Tag Archives: Electricity Rates

Los Angeles has lined up record-cheap solar power. But there’s a problem

By Sammy Roth, Los Angeles Times

Los Angeles has been sitting on a contract for record-cheap solar power for more than a month — and city officials declined to approve it Tuesday because of concerns raised by the city-run utility’s labor union, which is still fuming over Mayor Eric Garcetti’s decision to shut down three gas-fired power plants.

Under the 25-year contract with developer 8minute Solar Energy, the Los Angeles Department of Water and Power would pay less than 2 cents per kilowatt-hour — a number city officials and independent experts say would be the lowest price ever paid for solar power in the United States, and cheaper than the cost of electricity from a typical natural gas-fired power plant.

In addition to 400 megawatts of solar power, the Eland project would include at least 200 megawatts of lithium-ion batteries, capable of storing solar power during the day and injecting it into the grid for four hours each night. The combined price to L.A. ratepayers of the solar and storage would be 3.3 cents per kilowatt-hour — also a record low for this type of contract.

But LADWP’s Board of Commissioners voted not to send the contract to the City Council for approval, after utility staff said concerns had been raised by the International Brotherhood of Electrical Workers Local 18, which represents utility employees. In recent months, IBEW Local 18 has run television and radio ads attacking Garcetti’s Green New Deal initiative, which includes the retirement of three coastal gas plants that employ more than 400 LADWP workers.

…The Eland project, which is planned for the Mojave Desert north of Los Angeles, wouldn’t replace those gas plants. But it could help L.A. reduce its reliance on gas, which has become California’s largest electricity source as utilities look for evening power sources to fill in for solar after the sun goes down.

Read full article in the Los Angeles Times

As PG&E faces uncertainty, Sonoma Clean Power sees a bright future in green energy

By Bill Swindell, The Press Democrat

The troubling saga of PG&E has been well chronicled along its path that led to a bankruptcy filing in January. Massive liabilities from wildfires caused by transmission lines. A push to increase already high energy prices to ratepayers. Public outrage over bonuses paid by executives during a period of turmoil.

Yet during the same time, the fortunes of Santa Rosa-based Sonoma Clean Power could not be more different while much less heralded. Five years since first providing electric service to customers, the nonprofit public agency now has 87% of its eligible customers in both Sonoma and Mendocino counties, totaling 224,000 accounts. It claims to have saved approximately $80 million for its customers in reduced rates compared to the investor-owned PG&E, which still provides natural gas locally.

The local company — which has only about 25 employees — also has made tremendous strides in curbing carbon emissions. It sources green energy with a standard service that now provides 91% carbon-free power and has almost 2,000 customers enrolled in its premium EverGreen service, which offers 100% renewable energy sourced locally from solar panels and geothermal plants at The Geysers. Two years ago, it got into the production side by breaking ground on two solar-panel projects in rural areas located in Petaluma, and it is on a course to have a total of six such projects in the region. It also purchases power from a wind farm in the Altamont Pass.

Indeed, Sonoma Clean Power officials said they believe their agency is nicely positioned to play a leading role in curbing carbon emissions at the local level while also serving as a role model for other Golden State communities to accomplish that same goal.

Read full article in The Press Democrat

Opinion: How Lackluster Grid Maintenance Jeopardizes California’s Green Energy Future

By Ariel Cohen (Contributor), Forbes

In Part I of this story, I examined the factors that led to California’s now infamous ‘Camp Fire’ and the bankruptcy of the state’s largest utility, Pacific Gas and Electric Co. (PG&E). It turns out that while climate change, forest mismanagement, and overzealous lawmakers share some of the blame, PG&E is at the center of this multibillion-dollar catastrophe.

But in California, it is ratepayers, shareholders, and green energy that will pay the greatest price. PG&E has been a key partner in California’s green energy agenda, investing aggressively in solar, wind, and other renewable energy projects over the past decade. Last year renewables accounted for 33% of PG&E’s power mix — an impressive amount by industry standards. However, PG&E’s bankruptcy in the wake of the Camp Fire means that a lack of trust (and credit) in the utility could imperil the state’s green energy sector, and with it dreams of 100% carbon-free power by 2045.

Green power is now an uncertain space to do business in California, and we are already seeing the consequences: a major PG&E solar farm – Topaz – had their credit rating downgraded even before PG&E officially filed for bankruptcy, imperiling the clean electricity it provides to roughly 180,000 homes in California. The credit agency Fitch Ratings recently downgraded NextEra Energy’s 250-megawatt Genesis Solar project in the Sonoran Desert, citing its link to PG&E. Others are on the chopping block.

More critically, bankruptcy court might also jeopardize PG&E’s many long-term power purchase agreements (PPAs) with renewable energy providers. From a financial perspective, it makes sense for PG&E to tear up these contracts and start anew. The falling cost of wind and solar means that energy prices negotiated in 2012 and 2013 are three to four times higher per megawatt hour (MWh) than they are today. According to Bloomberg New Energy Finance (NEF), the estimated remaining obligation on these PPAs are more than $2 billion, though they would be worth only around $800 million at current market rates. Restructuring these contracts in court would increase cashflow, affording PG&E a much-needed liquidity boost to help deal with mounting liabilities.

