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New monthly fee for Arizona solar customers
- Thread starter tigerade
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- Energy Environment Policy
rolosrevenge
Dr. EVS
But they are charging everyone that fee, then the solar customers get it paid back through net metering, and now the utilities are levying it again. I agree though that it would save time to just include it for everyone from the start and save the run around.
ToddRLockwood
Active Member
Green Mountain Power makes their "net" calculation based on dollars, not kW hours. The energy a solar customer puts into the grid goes through a separate meter, and is calculated at a different kWh rate than the energy that customer uses. So in the end, it's dollars vs. dollars.
manitou820
Member
At my house I have two separate meters, one for our house (with grid-tied solar) and one for our guest house. Our guest house rarely uses any electricity all summer long yet I'm charged $14/month for the basic connection fee. With our house, in the months I generate excess electricity, I'm also charged $14/month. The utility company is already charging $168/year for every residential customer connected to the grid, regardless on their energy usage. So why do they need to charge another fee for solar customers? This seems more likely a way to generate extra income and discourage solar than any real financial need.
The simple answer is that $14 is not enough to cover grid costs. They come up with a monthly fee that covers something but it doesn't cover the entire fixed costs associated with the grid - I generally think they make is some number that sounds reasonable.
Wholesale Kwh's cost about $.04 when generated by average efficiency coal or NG. Nearly everyone pays more than that and that charge pays for the grid + regulatory costs + profit. With net metering, you are essentially getting paid $.12 for Kwh (or whatever your retail is), which is 3 times what the utility should be paying.
Solar should be encouraged. Net metering is a subsidy - plane and simple. Complaining that the subsidy should continue is fair but the counter argument that subsidies are inherently unfair can't be ignored.
In NC, they are still playing around with what to do. I get net metering. I got a huge subsidy from the utility but I had to go on a TOU-D rate plan. This plan has a $15 a month fee (before I was $0) and I have to pay a fee ($4-5 depending on season) per peak Kwh during peak time used in a month. My typical peak is 4 so that fee is typically $20. I then pay close to wholesale for electricity. So I have $35 a month in grid costs even if I zero out my Kwh.
It really is fair way of doing it. They have to have the grid and peak capacity to handle my peak. If I get a battery to handle my peaks, then my monthly could go down. If I manage my peaks, my monthly goes down.
The fact is, in my climate with my nearly all electric house and an EV, I haven't zeroed out yet. Maybe in the spring.
Anyway, in my below average cost for energy area, the utility gets $35 a month from a zeroed out solar house. In CA, I presume that the cost would/should be double. That is reality and complaining that it is a big bad utility trying to discourage solar is counterproductive. They are trying to level the playing field.
Wholesale Kwh's cost about $.04 when generated by average efficiency coal or NG. Nearly everyone pays more than that and that charge pays for the grid + regulatory costs + profit. With net metering, you are essentially getting paid $.12 for Kwh (or whatever your retail is), which is 3 times what the utility should be paying.
Solar should be encouraged. Net metering is a subsidy - plane and simple. Complaining that the subsidy should continue is fair but the counter argument that subsidies are inherently unfair can't be ignored.
In NC, they are still playing around with what to do. I get net metering. I got a huge subsidy from the utility but I had to go on a TOU-D rate plan. This plan has a $15 a month fee (before I was $0) and I have to pay a fee ($4-5 depending on season) per peak Kwh during peak time used in a month. My typical peak is 4 so that fee is typically $20. I then pay close to wholesale for electricity. So I have $35 a month in grid costs even if I zero out my Kwh.
It really is fair way of doing it. They have to have the grid and peak capacity to handle my peak. If I get a battery to handle my peaks, then my monthly could go down. If I manage my peaks, my monthly goes down.
The fact is, in my climate with my nearly all electric house and an EV, I haven't zeroed out yet. Maybe in the spring.
Anyway, in my below average cost for energy area, the utility gets $35 a month from a zeroed out solar house. In CA, I presume that the cost would/should be double. That is reality and complaining that it is a big bad utility trying to discourage solar is counterproductive. They are trying to level the playing field.
The main reason is likely that as a solar customer, you put more strain on the grid than someone without generation.
The 14$/month are mostly for the billing, metering etc. that they're doing, and of course providing power to be "at the ready" whenever you switch lights on at your guest house.
Solar generation adds a new kind of stress to the grid: bottom-up energy generation. In the old model, with pretty much only centralised production, it was much easier to predict and balance the way loads are flowing on the grid, and thus easy to figure out which line you can take offline when for maintenance etc.
