depreciation costs. You could say that under the usage-based model, I'm subsidizing the farmers who want a meter at a lean-to, 3 miles into their field, for $5/mo.

Bold mine. This is the window through which demand charges and AMI metering are being pushed by utilities. Truth be told, I think smart meters may become a necessity in fixed cost recovery, but their ability to provide utilities reporting on instantaneous load is a revenue source waiting to happen (hardware and monthly).

A better solution for net-metering could be to keep the <1,000kwh (non-solar) consumer's cost lower, and track the watts of the net metered solar customer, as they go back to the utility. As they break monthly volume thresholds, a fair toll could be established on the predictable volumes of solar production. If one gets net metered out for 1,000kwh/month, it could cost $50, where the 2kw PV customer, producing much less, would pay maybe $30. In the end, if we're all getting away from kwh rates, these costs, and the <1,000 base customer's hook-up fee would go up.

Demand charges are a slap to solar generators, who peak just once a day. And it is load balancing supply, not demand. The commercial entities who more typically pay them, have many more daily peaks and manage for them. There is no way for a solar owner not to be a sitting duck. I think someone on SRP's staff was quoted as suggesting solar owners should face their panels in the direction that corresponds to their own electric needs. Imagine that? SRP would gauge its charge inside just 15 minutes, each month.

 

[Robert.Boston]

There's a concept in the power industry called "coincident peak." It really doesn't matter much if you use 3x your usual amount of power at midnight; there's a lot of surplus resources (generation, transmission, ancillary services) to handle that. What is costly is when a customer's peak demand lines up with the system's peak demand. If we charged people based on coincident peak rather than non-coincident peak, the results would be markedly different.

 

[Cottonwood]

There's a concept in the power industry called "coincident peak." It really doesn't matter much if you use 3x your usual amount of power at midnight; there's a lot of surplus resources (generation, transmission, ancillary services) to handle that. What is costly is when a customer's peak demand lines up with the system's peak demand. If we charged people based on coincident peak rather than non-coincident peak, the results would be markedly different.

That is a very important point. The typical home solar impact it to create a negative peak (pumping solar power into the grid) when the grid is at its peak draw, and to have a normal peak (usage) when the grid is off-peak. Home solar tends to reduce the "coincident peak," which is good for the grid, not harmful.

 

[miimura]

There's a concept in the power industry called "coincident peak." It really doesn't matter much if you use 3x your usual amount of power at midnight; there's a lot of surplus resources (generation, transmission, ancillary services) to handle that. What is costly is when a customer's peak demand lines up with the system's peak demand. If we charged people based on coincident peak rather than non-coincident peak, the results would be markedly different.

We can come up with all kinds of rate strategies that make sense for aligning charges to the state of the grid, such as charging more for "coincident peaks" than off-peak peaks. However, the fundamental problem is getting customers to understand it and having any predictability to consumer utility bills. In addition, most consumers don't have the ability or willingness to shift their load.

 

[rolosrevenge]

We can come up with all kinds of rate strategies that make sense for aligning charges to the state of the grid, such as charging more for "coincident peaks" than off-peak peaks. However, the fundamental problem is getting customers to understand it and having any predictability to consumer utility bills. In addition, most consumers don't have the ability or willingness to shift their load.

This is one of the main reasons I don't think the grid will ever go away. Most people don't want to be bothered with altering usage to get slightly better economics. They definitely don't want to have to worry about producing and storing adequate power constantly, let alone fixing anything that should go wrong.

 

[3mp_kwh]

We can come up with all kinds of rate strategies that make sense for aligning charges to the state of the grid, such as charging more for "coincident peaks" than off-peak peaks. However, the fundamental problem is getting customers to understand it and having any predictability to consumer utility bills. In addition, most consumers don't have the ability or willingness to shift their load.

The utilities generally don't want the idea that customers will shift load, to be understood in my opinion. Still thinking about SRP, for example, they acknowledge 86,000, of 1mm, customers signed up for TOU (in the 127 page report). That's pretty high, even if they are overly penalized with a $.20 on-peak rate (relative to $.11 base). There's very little promotion of TOU, accept word of mouth and EV forums. That's been my experience.

TOU can be defended without subsidy. The effect of extreme dilution of net-metering policies, as they contribute during "coincident peak", can leave the base rate payer as the subsidized party. They push peak load. It's sad, but I think utilities prefer this, and that savvy customers just shut-up and go away. Higher peak load means the justification for more bonds, or more ROE on new assets. The advisory (ratings) relationship works this way, beyond what I bet many utility managers understand.