Read full article at Forbes

 

Opinion: The Phony Numbers Behind California’s Solar Mandate

By Steve Sexton, The Wall Street Journal

California’s energy regulators effectively cooked the books to justify their recent command that all homes built in the Golden State after 2020 be equipped with solar panels. Far from a boon to homeowners, the costs to builders and home buyers will likely far exceed the benefits to the state.

The California Energy Commission, which approved the rule as part of new energy-efficiency regulations, didn’t conduct an objective, independent investigation of the policy’s effects. Instead it relied on economic analysis from the consultancy that proposed the policy, Energy and Environmental Economics Inc. Its study concluded that home buyers get a 100% investment return—paying $40 more in monthly mortgage costs but saving $80 a month on electricity. If it’s such a good deal, why aren’t home buyers clamoring for more panels already? Most new homes aren’t built with solar panels today, even though the state is saturated by solar marketing.

The Energy Commission is too optimistic about the cost of panels. It assumes the cost was $2.93 a watt in 2016 and will decline 17% by 2020. Yet comprehensive analysis of panel costs by the Lawrence Berkeley National Laboratory estimated the average cost of installed panels to be $4.50 a watt for the 2- to 4-kilowatt systems the policy mandates. That is $4,000 more than regulators claim for a 2.6-kilowatt model system in the central part of the state, where 20% of new homes are expected to be built. Berkeley Lab further estimates that costs fell a mere 1% between 2015 and 2016, far short of the 4% average annual decline the regulators predict.

Now consider the alleged savings on energy bills. The commission’s analysis assumes California will maintain its net energy-metering policy, which effectively subsidizes electricity produced by a rooftop solar panel…

Read full op-ed in the Wall Street Journal

 

Boosting battery storage can lower utility bills — study

By Daniel Cusick, Environment & Energy Publishing

Adding energy storage to an already robust solar market in California’s multifamily housing sector could lead to significant utility bill savings for building owners and tenants, new findings from the Clean Energy Group and partner organizations show.

In a new 50-page analysis released last week, CEG, along with the California Housing Partnership Corp. and Center for Sustainable Energy, found that lower-income apartments provide a ripe opportunity for developers to improve the economics of solar by adding battery storage to such apartment buildings. “It essentially creates a new pool of savings, so if you were only doing efficiency and only doing solar, you’d get some savings. But if you add storage, you get significantly more,” said Lewis Milford, CEG’s president and a co-author of the report, “Closing the California Clean Energy Divide.”

The authors say the findings are especially relevant in light of California’s recent passage into law of the Multifamily Affordable Housing Solar Roofs Program, a $1 billion investment program to deploy solar technologies in affordable multifamily rental housing that is expected to extend the benefits of solar power to hundreds of thousands of lower-income Californians.

But solar access by itself isn’t enough, the report says. In fact, shifting policies around rooftop solar in some states, including California, could place owners and tenants of low-income housing at greater risk because the benefits of solar are highly dependent on strong net-metering programs. A number of states have reformed net metering in ways that sharply curtail the benefits of solar, resulting in higher, not lower, electricity bills.

Battery storage effectively reduces that risk, the authors say, by eliminating most of the demand-related charges that utilities pass along to owners of distributed energy systems like rooftop solar.

“Because batteries empower owners of solar PV systems to take control of the energy they produce and when they consume it, storage can deliver deeper cost reductions that can be shared among affordable housing owners, developers, and tenants,” the report states. And unlike stand-alone solar projects, which do little to offset demand-related charges, a properly sized solar system with storage can eliminate nearly all electricity expenses, resulting in an annual electric utility bill of less than a few hundred dollars in some cases.

Read full article from E&E

Related Article: Energy Storage Could Break Low Income Rooftop Solar Bottleneck (CleanTechnica)

Utilities look to reverse net metering decision

By Rob Nikolewski, The San Diego Union-Tribune

San Diego Gas and Electric and two other major California utilities Monday filed applications urging the California Public Utilities Commission to hold a rehearing to vacate or make “modifications” to its decision keeping retail rate net metering in place until 2019.

“We feel it’s in the best interest of our customers to re-look at this issue and consumer advocates actually agree, as they have taken similar action,” said SDG&E representative Amber Albrecht.

In January, in a tense 3-2 vote, the CPUC sided with solar backers over utilities that insist they are not trying to blunt the growth of solar power in California. Instead, utilities say the net metering system that pays rooftop solar customers for the excess electricity their systems send back to the grid is unfair to consumers who don’t have solar energy systems. Solar companies and their customers say the power their systems generate helps lower strain on the electrical grid and reduces the need to buy power during times of high demand.

