User avatar
TonyWilliams
Posts: 10091
Joined: Sat Feb 19, 2011 1:48 am
Location: San Diego
Contact: Website

Re: SDG&E asks for higher rates on customers who go solar

Thu Nov 10, 2011 12:01 pm

EricH wrote: I have more sympathy with grandfathering the existing PV investors somehow, and modifying the deal to provide sustainable, open subsidies to future adopters.
That's nice of you to recognize that, after your description on how SDGE had their game changed after investing in expensive hardware to generate and distribute electricity.

It doesn't seem that SDGE has proposed anything but a retroactive change to the game for solar current solar installs.

User avatar
DaveEV
Posts: 6249
Joined: Fri Apr 23, 2010 3:51 pm
Location: San Diego

Re: SDG&E asks for higher rates on customers who go solar

Thu Nov 10, 2011 12:26 pm

EricH wrote:Then, after regulators screwed with the system around 2000, the utilities were stuck with a residential pricing structure that dumped the last decade of inflation and social costs on the highest users (Tiers 3-4-5).
SDG&E is already in the process of adjusting rates so that the baseline rate is no longer "subsidized" by tier 3-4 users (there is no tier 5 in SDG&E territory) from what I understand.

That said - I've always been OK with the subsidy as it gives people an incentive to stay out of the top 2 tiers and conserve electricity which is good for everyone. The 4-tier residential billing rate structure is pretty much a 2-tier system given the minimal difference in tiers 1-2 and 3-4. I wouldn't mind seeing a more consistent step between tiers.

But hey - if you want to make things fair, we should simply move to a billing system which charges you based on real-time market rates. Or at least make everyone move to a TOU rate which more accurately reflects the actual costs of delivering electricity to your house.

BTW - SDG&E is only obligated to hook up about 5% of their peak demand from net metered customers, or about 234MW of net metered generation. We're about half way there right now (103MW as of 7/1/2011). So SDG&E is going to get their chance regardless soon enough to modify net metered billing rates whether you like it or not - probably within 2-3 years at current rates of PV adoption.

LKK
Posts: 290
Joined: Sat Jan 15, 2011 10:27 am

Re: SDG&E asks for higher rates on customers who go solar

Thu Nov 10, 2011 7:21 pm

Thought you folks might be interested in this SDG&E Power Purchace Agreement. Not surprising, SDG&E pays more for daytime peak power than semi-peak or off-peak power. Here is the link:

http://docs.cpuc.ca.gov/published/Comme ... /65072.htm" onclick="window.open(this.href);return false;

Take a look at the section titled "Consistent Application of Time of Delivery ("TOD") Factors". Here's a summary:

Summer:
- Peak cost factor - 1.6293
- Semi-Peak cost factor - 1.0400
- Off-Peak cost factor - 0.8833

Winter:
- Peak cost factor - 1.0790
- Semi-Peak cost factor - 1.0400
- Off-Peak cost factor - 0.7928

Private solar users provide SDG&E with power during the peak period and trade this power on a one-for-one basis for off-peak power. During the summer this trade benifits SDG&E by 84%, in the winter this advantage drops to 36%.

SDG&E is not taking this benifit into considertion when they want to punish private solar generation.

SanDust
Posts: 1363
Joined: Fri Aug 06, 2010 10:54 am

Re: SDG&E asks for higher rates on customers who go solar

Thu Nov 10, 2011 11:00 pm

EricH wrote:If you find anything in this situation that resembles "competition", we had wildly different economics texts.
Of course a PV system is competition. You can buy your electricity from an electric utility or you can get it from from your roof. That's the essence of competition. In this case a PV system limits the price SDG&E can charge. If it ups the charges too much then its customers will put in more PV systems. FWIW SDG&E was upfront about this. It spent quite a substantial percentage of its filing talking about the falling costs of solar and how those falling costs affected the willingness of customers to continue buying power from it.

You seem to think that just because SDG&E is a regulated monopolist that there isn't any competition. There is. Right now it would be PV systems or maybe PV systems and battery storage. In ten years it will probably be a PV system and a fuel cell. Actually for SDG&E the whole green business is something of a wash. It is being hurt by the government subsidies for PV systems. On the other hand it's getting a huge boost from government subsidies of EVs. On balance there doesn't seem to be any reason to break out the violins.

