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AZ regulators adopt $5 a month Solar Fee

Post in 'The Green Room' started by MishMouse, Nov 15, 2013.

  1. TMonter

    TMonter Minister of Fire

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    Not true at all. The grid can only take so much intermittent power before it starts causing major issues. 15% is about the maximum. As you approach this limit the problems caused by DG becomes greater and requires much more management.

    This has nothing to do with killing green power but making green power producers pay the same costs any other independent power producer would be required to pay. Realistically solar power customers should be compensated at the utility's avoided cost rate, not at the retail rate.

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  2. jebatty

    jebatty Minister of Fire

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    This argument may have some merit when directed at genuine co-producers, those who put in solar for profit, but as related to homeowner solar electric, this is a smoke and mirrors argument by Big Power to kill green power to preserve their profit margins, to maintain demand on their systems, and in most areas of the US to preserve their public monopoly. Homeowners, with irrational exceptions aside, will not put in more solar than they use, and likely will install much less capacity than they use. Their use of solar electric has the same effect as moderate to ultra conservation, i.e., reduces demand for Big Power electricity. They will not put in more solar electric than they use because the cost is very high, much higher than buying from Big Power. As DBoon states
    The same is true for me. My annual use (2012-13) is about 12,000 kwh, and my estimated annual production is less than 8,000 kwh. And I have put in a substantial system, 6.5 kwh, in a ground mount array about 250 feet from my house. My system is considerably more expensive than a roof mount, and I did it not to co-produce, but to "do the right thing" and reduce greenhouse gas emissions and other pollutants caused by my use of electricity. The estimated out of pocket cost payback time is very substantial, even after tax credits, and it is likely I won't even live long enough to see that payback time expire.

    The limited periods I will produce more than I use will barely begin to offset use by other homeowners on the street on which I live. One or two of my neighbors using central air will consume more than my excess in the summer, and a couple of 1500 watt space heaters will consume more than my excess in winter, if I even have any excess in winter. There is no DG management problem.

    Also, except perhaps in limited areas of the US, most homeowners cannot take advantage of any solar electric due to poor solar siting of their homes, shade from trees and other structures, poor roof designs, and lack of other space to install solar. And of those who physically could take advantage of solar, most cannot afford solar or are not motivated to install solar. Reiterating DBoon's comment:
    ... makes it very good public policy to encourage homeowner solar electric for those willing and able to install it. Homeowner solar electric will always be a very small portion of total US electric production, although solar electric on a commercial scale, on a co-producer scale, will be increasing rapidly. Some of Big Power already are heavily invested in megawatt solar facilities, and this will continue.

    Big Power's position with regard to homeowner solar electric is only about preserving the profits they make from small scale users, the homeowner. Homeowners and small users in general pay a higher rate than larger consumers, and then they are penalized both as they try to conserve, i.e., do the right thing, and as they install solar to reduce their carbon footprint.
  3. Frozen Canuck

    Frozen Canuck Minister of Fire

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    Correct
  4. dmmoss51

    dmmoss51 Feeling the Heat

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    I think the "fuel Charge" sounds like a way for these companies to charge more within the constraints of regulations.

    I realize that you are pointing out his specific fuel charge and that is not lost I me. I just want to play devils advocate and remind folks that green energy is not free energy. The istallations are large capital expenditures and add long term maintenance needs to the picture. In many cases the green energy is more costly to produce at least with current infrasturcture than the traditional energy sources. The commodity produced (KWhs) has a market value. Without that market value they would not be in business, and without that value a home installation would not have any need either because there would be no net savings.

    Best thing to do is work the supply and demand equation but reducing your demand, which has been pointed out already in this thread.
  5. Frozen Canuck

    Frozen Canuck Minister of Fire

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    Jim. Basically we are stuck with it as it exists now.

    Game changer will be tech changes in solar allowing the average household load to come off grid for the majority of the year. A huge tech change would be some young smart kid somewhere figuring out how to harness static electricity, then all small loads could come off the grid permanently. Leaving major commercial/industrial loads which are better served by on site/local generation.

    Until then same old same old. Plenty of infrastructure to pay for & maintain/upgrade.

    BTW if anyone owns shares in an outfit with a 10% margin that is subject to the whims of the energy market & other volatile costs….sell those shares. A slim margin with volatile costs is usually a question of when not if you will have major $$$ troubles. Can't think of a single oil co that would/could have a cost of 30/barrel sell for 40/barrel & stay in business long term. Just too many bumps in the road for a narrow margin.

