I am writing to you on the matter of whether, and how much, public utilities should credit consumers who generate electricity and supply it back, running the meter "in reverse." I live and am a rate payer in Redwood City, California. However, I do not personally have solar or any other generation facility -- I simply write as a rate payer, voter, and concerned citizen.
From what I hear, currently, the utilities want to pay some fraction of their cheapest baseline rates. It makes sense to allow the utilities some mark-down -- say, 10% at the most -- but they already charge separately for meters, transmission, decommissioning, and other overhead, so a mark-down more than that would not be fair market value, nor would it be in the interest of the rate payers.
The question is also what rate to base the payment on. Utilities may suggest the lowest Tier-1 fixed-rate baseline rate. Customers generating overflow during peak hours may want to get paid the same they would pay, should they not have generated the power. This would probably be the highest, Tier-5, peak-time rates.
I think basing consumer-generated electricity compensation on anything lower than the Tier 1 cost for time-of-use customers would be too unfair to customers and not properly compensate those who do generate additional capacity according to demand. Basing paybacks on a higher tier would be preferable for generating customers, because they are generating top-line capacity to serve top-line demand that the utility is billing out elsewhere. However, the accounting and politicking involved would probably make basing it on a higher tier impractical.
Thus, a proper rate to use as a baseline would be something like the E-6 or E-9 Tier 1 rate for the time-of-use period during which the energy is actually generated. This means that excess energy sold back during summer peak times would currently be based on a $0.31 or $0.30 per kWh rate for capacity generated during summer peak time, minus whatever the discount is set at, and those rates would then be adjusted in tandem with the underlying rate payer rate.
Thanks for your attention to this input to the public decision making process,
<signed will full name, address and phone number>