Now, you do not know how e.g. the voltage behaves after your last transformer, on a string of connected houses. It might spike because there is 3 houses in a row with a lot of solar generation, and it's a sunny day. This is easily capable of exceeding the allowed amount of voltage, and that can cause damage to the grid and possibly devices that are connected to the grid. And it's the utilities responsibility to make sure the allowed voltage is not exceeded.
It's true that solar generation, by means of local production, can reduce the strain on the grid - at times. But, at least over here in Germany, Solar generation for households is pretty much un-monitored and un-controlable. It's a huge unknown in a grid which is a very delicate system ( the grid goes offline when it loses 2% of frequency.), and thus solar generators require special attention (=cost) from the grid provider.
Also, as Robert.Boston pointed out: It's the utilities that end up marketing and distributing the power you generate. Not sure about the USA, but in Germany we had energy generation and energy transmission "unbundled", i.e. it's done by different companies. And there is all kinds of charges going back and forth for connectivity to the grid, primary and secondary reserve services etc. etc.
omgwtfbyobbq
Active Member
I'm in agreement with Robert.
However the big "gotcha" is that utilities may not be the best at providing accurate information regarding their actual costs, especially when they have a significant incentive to favor a large generator versus a set of smaller generators.
Assuming the utilities are actually accounting for the total costs of net energy accurately, eg they're crediting the marginal load following/peaking capacity cost to the homeowner, as opposed to the average cost, or something else, and the utility has enough capacity to offset any savings they may see from not paying higher rates on-peak rates to generators, then the charge is reasonable.
With that said, until I see real time generation data, along with a history of real time pricing, compared to the utilities total costs for homeowners that have solar, I wouldn't necessarily agree with this charge, especially given the buzz I've heard from a local utility about integrating small generators.
However the big "gotcha" is that utilities may not be the best at providing accurate information regarding their actual costs, especially when they have a significant incentive to favor a large generator versus a set of smaller generators.
Assuming the utilities are actually accounting for the total costs of net energy accurately, eg they're crediting the marginal load following/peaking capacity cost to the homeowner, as opposed to the average cost, or something else, and the utility has enough capacity to offset any savings they may see from not paying higher rates on-peak rates to generators, then the charge is reasonable.
With that said, until I see real time generation data, along with a history of real time pricing, compared to the utilities total costs for homeowners that have solar, I wouldn't necessarily agree with this charge, especially given the buzz I've heard from a local utility about integrating small generators.
That's not strictly speaking accurate. Net metering is only a subsidy when the costs of the utility outweigh the reduction in costs from the peaking/load-following generation of the homeowner's solar panels. This depends a lot on area. Someplace like Montana likely doesn't have a lot of load-following/peaking demand that's replaced by solar panels. Someplace like CA otoh, may see several days during the year when utilites pay in excess of $1/kWh for peak load, compared to the ~.03c/kWh they may pay for off-peak loads in the winter. In that context, one day of peak generation may offset the cost of a month of use in winter. Of course this very much depends on the specifics, and that's why thorough accounting and realistic cost estimates need to follow any net-metering charges.
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Sure, but paying $1 per kwh for peak in the US in 2013 is crazy. This crazy is brought on by the regulatory environment in CA. I think even a die hard CA liberal would agree that the rules and regs in CA bring about strange market conditions that are absurd.
Peaking can be done with cheap NG plants using cheap NG. If you can't invest in them because a government says you can't, that is of course an indirect subsidy for solar.
In my climate (NC is #4 for solar installations), our greatest peak use is early morning in the winter (source is report from co-op). No question, late afternoon in August is close but the utility has to be ready and available for early AM winter. That co-op is in the SE corner of the state - ie the warmest.
Solar seems to make the most sense financially for the utility in areas like SoCal and Arizona. But even there, I suspect $15 a month doesn't cover the necessary grid costs. Sure utilities may use accounting to overestimate their costs but I would still suspect that $15 is a steal. Now - for the guest house, it is overkill but anyone who has a guest house can surely handle that little inequality in billing.....
This is where peak demand charge makes a lot of sense. If the guest house just has a few LED lights, the charge would be very small. If it has a heat pump and electric hot water heater, it would be much higher.
Peaking can be done with cheap NG plants using cheap NG. If you can't invest in them because a government says you can't, that is of course an indirect subsidy for solar.
In my climate (NC is #4 for solar installations), our greatest peak use is early morning in the winter (source is report from co-op). No question, late afternoon in August is close but the utility has to be ready and available for early AM winter. That co-op is in the SE corner of the state - ie the warmest.