 

[ItsNotAboutTheMoney]

That is a very important point. The typical home solar impact it to create a negative peak (pumping solar power into the grid) when the grid is at its peak draw, and to have a normal peak (usage) when the grid is off-peak. Home solar tends to reduce the "coincident peak," which is good for the grid, not harmful.

Except that solar production doesn't really match coincident peak, because it's intermittant. The solar problem is that it displaces fuel rather than capital costs, and fuel is generally the cheap bit. That's why Tesla is chasing cheap batteries so hard. Solar + battery can displace both capital and fuel costs so cheap batteries will be massively disruptive.

 

[miimura]

The utilities generally don't want the idea that customers will shift load, to be understood in my opinion. Still thinking about SRP, for example, they acknowledge 86,000, of 1mm, customers signed up for TOU (in the 127 page report). That's pretty high, even if they are overly penalized with a $.20 on-peak rate (relative to $.11 base). There's very little promotion of TOU, accept word of mouth and EV forums. That's been my experience.

TOU can be defended without subsidy. The effect of extreme dilution of net-metering policies, as they contribute during "coincident peak", can leave the base rate payer as the subsidized party. They push peak load. It's sad, but I think utilities prefer this, and that savvy customers just shut-up and go away. Higher peak load means the justification for more bonds, or more ROE on new assets. The advisory (ratings) relationship works this way, beyond what I bet many utility managers understand.

You and I have a different idea about what "overly penalized" means for TOU customers. PG&E's EV TOU E-9 tariff has total bundled prices/kWh that vary from 6.5c/13.0c/34.5c up to 18.5c/33.5c/55.0c depending on your monthly usage. Those three prices are Summer Off-Peak/Part-Peak/Peak respectively. The price range is pushed artificially low at low usage and Off-Peak to encourage vehicle charging between midnight and 7am. 6 months ago that same Summer Off-Peak number of 6.5c was 4.85cents.

 

[omgwtfbyobbq]

This is one of the main reasons I don't think the grid will ever go away. Most people don't want to be bothered with altering usage to get slightly better economics. They definitely don't want to have to worry about producing and storing adequate power constantly, let alone fixing anything that should go wrong.

Ideally, people won't have to think about it. They'll have a little computer tucked away someplace that's pushing as much use as it can into the day time hours to fit well with solar production. Dispatchable demand would be good for the utilities too.

 

[cpa]

You and I have a different idea about what "overly penalized" means for TOU customers. PG&E's EV TOU E-9 tariff has total bundled prices/kWh that vary from 6.5c/13.0c/34.5c up to 18.5c/33.5c/55.0c depending on your monthly usage. Those three prices are Summer Off-Peak/Part-Peak/Peak respectively. The price range is pushed artificially low at low usage and Off-Peak to encourage vehicle charging between midnight and 7am. 6 months ago that same Summer Off-Peak number of 6.5c was 4.85cents.

We too live in PG&E territory, but in the hot Central Valley. TOU makes absolutely zero financial sense for us because come summer (anywhere from late May to mid-June) the overnight lows are 70-75 and the daytime highs can reach 108-110+, sometimes as early as 11AM on those scorchers. We have about an eight-week window out of the six-month "summer" rate season where we might be better off with TOU rates rather than the standard rates. Our rooftop solar at least allows us to remain in the baseline tier for the entire year.

I think that with any blanket approach to utility charges and assessments and fees, there will be winners and losers. While regrettable, it is inevitable.

 

[miimura]

We too live in PG&E territory, but in the hot Central Valley. TOU makes absolutely zero financial sense for us because come summer (anywhere from late May to mid-June) the overnight lows are 70-75 and the daytime highs can reach 108-110+, sometimes as early as 11AM on those scorchers. We have about an eight-week window out of the six-month "summer" rate season where we might be better off with TOU rates rather than the standard rates. Our rooftop solar at least allows us to remain in the baseline tier for the entire year.

I think that with any blanket approach to utility charges and assessments and fees, there will be winners and losers. While regrettable, it is inevitable.

Anywhere in PG&E territory that you have a need for a lot of A/C you should get a separate meter for EV charging off peak. There is a pilot program right now that allows the EVSE to be a sub-meter so you don't have to go to the expense to install a separate utility meter at your demarc. They use the SmartMeter data to subtract your vehicle charging from your house meter.