In the medium run electric utilities will probably go the way of wireline phone companies. They have huge investments in fixed assets designed for transmitting power from central power stations but, as technology makes local generation cost competitive, that distribution network ends up as just another unnecessary cost. Right now SDG&E is at the start of a death spiral. It stupidly thinks that it can impose interconnection fees as a way of partially making up for revenue losses as customers adopt lower cost solar alternatives. But technology is relentless and solar users will simply find ways of not interconnecting. As they drop off the system SDG&E will have to replace that lost revenue by raising rates for existing customers. But this will simply have the effect of making solar more attractive, and more customers will go solar. Repeat until no one cares about SDG&E any more.

tbleakne
Gold Member
Posts: 988
Joined: Wed Jul 28, 2010 12:05 pm
Delivery Date: 03 Jun 2011
Leaf Number: 2400
Location: Claremont, CA

Re: SDG&E asks for higher rates on customers who go solar

Thu Dec 29, 2011 1:17 pm

EricH wrote:Utilities are much more concerned about the entire Net Energy Metering subsidy, whereby a customer who places solar panels on their roof can avoid any responsibility for the overall utility system costs, by feeding power into the grid at noon (credited at on-peak retail rates, for solar owners on TOU rates), then sucking it back off the system during the afternoon/evening and night.
>>>>>>>>>>>>>
I'm far more sympathetic to people who invested in solar last year, concerned the existing economics of their decision will be materially impacted, than I am to folks not-yet committed to solar, who are alarmed that the free ride of Net Energy Metering may be curtailed before they can sign a contract.
My solar system, designed to avoid my SCE bill being pushed into higher electric tiers by the energy demands of my Leaf, has just passed its first "birthday." Despite this, I support almost everything EricH is saying. Some "reform" is required, but please understand I do not endorse SDG&E's specific proposals. In the coming world in which 5%, 10%, or even 15% of total grid energy is supplied by residential solar, finding what is "fair" to connected customers with solar, customers without solar, and the utilities won't be easy. In some cases, what might seem fair in the abstract might not be economically viable in the details.

As EricH has discussed, the two state-wide policies that need modification as the percentage of residential solar installations has grown are:
1. The "freezing" of Baseline tier-1 rates, forcing an excessive inflation of upper-tier rates, and
2. The requirement that no matter what tariff you are on, TOU or standard, the price you are credited for net production at any time of day or season must be exactly equal to the price you are billed for net consumption during that same point in time.

These two policies have awarded the highest incentives to "go solar" to the highest-tier consumers. Before I got my Leaf, my household was too frugal in electric usage to justify solar, because the low rates for Baseline and tier 2 gave me too slow a payback for solar production. Now, with both the Leaf and TOU metering, I have a strong incentive to increase my grid production, because it pushes me deeper into the Level 2 tier of SCE TOU, in which during the Summer I get $.30/kWh for delivery and $.30/kWh more for generation. SCE has stated that these prices have no connection with the reality of their costs.

I suggest that making the tiers less progressive (unfreezing of Baseline rates) would yield fairer overall incentives. This, together with lower prices for solar installation, could enable a broader fraction of the customer base to justify adding solar.

With respect to policy 2, some comments on this thread have expressed alarm at the possibility of being charged to send power back to the grid. I don't believe this is going to happen, but I could live with a slightly lower price for net generated power vs net consumed power during a particular TOU. The grid is performing a really wonderful service to solar customers. It is storing power for us not only between day and night cycles (with the night usage augmented by our Leafs charging), but across seasons. High credits we earn in the Summer can be redeemed in the Winter. This much storage is equivalent to 100s of thousands of $$ of Leaf battery technology.

The new principle that the utilities, led by SDG&E, are discussing in various forms is that there should be some price to be paid for both distribution and generation facilities that are still heavily used by solar-generating customers, but now used with more fluctuation. The solar power you consume immediately does not go through the meter, but I would think that most high-tier customers are moving more kWh to/from the grid with solar than without. Yes, the power we send back to the grid only goes a few yards before being consumed by one of our neighbors, but the neighbors can't rely on us to always be supplying that power, so there would seem to be negligible saving in utility infrastructure. None of my neighbors (or anyone else in my area that I know) is on TOU, so even if they are on tier 3 or 4, the rate they are paying SCE for my power is much less than my credit. It would seem the power we supply locally is more valuable in the abstract than in reality.

SDG&E seems to be also proposing a demand charge, based upon the maximum power drawn from the grid during the month. One review found a suggested demand price of $.95/kW (not kWh). Perhaps they are asking for a higher price. My TOU meter reports my maximum for each billing month. Right now it is showing 4.2 kW, so this would represent a debit of about $4 against my ongoing surplus credit. Since I am currently not billed for any demand charge, there were a few times this summer when I charged my Leaf at the same time as I ran the A/C, late in the day with little solar, pushing my maximum usage above 7 kW. I see nothing wrong with having an incentive to avoid such peaks, but perhaps this demand charge should be adjusted by TOU. Late night demand should not cost the same as peak-period demand.