The commission — in a ruling that ran more than 150 pages — agreed to keep tying credits to retail rates, rather than near wholesale rates that other states use. The CPUC said it will continue to re-evaluate the rules but the decision was widely viewed as a big win for solar, as other states such as Nevada have rolled back some solar incentives.

SDG&E filed its application for rehearing jointly with Southern California Edison, calling on the CPUC to make changes to its decision. Pacific Gas and Electric also filed paperwork Monday, the deadline for applications for a rehearing, looking to get the commission to vacate its ruling. The CPUC has 120 days to respond to the requests for a rehearing.

Read full article in the San Diego Union-Tribune

PG&E wants Marin Clean Energy customers to pay more for exit ticket

By Richard Halstead, Marin Independent Journal

The California Public Utilities Commission will rule this month on requests from Pacific Gas and Electric Co. that some say if granted could hinder the effort to boost renewable energy use in the state. PG&E is seeking permission to nearly double the monthly fee it levies on customers of Marin Clean Energy and other community choice electricity suppliers. The investor-owned utility is also proposing a change in net metering policy that would substantially reduce the financial incentive for installing residential solar power systems.

When a PG&E customer opts to buy electricity from another energy supplier, such as Marin Clean Energy or Sonoma Clean Power, the company is permitted to charge that customer an exit fee to compensate it for the power contracts it previously entered into to supply that customer’s electricity. The average Marin Clean Energy customer pays an exit fee of $6.70 per month. PG&E is requesting permission to nearly double the exit fee to about $13 for an average Marin Clean Energy customer. The increase would mean that, for the first time in several years, Marin Clean Energy customers would be paying more for their electricity than PG&E customers.

When PG&E loses a customer to another energy supplier, it sells the excess electricity that it purchased for that customer. The company might earn or lose money, depending on market conditions. So far, PG&E has stockpiled more than $1 billion from transactions in which it earned money. In conjunction with its request for a hike in the exit fee, PG&E initially asked the CPUC’s permission to absorb this money. Marin Clean Energy objected. The CPUC rejected Marin Clean Energy’s request that the money be used to offset the need for additional exit fee revenue and directed PG&E to submit an alternative proposal outlining its plans for the $1 billion next year.

Read full article in the Marin Independent Journal

Not just California: Solar Battles Raging Across U.S.

By Sammy Roth, The Desert Sun

California has more rooftop solar installations than any other state, and it isn’t particularly close. But the Golden State is far from the only place where the solar industry and utility companies are clashing over how much money solar customers should be allowed to save.

Officials in 24 states have recently changed or are debating changes to rate structures for solar customers, according to a report released by the N.C. Clean Energy Technology Center earlier this month. Many of those battles mirror the one taking place in California, where utilities like Southern California Edison say homes and businesses with solar panels need to pay more.

There’s a reason all these battles are happening now: As rooftop solar prices fall, the industry is growing more quickly than ever. That growth has reduced planet-warming carbon emissions, but it’s also thrown the utility industry into a panic about its long-term ability to make money, clean energy advocates say.

Read full article in the Desert Sun

How Solar, Batteries and Time-of-Use Pricing Can Add Up to Value

By Jeff St. John, Greentech Media

There’s definitely a value to storing solar energy in batteries, and then discharging that energy to meet grid and customer needs. Measuring that value — and finding a way to share it between battery-equipped solar customers and their utilities — is a trickier matter.

Out in Sacramento, Calif., a long-running solar-storage pilot project has been testing out this interplay. The city’s utility, Sacramento Municipal Utility District (SMUD), has been working with startup Sunverge to align the operation of 34 battery-backed, PV-equipped homes with its needs to shave peak demand in late summer afternoons, when air-conditioning loads put stress on the grid.

SMUD is using critical peak pricing as its lever. Since 2012, the utility has been running an experiment with residential rate plans that charge extra-high prices during “critical peak period” days, in exchange for extra-low prices at other times. Some customers were offered the option of signing up for the plan — and others were automatically enrolled.

Read full article from Greentech Media

Should homeowners with solar panels pay to help maintain the electrical grid?

By Aaron Orlowski, The Orange County Register

Homeowners face a simple calculus when deciding whether to install solar panels on their roof: Will the panels pay for themselves with savings on their electric bill?

But buried in that bill are complex variables defined by what’s known as the state’s net metering rules – the very essence of which are under debate at the California Public Utilities Commission in San Francisco. Those rules must be changed or renewed by the end of the year. As the deadline nears, the clash over whether solar panel users should be forced to pay to support a grid from which they seek to disconnect is getting fiercer. Utilities want to slap fees on solar users, while the solar industry wants them left largely untouched.

Since 1996, California’s net metering rules have allowed homeowners with solar panels to effectively spin their electric meters backwards when their panels are generating more power than their homes are using. That helped pave the way for the state to lead the nation by installing 11,500 megawatts of solar capacity and building an industry that employs 54,700 people. Whether the new rules will bolster that industry even more or prick its balloon will likely be decided in the next two months.

Read full article in the O.C. Register