I have made a spreadsheet that calculates PG&E charges from SmartMeter data. If anyone who uses a lot of A/C is willing to send me their data, I would like to do a rate comparison. I would of course send you the results of my analysis. Here's an example of my work: True added cost of home EV charging on PGE

 

[3mp_kwh]

You and I have a different idea about what "overly penalized" means for TOU customers. PG&E's EV TOU E-9 tariff has total bundled prices/kWh that vary from 6.5c/13.0c/34.5c up to 18.5c/33.5c/55.0c depending on your monthly usage. Those three prices are Summer Off-Peak/Part-Peak/Peak respectively. The price range is pushed artificially low at low usage and Off-Peak to encourage vehicle charging between midnight and 7am. 6 months ago that same Summer Off-Peak number of 6.5c was 4.85cents.

I wasn't talking about the PG&E TOU customer. Let me better frame what SRP's TOU customers face. Their off-peak rate is .07 versus .20 peak. "over penalized", to me, is when either the load shifting to the off-peak hours has to be really high (like 3:1) to be worth it, or when a utility encourages its base to throw its hands up and say "may as well drill my a/c during the day", at a flat .11.

If an alternative to PG&E's E-9 TOU gave you an option for a flat $.09/kwh, against your first tier, off-peak, rates of 6.5, and on peak rate of 34.5, would you then feel penalized at the TOU peak rate? CA may under charge in the off-peak, and AZ may over-charge in the on-peak. My point was how the base rate payer makes out, relative to the efforts of the TOU customer. I know if I went back to base rates, my off-peak to peak ratio would tighten up, a lot. That costs everyone, as peak load rises.

 

[neroden]

I've mentioned this in other threads, but several energy companies are indeed changing their approach. For the past 5 years or so, my co-op has changed its approach to fixed cost vs. variable cost. It has raised the connection / meter fee (from an original $17ish/month when I started a number of years ago to a current price of ~$40/month, while lowering (or at least attenuating the increases of) the variable costs. This helps to solve the primary argument that non-solar customers subsidize solar customers' use of the grid as a battery.

The downside of this approach is that anyone who consumes less than 1,000 kWh/month sees a higher bill overall, but it does bring into line the fixed costs of a grid connection and the plant maintenance & depreciation costs. You could say that under the usage-based model, I'm subsidizing the farmers who want a meter at a lean-to, 3 miles into their field, for $5/mo.

This is going to drive grid defection. At $40/month (!!!!) that's $480/year.

Suppose you use 1000 kWh/month evenly spread across the days, and you use 1/3 of your power at night. I did some casual research, and you can get 12 kW of battery for $2580.

That's equivalent to 6 years of fixed charges at the rates you are paying. The batteries should last that long.

At such outrageous basic connection charges, anyone with low usage per month should go off grid immediately -- it's a no-brainer.

Here where I am, my fixed charge is $16/month or so. This isn't going to drive people off the grid. $40/month WILL, and VERY FAST.

High fixed charges encourage efficient households to go off-grid. This is not well-thought-out, as this will induce a death spiral for the utilities.

I will further note that the drug-addled lunatics at HECO in Hawaii are proposing a $50/month, or higher, fee:

As Hawaii Prepares for Utility Reform, the States Solar Industry Sheds 3,000 Workers : Greentech Media

This will make local batteries a no-brainer and completely eliminate the grid on Oahu *very, very quickly*. It is a plan for accelerated bankruptcy. The government may intervene to save HECO from its own management; except for that possibility, I'd be very tempted to short-sell Hawaiian Electric.

 

[ZsoZso]

I agree with the Koch brothers. Every energy producer should be taxed for ALL the costs caused by them. Which means the coal based energy producers have to pay for all the damage done by their pollution: all the health costs caused by coal pollutions as well as all the damage caused by the CO2 they pump into the atmosphere, i.e. a very radical level of carbon tax. The health costs alone would bankrupt them within a few years, so let's go ahead with this system!

 

[FlasherZ]

neroden, note that the overall revenue to the co-op didn't go up. It redistributed pricing based on the actual cost to maintain the grid. Those who used less than 1,200 kWh saw their bill go up, while those who use more than 1,200 kWh saw their bill go down. Usage charges were either reduced or growth-arrested to compensate. It's just a reallocation of fixed vs. variable costs.

So when you look at off-grid vs. on-grid, let's look at those who consume an average of 1,000 kWh per month. A 9 kW solar installation will generate 12 MWh/year here, which would be what's needed -- however, you'll really need some excess capacity for those stretches of overcast days, so let's just assume a 20% buffer, bringing you to a 10.8 kW system. Solar installation here is $4/W. Without incentives, you're looking at a solar installation cost of $43,200, and I'll use your $2,580 for storage on top. Illinois will give you $10,000 (although it's unlikely it will remain next year) and you can take a federal tax credit of 30% on the remaining amount, saving you $10,734 there. Out of pocket is $25,046 on the solar PV system with storage.