During the Chief Vehicle Engineer meeting at Google, Nissan floated the idea of having the Leaf adjust its late-night charge rate to reflect the short-term availability of wind power. This would improve night-time grid efficiency at little infrastructure cost, and the savings could be shared between the Leaf owner and the utility.

PG&E has a clever, complicated TOU tariff that seems to work in their favor without violating principle 2. They have added a third TOU period, "near-peak" and their peak period runs from 1-7PM M-F. This splits one's solar production between peak and off-peak, and adds 6-7PM consumption to the peak period. They also have 5 tiers for TOU. All this makes it much harder to drive into high-priced negative territory for the big TOU solar payoff like I get with SCE.

As the grid evolves with more fluctuation from renewable sources there is a risk of "stranded investment" for both the utility and the connected solar customer. I suggest that enlightened policy can find a reasonable balance that minimizes this for all parties.
LEAF Ocean Blue SL, "100 % Electric" decals, Delivered June 3, 2011
Sold June 2014 27K miles, 18% capacity loss, 1 bar, 5.0 mi/kWh.
Solar 4.6 KW DC with both string and micro-inverters.

User avatar
EricH
Posts: 324
Joined: Mon Jan 03, 2011 8:54 pm
Delivery Date: 26 Mar 2011
Leaf Number: 0664
Location: Whittier, CA

Re: SDG&E asks for higher rates on customers who go solar

Thu Dec 29, 2011 9:51 pm

tbleakne wrote:SDG&E seems to be also proposing a demand charge, based upon the maximum power drawn from the grid during the month. One review found a suggested demand price of $.95/kW (not kWh). Perhaps they are asking for a higher price. My TOU meter reports my maximum for each billing month. Right now it is showing 4.2 kW, so this would represent a debit of about $4 against my ongoing surplus credit. Since I am currently not billed for any demand charge, there were a few times this summer when I charged my Leaf at the same time as I ran the A/C, late in the day with little solar, pushing my maximum usage above 7 kW. I see nothing wrong with having an incentive to avoid such peaks, but perhaps this demand charge should be adjusted by TOU. Late night demand should not cost the same as peak-period demand.

PG&E has a clever, complicated TOU tariff that seems to work in their favor without violating principle 2. They have added a third TOU period, "near-peak" and their peak period runs from 1-7PM M-F. This splits one's solar production between peak and off-peak, and adds 6-7PM consumption to the peak period. They also have 5 tiers for TOU.
Great comment. In general, California utility TOU periods can vary since the goal is to reduce on-peak consumption -- SCE's peak period may be earlier in the day (A/C-driven) than PG&E's (home heat/light driven?), so the TOU periods would vary according to each area's load patterns.
Also, California rate design allocates by rate group, then by rate component; thus, a residential demand charge (as you cite SD&GE is considering) wouldn't collect more money from residential customers, it would reduce kWh charges by an offsetting amount (although not by a large amount, given the $0.95/kW price you mentioned). Overall residential revenue wouldn't change, but customer-by-customer, YMMV.
Finally, I don't think anyone likes 5-tiered TOU rates, so those are likely to be simplified/streamlined over the coming few years. At least I hope so...
Blue SL with QC
A/V Charger
Delivery: 3/26/11

User avatar
garygid
Gold Member
Posts: 12469
Joined: Wed Apr 21, 2010 8:10 am
Delivery Date: 29 Mar 2011
Leaf Number: 000855
Location: Laguna Hills, Orange Co, CA

Re: SDG&E asks for higher rates on customers who go solar

Thu Dec 29, 2011 10:23 pm

SDG&E does not give big credits ("payout") like SCE apparently does,
at least not to Net-Metering customers.
See SOC/GID-Meter and CAN-Do Info
2010 Prius
2011 LEAF, 2014 Tesla S85
2018 & 2019 Tesla Model 3
PU: SDG&E
Solar PV: 33 x 225W -> 7 kW max AC
Craigslist: Xm5000Li Electric Motorcycle

User avatar
DaveEV
Posts: 6249
Joined: Fri Apr 23, 2010 3:51 pm
Location: San Diego