    As an example we have 2 pipeline breaks locally in the leases, each is projected to cost in excess of 500 mil to fix & both have to wait for the ground to freeze hard enough to support the equipment, likely sometime in late december. So until they are repaired likely end of march, each barrel of oil is trucked out of the lease & enters someone else's pipeline somewhere else all of which costs big $$$. So these lease operators will spend + 1 bil to fix pipelines & incur trucking & additional pipeline costs for every barrel they produce until those leaks are fixed. Likely all production for a period of 7 months as the breaks occurred in Sept & Oct. Quite likely that this doubles their cost of production until repairs are complete. If they had a 10% margin that just might finish them & these are by no means small co's.

    Try a little math experiment sometime….assume cash of 1 bil, annual production of 300 mil/barrels (very small firm), margin of 10%, then have an issue like above where cost of production doubles for a period of time. How many days after the problem is a company with 1 bil in cash reserves broke? BTW cost of production is well north of the $30/barrel above.

    Part of the reason we pay the prices we pay & our energy is still cheap in comparison. In many cases we are +/- 50% of europe's prices.
    woodgeek likes this.
  6. TMonter

    TMonter Minister of Fire

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    The problem is that regardless of whether they produce more than they use, they should not be compensated at more than the utility's avoided cost rate. After all if you are not producing power and the utility decided only to give you a fraction of the power you needed to run your home you'd scream bloody murder. The claim of maintaining profit margins is hollow especially considering the taxes levied on producers versus their actual margins.

    Don't forget that the current power company monopoly was pushed by government because the claim of the time was that it wasn't possible to have multiple producers compete. This has created a regulatory stranglehold on innovation and change in the power market.
  7. sesmith

    sesmith Member

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    Since the sun doesn't shine at night...you need storage for a solar PV system. Now it seems to me that $5/ month is a pretty reasonable price to pay for storage, when the alternative is to go off-grid and pay for and maintain a crapload of batteries.
  8. btuser

    btuser Minister of Fire

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    Electric power is still cheap.
  9. DBoon

    DBoon Minister of Fire

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    I don't mind paying $5/month for storage - that would be considerably cheaper than the $15/month I pay right now. However, I would like to benefit from the peak generation capability of my solar grid - if they are paying someone a 200% premium to produce power on a hot sunny day, then I want a cut of that as well. Surprise - I don't get that. It works both ways.
    woodgeek likes this.
  10. DBoon

    DBoon Minister of Fire

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    My solar power array is producing no more over the course of a year than I use, and the power company doesn't have to run 200 miles of transmission lines to get my power to my neighbors house. What is the avoided cost of that for the utility? Do I get a cut of that? We're not talking about a 100 MW array here - just 5 - 6 kW every few houses - this is not likely to overwhelm the grid anywhere. It will reduce utility profits, however. What would be the avoided costs of not having pollution? Or not having to build a new centralized power plant? Do I get a cut of that?

    Again, given that demand is lower at night, and higher during the day, I should be able to make more money by selling my excess and in-demand power to the utility during the daytime for a premium and buying it back at night when the prices are lower. When do I get the same deal that utilities hand out to other power producers?

    A well-regulated monopoly that serves the needs of its users is ok, an investor owned utility that is barely regulated and creates cost and fee structures that discourage conservation and cleaner sources of energy is not ok. The best rate structure would be no flat fees and a purely variable rate structure to drive demand lower. The lower demand went, the higher the per kWh cost of electricity, which would drive demand lower. The reason this isn't done is because it would discourage demand so much it would greatly reduce the profits of the investor owned utilities, given current profit incentives.
  11. sesmith

    sesmith Member

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    If you are net metering you're getting paid retail pricing. The premiums on hot summer days would be premiums on wholesale pricing, so I think you're coming out ahead. Do you really want to be paid wholesale for what you let flow into the grid, and pay retail for what you get back out? I'm sure the utility would just love that. There is a good argument here, for higher solar pricing, though:

    http://netdensity.net/2013/04/24/3051/
  12. jebatty

    jebatty Minister of Fire

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    Not often for me to read a study based on MN data. Net Density does explain why a utility paying at least the retail rate is not over-paying for distributed generation from home owners.

    Minnesota law currently is solid on net metering at the average retail rate, and the last legislative session expanded incentives for solar power. Unfortunately, those incentives did not apply to Big Power Co-op electric utilities, of which I am a member because I have no other electric source choice available to me, and our co-op utility takes a position which discourages solar power and retail net metering, although it has no choice on this and was helpful and prompt in approving my system.