Usage here costs 9c / kWh (my parents, 3 miles away, pay only 5c / kWh). At $40/month meter charge and 9 cents per kWh, you're looking at a yearly power bill of $480 + 1080 = $1560. Payback on this, then, is just over 16 years, not counting opportunity cost of the money, battery replacement, and inverter replacement (10 year rated life) as a negative factor or price inflation as a positive factor. In addition, very few people have the ability to lay out $25k out of pocket without having to pay interest on it around these parts.

As a result, the case isn't as cut-and-dried as one might think, although there would be a compelling case for the smallest consumers to throw up a couple of panels with a simple charge controller / inverter for those things like lights in tractor lean-tos and such, where the $40/month would be uneconomical.

 

[Robert.Boston]

When people pay $100/month for cable&internet and another $50/month for cell phones, $40/month to have access to buy or sell power on the grid is a great bargain. Very few people have the interest and expertise to go off-grid.

 

[neroden]

neroden, note that the overall revenue to the co-op didn't go up. It redistributed pricing based on the actual cost to maintain the grid. Those who used less than 1,200 kWh saw their bill go up, while those who use more than 1,200 kWh saw their bill go down. Usage charges were either reduced or growth-arrested to compensate. It's just a reallocation of fixed vs. variable costs.

So when you look at off-grid vs. on-grid, let's look at those who consume an average of 1,000 kWh per month. A 9 kW solar installation will generate 12 MWh/year here, which would be what's needed -- however, you'll really need some excess capacity for those stretches of overcast days, so let's just assume a 20% buffer, bringing you to a 10.8 kW system. Solar installation here is $4/W.

OK, I see what's going on. Installation prices are still excessive. The all-in cost in Germany is $2.80/watt, but in the US it's $4.87 a watt.

This is going to change very quickly. Competition in the solar installation market should bring the price down to the German level. That gives you $30660 all-in for solar + storage, before incentives.

Usage here costs 9c / kWh (my parents, 3 miles away, pay only 5c / kWh).

OK, so that's the second thing going on: due to your location, you have really, really cheap grid electricity. There are vast swathes of the country where it doesn't go below 10c/kwh. Not far away from me, I've heard quotes over 20c /kwh. And we already have fixed charges, they're just not as large as yours.

At $40/month meter charge and 9 cents per kWh, you're looking at a yearly power bill of $480 + 1080 = $1560. Payback on this, then, is just over 16 years,

So basically, the fixed charge is high but you have ludicrously cheap variable charges. A small increase in your grid rates overall, and the calculation starts mitigating in favor of going off-grid.

Putting all the charges on the variable side means that *large users* go off-grid. Putting lots of charges on the fixed side mean that *small users* go off-grid. I don't think the grid operator can win either way....

- - - Updated - - -

When people pay $100/month for cable&internet and another $50/month for cell phones, $40/month to have access to buy or sell power on the grid is a great bargain.

Really, really not. Well, I should say, maybe... but nwdiver's situation shows that high fixed charges can make going off the grid the better deal.
-- Internet's kind of a necessity. I'm being gouged, but I have very little option.
-- You can pay a lot less for cell phones (and I do) with prepaid plans.

The ability to *sell* to the grid may be worth something... but that depends on what price is being offered, as nwdiver pointed out.

Going off the grid is hard in the snowbelt, but in sunny climes it's *easy*. And at California grid electricity prices, it pays for itself quickly.

The evidence is that solar installation prices will have to drop, because they're far higher than in Germany (which has higher labor costs); more companies will move into the market until installation prices drop. We already know how fast panel prices are dropping. Battery prices are dropping too.

The grid has to underbid solar + storage in order to stay relevant. This will get harder and harder. It is easier in the snowbelt, where you can lose the sun for several days and need very large storage. It's much harder in the sunbelt.

 

[nwdiver]

$40/month to have access to buy or sell power on the grid is a great bargain.

I agree... as long as they allow you to sell and don't charge you for what you produce.

 

[FlasherZ]

OK, so that's the second thing going on: due to your location, you have really, really cheap grid electricity. There are vast swathes of the country where it doesn't go below 10c/kwh. Not far away from me, I've heard quotes over 20c /kwh. And we already have fixed charges, they're just not as large as yours.

Not to mention that beyond 2,000 kWh, we get a per-kWh discount (volume pricing) which is inverted from the California model.