Re: SDG&E asks for higher rates on customers who go solar

Sun Jan 01, 2012 11:50 pm

tbleakne wrote:SDG&E seems to be also proposing a demand charge, based upon the maximum power drawn from the grid during the month. One review found a suggested demand price of $.95/kW (not kWh). Perhaps they are asking for a higher price.
Not sure where you found that number, but it appears that SDG&E has identified rates quite a bit higher than that. I'm not quite sure exactly what each means, but in this document[1] they suggest a $5.42 / kW to provide "average distribution demand costs to provide service to residential customers" which somehow results in a $27.94 per average kW of demand per month "Network Use Charge" when applied on an average billing cycle basis[2].
tbleakne wrote:Right now it is showing 4.2 kW, so this would represent a debit of about $4 against my ongoing surplus credit. Since I am currently not billed for any demand charge, there were a few times this summer when I charged my Leaf at the same time as I ran the A/C, late in the day with little solar, pushing my maximum usage above 7 kW.
Your $1/kW demand price is drastically low. The way the proposed Network Use Charge "would be calculated by adding the customer’s actual use of
the grid each hour and dividing by the total number of hours in a month"[3]. In other words, it's basically calculated by using your average grid utilization over a month.

So as a non-solar user, on a 30 day billing period, if you use 500 kWh (average 0.7kW the whole month - close to average usa for a household in California) you'll have a Network Use Charge of about ~$20. Add energy charges for your typical tiered rates and you might be charged $0.03/kWh for 317 kWh (tier 1), $0.06/kWh for 95 kWh (tier 2) and $0.21/kWh for 88 kWh (tier 3) for a total of ~$34 in energy charges and a total bill of $57 (there's a $3 administrative fee now in there)

Now you add solar and it generates 500 kWh over the whole month.

Best case scenario you use exactly what your PV system generates and eliminate your Network Use Charge. Good work! Now you only owe $3 instead of the $5.10 you owed under the old billing.

Worse case scenario you export all of your PV production and import all of your usage in which case you still incur the same Network Use Charge (~$20) but avoid the energy use, so now your bill is $23 instead of $5.

Real life will fall somewhere in between those numbers, but probably closer to the worst case unless you don't offset that much of your bill.

(Please someone check my calcs)

Small beans? Perhaps - but I know for me that it would have basically killed any economic incentive to install my system which was already marginal to begin with where I have a "break even" point of ~10 years.

And residential customers probably have it the best - it appears that schools and things like water-district installs will be hardest hit.
tbleakne wrote:I see nothing wrong with having an incentive to avoid such peaks, but perhaps this demand charge should be adjusted by TOU. Late night demand should not cost the same as peak-period demand.
SDG&E has suggested that super-off-peak time periods (midnight to 5am) not be subjected to a Network Use Charge in the reference documents.

[1] http://sdge.com/sites/default/files/reg ... 20Fang.pdf" onclick="window.open(this.href);return false;
[2] See page "CF - 7" of above document.
[3] http://sdge.com/sites/default/files/reg ... 0Brill.pdf" onclick="window.open(this.href);return false; Page "TRB - 16"

See these links for more information:
http://energycenter.org/index.php/compo ... customers-" onclick="window.open(this.href);return false;
http://sdge.com/node/1527" onclick="window.open(this.href);return false;
http://www.dra.ca.gov/DRA/energy/Custom ... e_2012.htm" onclick="window.open(this.href);return false;

User avatar
gbarry42
Posts: 888
Joined: Mon Jan 10, 2011 5:48 pm
Delivery Date: 06 May 2011
Location: Moonlight Beach

Re: SDG&E asks for higher rates on customers who go solar

Wed Jan 18, 2012 5:09 pm

"A state regulator on Wednesday rejected SDG&E's proposed network use charge, which would have added $20 to $30 to monthly bills of homeowners who use solar power."

http://www.nctimes.com/blogsnew/busines ... 20580.html" onclick="window.open(this.href);return false;
And there goes the first capacity bar! At 24,000 mi on 9/9/2013.
Second bar at 30,500 mi on 2/7/2015.

User avatar
Boomer23
Posts: 3553
Joined: Sun May 23, 2010 9:57 pm
Delivery Date: 30 Mar 2011
Location: Orange County, CA

Re: SDG&E asks for higher rates on customers who go solar

Wed Jan 18, 2012 5:53 pm

gbarry42 wrote:"A state regulator on Wednesday rejected SDG&E's proposed network use charge, which would have added $20 to $30 to monthly bills of homeowners who use solar power."

http://www.nctimes.com/blogsnew/busines ... 20580.html" onclick="window.open(this.href);return false;
Very cool!
2018 Tesla Model 3 Long Range RWD
2017 Chevy Bolt EV Premier Kinetic Blue
Blog: http://drivingelectric.blogspot.com" onclick="window.open(this.href);return false;

Return to “Utilities”