    I don't have facts on this, but I believe that one reason the co-op is opposed to solar electric is because it has long term contracts for western coal which lock it into coal for a long time to come. Probably a good business decision based on a dinosaur business model but not a good business decision for a forward looking company.
  13. jebatty

    jebatty Minister of Fire

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    Another reason in MN to for homeowners to move to solar: 40% increase in average retail electric rates in the last 10 years. Solar Energy Is Cheap
  14. Ehouse

    Ehouse Minister of Fire

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    The next thing will be universal standing charges on a "pay whether you use it or not" basis to reel in off grid users. The Aussies do this and I've seen a reference to language supporting it being slipped into some state's energy policies, although I can't seem to find it now. Anyone know about this?
  15. jebatty

    jebatty Minister of Fire

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    This is and will be a political, public policy and cultural battle, and Big Power has Big Money to spend Big Time to gets its way. The APS utility spent over $4 million to get the $5/mo fee, knowing now it had its foot in the door to a future of increases. Environmentally safe electric power supporters and industry will have to outmatch Big Power and stay a step ahead all the time.
    Ehouse likes this.
  16. btuser

    btuser Minister of Fire

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    The whole business model of residential utilities is going topsy turvy. I'm surprised telco is even around anymore. Verizon (after spending billions getting ready for it) has abandoned new roll outs for FIOS. Can't say I blame them when 4gte promises 100mb speeds. Comcast is struggling with Netflix and ipvideo. Its a mess.
  17. TMonter

    TMonter Minister of Fire

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    The idea that a regulated monopoly is okay is false. Again it reduces innovation, drives up prices, and discourages re-investment and this can be observed in almost any market. Look at the condition of the infrastructure around this country for a prime example.

    Regardless of whether you are producing more than you use, the utility is still required to remain connected to you and back-meter all the electricity you do produce. They also have to account for the potential demand of your house should your solar system fail. The power company has to keep a full reserve for every single house regardless of the 5-6kW of power you may or may not produce. Are you willing to limit your usage to the difference should your solar system be offline or the sun isn't shining? I doubt it. As for not having to run transmission lines to move the power, yes they do, and they have to maintain those lines.

    Demand is not necessarily lower at "night" than during the day, especially depending on the time of year. There certainly is peak hour times and off peak hours but where those fall shifts depending on the time of year.
  18. Seasoned Oak

    Seasoned Oak Minister of Fire

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    Charging fees on SOLAR is just a bad idea. Until it dominates the market, fees will just hurt a struggling FF alternative.
  19. TMonter

    TMonter Minister of Fire

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    But it's not a bad idea if it's a cost to the utility which it is. Solar should stand on its own and if it can't make a value proposition, then why should it be adopted?
  20. Seasoned Oak

    Seasoned Oak Minister of Fire

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    If utilities had to pay a carbon tax (which they may at some point) it would be a whole new ball game. They would then welcome off setting credits like solar
  21. TMonter

    TMonter Minister of Fire

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    Which would drastically drive up the cost of power hurting the poorest people the most and again distorting the market to support a technology that is not economically (Or technically on a large scale) viable otherwise. Take a look at corn ethanol and what it has done to the food market, and you want to do the same thing with power production?
    Last edited: Nov 19, 2013
  22. MishMouse

    MishMouse Minister of Fire

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    The power company that serves me charges a line usage fee along with a line maintenance fee. (Not dependent on power usage)
    If the power company charges all its customers these base fees I see no reason to charge a customer if they obtain some of their power from an alternative source.

    The same thing goes for propane companies that charge people a few hundred dollar fee for not using a certain amount of propane. Especially since you have to pay tank rental, contract fees, and delivery charges.
    Seasoned Oak likes this.
  23. Seasoned Oak

    Seasoned Oak Minister of Fire

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    Getting rid of oil subsidies and corp welfare and making companies pay for environmental damage would drive up the cost of gasoline as well. As MM said were already paying for the delivery. Our power provider claims they dont make a cent on generation. So they dont care who you chose for a generation provider.
  24. TMonter

    TMonter Minister of Fire

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    Not all power bills have that charge integrated and there is additional metering and reporting that has to be done for net power producers. The end user should pay those charges just like any other IPP.
  25. TMonter

    TMonter Minister of Fire

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    There are really very few oil subsidies these days. Tax breaks maybe, but not subsidies.

    I agree that companies should be required to foot the entire cost of their operation, but this is the problem with the current regulation scheme and favoring solar power certainly isn't going to fix that.

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