Solar seems to make the most sense financially for the utility in areas like SoCal and Arizona. But even there, I suspect $15 a month doesn't cover the necessary grid costs. Sure utilities may use accounting to overestimate their costs but I would still suspect that $15 is a steal. Now - for the guest house, it is overkill but anyone who has a guest house can surely handle that little inequality in billing.....
This is where peak demand charge makes a lot of sense. If the guest house just has a few LED lights, the charge would be very small. If it has a heat pump and electric hot water heater, it would be much higher.
omgwtfbyobbq
Active Member
David, $1/kWh has nothing to do with CA's regulatory environment. It has to do with it's climate. Specifically, demand during most of the year is modest, and during summer heat waves, demand can be roughly twice that of demand during the rest of the year.
http://www.caiso.com/Pages/TodaysOutlook.aspx
http://www.caiso.com/Documents/CaliforniaISOPeakLoadHistory.pdf
The peaking is done with cheap (eg low efficiency) NG plants using cheap NG, but it's still very expensive per kWh because those plants only run a couple weeks per year.
CA isn't the only market with extremely high prices during certain times of the year. Virtually every market has them.
http://www.greencarcongress.com/201...and-very-high-wholesale-prices-in-texas-.html
In terms of how much it costs, at least in CA, for the connection/meter/billing, I think that's something like $8/month, based on this rate schedule.
https://www.sce.com/NR/sc3/tm2/pdf/ce55-12.pdf
Which seems reasonable since bills are automatically generated and accounts automatically debited, houses are usually only hooked up once, and so on...
Because owners with PV panels generally are competing with the most expensive forms of energy, peaking/load following, it would take a lot of owners hooking up to the grid before it would actually cause considerable costs to a utility.
http://www.caiso.com/Pages/TodaysOutlook.aspx
http://www.caiso.com/Documents/CaliforniaISOPeakLoadHistory.pdf
The peaking is done with cheap (eg low efficiency) NG plants using cheap NG, but it's still very expensive per kWh because those plants only run a couple weeks per year.
CA isn't the only market with extremely high prices during certain times of the year. Virtually every market has them.
http://www.greencarcongress.com/201...and-very-high-wholesale-prices-in-texas-.html
In terms of how much it costs, at least in CA, for the connection/meter/billing, I think that's something like $8/month, based on this rate schedule.
https://www.sce.com/NR/sc3/tm2/pdf/ce55-12.pdf
Which seems reasonable since bills are automatically generated and accounts automatically debited, houses are usually only hooked up once, and so on...
Because owners with PV panels generally are competing with the most expensive forms of energy, peaking/load following, it would take a lot of owners hooking up to the grid before it would actually cause considerable costs to a utility.
You shouldn't.
In New York, we pay a rather substantial base connection fee (I think it was around $18/mo last I checked). That is designed to cover the grid costs. We ALL pay it. It makes no sense whatsoever to charge a flat fee to people with solar panels but NOT to everyone else -- everyone else is using pretty much exactly the same grid services. Charge it to everyone.
Charging *anyone* for fixed costs with a per kwh charge is an unsustainable model, and the NY utilities commission admitted that years ago.
Charging a fee to people with solar panels *only*, while exempting people without solar panels -- as they are doing in AZ and, apparently, VA -- consists of a large subsidy for people who use relatively little electricity but *don't* have solar panels. That makes no sense and is simply biased against solar panel owners.
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If it costs $2000 to go off-grid and they don't increase the fee, the payoff is in roughly 20 years. But if the utility is willing to gratuitiously charge fees in order to try to discourage solar panels, you can expect them to increase the fee -- if they double it, payoff is more likely to be in 10 years. The utility ASKED for a $100+ fee, which is simply an attempt to intimidate, but would mean a payoff within less than 10 years even if it's quite expensive to go off the grid.
Did you do the math?
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This is Arizona at issue here. Off-grid options are gonna be cheaper there than anywhere else in the country. (Clouds? What are these "clouds" you speak of?)
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This would be tolerable, but it's important to understand that charging for any fixed costs on a per kWh basis is an explicit subsidy from large single-site electricity users to small electricity users. That may be a reasonable subsidy to make, but it's important to realize that it's being done.
Going off-grid because of a new fee of less than $100/mo is ridiculous. It costs about $10,000 for the inverters and batteries to go off-grid and that doesn't include any solar or backup generation. The only time it actually makes economic sense to go off-grid is when you have a property that does not have existing electrical service and the utility wants to charge 10's of thousands of dollars to get you connected.
Ok - I'm going to go along with your argument for a little bit here.
In the Texas example, they were referring to extremely high prices for 1 hour in a year. It was a record. What you are saying is that this makes up for the other 364 days in the year or the other 8759 hours in the year.
Or maybe more realistically, in CA the utility pays $1 an hour for 3 hours a day for 14 days a year. So the 42 hours of extremely high priced energy makes up for the 8718 hours that aren't? You are at .5% and you are talking a 25 times increase in price - that is a blip. The vast majority of the time the solar is displacing 4 cents an hour electricity. So sure, it helps that solar is generating well during those peak times but making the average 5 cents is probably hard to do even with the 2 weeks of heat wave.
Texas has a very peculiar regulatory market also and they have seen electric rates through the roof over the last few years. For better or worse.
The right strategy in CA is to shut down all industrial use of electricity for those 42 hours a year. Something I am sure they already do. The other easy thing is residential peak demand throttling which they do in NC but only pay people $25 a year to do it (so I'm sure they don't get many takers).
What always surprises me is that I live in the South. A/C represents less than 10% of my electric needs. We pay a higher peak charge in the summer ($5 vs $3.80) and surprisingly I am running higher peaks in the winter. List of things that use more energy (both peak and aggregate) - hot water, heat pump, dryer, car.
In the Texas example, they were referring to extremely high prices for 1 hour in a year. It was a record. What you are saying is that this makes up for the other 364 days in the year or the other 8759 hours in the year.
Or maybe more realistically, in CA the utility pays $1 an hour for 3 hours a day for 14 days a year. So the 42 hours of extremely high priced energy makes up for the 8718 hours that aren't? You are at .5% and you are talking a 25 times increase in price - that is a blip. The vast majority of the time the solar is displacing 4 cents an hour electricity. So sure, it helps that solar is generating well during those peak times but making the average 5 cents is probably hard to do even with the 2 weeks of heat wave.
Texas has a very peculiar regulatory market also and they have seen electric rates through the roof over the last few years. For better or worse.
The right strategy in CA is to shut down all industrial use of electricity for those 42 hours a year. Something I am sure they already do. The other easy thing is residential peak demand throttling which they do in NC but only pay people $25 a year to do it (so I'm sure they don't get many takers).
What always surprises me is that I live in the South. A/C represents less than 10% of my electric needs. We pay a higher peak charge in the summer ($5 vs $3.80) and surprisingly I am running higher peaks in the winter. List of things that use more energy (both peak and aggregate) - hot water, heat pump, dryer, car.
ZBB
Emperor
Contrary to the tourist brochures, AZ does have cloudy days. It's rare -- but we even get multiple days in a row of overcast conditions. A week ago is a good example -- the same storm that messed up all the Thanksgiving traffic is the Midwest and East took 3 days to pass through AZ -- it was cloudy from Thurs to Sunday mid day...
Depends on the size of your electrical load, surely? Some energy-efficiency nuts with small houses have extremely low electrical loads to start with, and have sat down and discovered that the cost of being on-grid is rather high already.
omgwtfbyobbq
Active Member
That's not what I'm saying. What I'm saying is that the energy provided by solar panels in areas with high loads during the afternoon is generally displacing more expensive energy. The only exception would be if a consumer used all their energy at peak demand, but I know of no one who uses electricity like that.
In CA, and probably most other areas, the cost of a grid connection is very low, something like 1c/kWh or less based on the data in CA from my last post. What this implies is that as long as the value of the energy generated by solar panels is ~1c (or less) more than the value of the energy used by the customer, net energy metering costs the utility nothing.
It's not only that the utility pays $1/hour for 3 hours a day/14 days a year on the high end, but that they also pay something like ~$.05-.10c/kWh for load following natural gas in the winter on the low end. This compares with baseload at only a few cents per kWh.
Because most consumers use energy though out the day, with some of that being more expensive on-peak or load following, and some of that being less expensive off-peak or baseload, in the aggregate, this implies that the levelized value of the energy a consumer generates is going to be greater than the cost of the energy they use in regions like CA. As long as the difference is ~1c/kWh, there is no subsidy for the consumer.
In cold regions where solar panels are only competing with baseload, and the utility has night time peaks, then net energy would be a subsidy. But in most places where there a higher A/C (and other) loads in the afternoons, it probably isn't given the current level of grid penetration. In fact, I would imagine that most net energy agreements represent a cash benefit for utilities because the difference in value between energy used and generated in most places where we have a lot of homeowner generated solar power is greater than ~$.01/kWh.
ERCOTT is kind of isolated, and it looks like the average real-time prices are driven by extreme weather events.
http://www.potomaceconomics.com/uploads/ercot_documents/2011_ERCOT_SOM_REPORT.pdf
http://www.ferc.gov/market-oversight/mkt-electric/texas.asp
~$50-$60/MWh seems to be the average, although they have been as low as $30/MWh. Once Tres Amigas is completed, prices for the west, east, and ercott should drop since Texas could tap the east/west for energy if they need it and also build/export a lot more wind power.
The best strategy is doing both. The problem with throttling demand is that if people/businesses start opting out, then a utility needs to cut demand, and they'll do so in a controlled or uncontrolled manner, which usually comes via normal/rolling blackouts. Both additional generating capacity and DSM are good for the grid.
I can see that, although I imagine that there are quite a few people who use gas and have higher afternoon peaks in the summer.
http://www.duke-energy.com/news/releases/2012072702.asp
manitou820
Member
I need some proof of this. I monitor my solar output and grid usage pretty carefully and even with the worst days (snow covered panels) I have very little usage during peak hours. I have no air conditioning (I live in CO) so my peak loads during the summer only happen at night when I am charging my car. If the utilities want to monitor peak usage for solar customers and charge an extra fee during those times, that would make sense. But a flat fee makes no sense. My house, during the day, with no one home, no lights on, and probably a max of a coupe of hundred watts is nothing compared to the 2kw I generate even during a cloudy day. And if anything, by me offsetting my usage with excess during the peak hours, and drawing power at night during their off peak times, is a huge benefit.
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I agree that today it doesn't make sense. But it utilities are considering $100/mo fees like Arizona originally proposed, then it will only encourage more companies to develop cheaper off grid options. $5-$10 per month is not a big deal. But if they tack on a big fee it makes the justification of going off grid much more palatable.
I will gladly go off grid as soon as it makes financial sense. With a big influx of used EV batteries coming onto the market shortly, combined with advances in fuel cells with methane reformers, I don't think it will be that long before used a EV battery back combined with a small fuel cell (or even a natural gas generator) will allow solar customers to go off grid for pretty cheap.
nwdiver
Well-Known Member
Making off-grid living economically attractive is something we must work to PREVENT. What good are Solar Panels when the batteries are charged and you're at work or on vacation? We can't afford to squander energy due to petty in-fighting between for-profit utilities and their prey. The idea of "Net-Metering" needs to be retired. The ideal system would reward self-consumption and not penalize self-generation while still collecting enough revenue to maintain the grid. A fee structure that charged $0.10/kWh for imports but only paid ~$0.075 for exports with no monthly fee for solar would be much preferred to pushing customers off-grid. You can still get batteries so you never pay for grid power but once the batteries are charged and demand is low you can still export power to people unable or unwilling to get solar.
rolosrevenge
Dr. EVS
Did you do the math? Specifically, I'd like to see the simulations, for two full years of your energy use, using historical data of actual use, solar irradiance, and the smallest system solar and battery system required to ensure that all of your power and energy needs are met 99.9% of the time (utility level reliability). To be more accurate, you should do 5 years of historical data along with Monte Carlo simulations for various weather patterns. I'll bet you can't get off the grid for less than $10k.
According to this data you're going to have cloud cover at least 10% of the days, if not more depending where you live. To handle even two days of consecutive cloud cover, your system will need to be 3 times larger than your average usage. If you need help setting up those timeseries simulations let me know, used similar simulations in my dissertation work.
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nwdiver
Well-Known Member
I oppose going off-grid 100%; My concern is that some utilities will make it financially attractive in an ill-conceived attempt to maintain their profits as demand falls off a cliff in the next decade. A 10kw generator that runs on nat gas is <$3k... that can b/u a PV system during times of low insolation. Once the production credits in NM are gone (probably next year) the ROI for going off-grid in the Xcel service area in NM will be ~10 years. This is idiotic... I called my commissioner to tell them the problem with their fee structure and how EVEN TEXAS makes more sense and was told ,"If you don't like it then move". I pay $0.023/kWh that I PRODUCE... my system produces ~18000 kWh/yr so I pay >$400/yr for the grid.
My point is this; if you have solar or want solar or care about solar keep an eye on your utility commission because they might allow your utility to pull crap like this. AND... if you pay your electric bill to Xcel in NM please contact me... I need help fixing this.
http://www.nmprc.state.nm.us/consum...rectory/electric/xcel-energy/rates/rate59.pdf
My point is this; if you have solar or want solar or care about solar keep an eye on your utility commission because they might allow your utility to pull crap like this. AND... if you pay your electric bill to Xcel in NM please contact me... I need help fixing this.
http://www.nmprc.state.nm.us/consum...rectory/electric/xcel-energy/rates/rate59.pdf
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