Tag Archives: Investor-owned Utilities

Timing is Everything: How California is Getting Electricity Pricing Right and Bringing Clean Power to the People

By Jamie Fine (Senior Economist, Environmental Defense Fund), EDF’s Energy Exchange blog

Anybody managing a household budget knows it pays to plan ahead. With advanced thinking we can buy favorite items with coupons, when they’re on sale, in bulk, or at the cheapest store in the area. Using the same smart shopper skills, new changes to the way utilities charge for electricity are going to give Californians another way to save money on energy bills.

In the current system, most California households’ electricity prices don’t change throughout the day. There is no option for lower prices when system demands are lower and electricity is cheap in wholesale markets. But that’s about to change, thanks to a recent 5-0 decision by the California Public Utilities Commission (CPUC).  Starting January 1, 2019, after a period of study, public outreach, and education, California’s large investor-owned utilities (Pacific Gas and Electric, San Diego Gas and Electric, Southern California Edison) will switch households to time-of-use (TOU) electricity pricing. This simplified rate structure rewards customers who shift some of their electricity use to times of the day when clean energy is plentiful. This shift to a TOU pricing regime – one of the first in the nation – is a huge win for Californians and the environment.

Read full blog post from EDF’s Energy Exchange

CPUC Shines Spotlight on Solar Program Success

The California Public Utilities Commission (CPUC) has released its annual report to the California State Legislature on the progress of the California Solar Initiative (CSI) program. The agency announced that consumer solar installations in California continued to increase in 2014, largely without rebate incentives, demonstrating that the state’s CSI program has substantially reached its goal of stimulating widespread adoption of solar energy and creating a self-sustaining market.

Highlights of the June 2015 California Solar Initiative Annual Program Assessment include:

  • Through the end of 2014, an estimated 2,529 MW of solar capacity has been installed on the customer side of the meter (including projects that didn’t receive CSI program incentives) at 302,266 customer sites in California.
  • In 2014, California installed a record 670 MW of customer-sited solar energy capacity, achieving a 31 percent annual growth from the capacity installed in 2013. The majority of these solar energy systems did not receive any CSI program rebates, as Pacific Gas and Electric Company, Southern California Edison, and San Diego Gas & Electric are no longer offering residential rebates because they have either installed or reserved enough solar capacity to meet their residential CSI program goals.
  • Between the last quarter of 2008 and the last quarter of 2014, the average cost of installed residential systems has decreased 53 percent from $10.87 per watt to $5.14 per watt. In the same time period, non-residential system costs have decreased 62 percent from an average of $10.30 per watt to $3.93 per watt.
  • All but 254 MW, or 9 percent, of customer-sited solar energy systems interconnected into the grid in the large investor-owned utility territories are enrolled in Net Energy Metering.
  • To date, the CSI General Market program has installed 1,647 megawatts (MW), or 94 percent of its 1,750 MW goal, and will surpass its goal with another 258 MW waiting in pending projects.
  • The CSI Single-Family Affordable Solar Homes (SASH) program has completed a total of 4,499 projects, representing 13.6 MW of installed capacity. There are an additional 316 SASH projects in progress, with a total capacity of 1 MW.
  • The CSI Multifamily Affordable Solar Housing (MASH) program has completed 349 projects, representing 23.2 MW of installed capacity.  There are an additional 41 MASH projects in progress, with a total capacity of 6.3 MW.
  • In just over five years of operation, the CSI Thermal program has approved 2,585 applications for solar water heating systems, totaling $33.7 million in incentives of the available $205 million CSI Thermal incentive budget.
  • The CSI Research, Development, Demonstration and Deployment program has conducted five project solicitations since its inception, resulting in grant funding for 36 projects, totaling $44.4 million. Funded projects have focused on the following areas: integration of solar photovoltaics into the electricity grid; energy generation technologies and business development; and grid integration and production technologies.

Read full press release from the California Public Utilities Commission

 

 

California electricity prices to rise for those who use the least

By David R. Baker, The San Francisco Chronicle

Californians’ electricity rates are about to undergo their most sweeping changes since the state’s energy crisis 15 years ago, cutting costs for people who use large amounts of power while raising bills for more efficient homeowners. The question is, how many people will pay more?

The California Public Utilities Commission is scheduled to vote Friday on two competing proposals to radically revamp the way electricity rates work at the state’s big, investor-owned utilities: Pacific Gas and Electric Co., Southern California Edison and San Diego Gas & Electric Co. Both proposals would narrow the gap between prices paid by people who use large amounts of electricity and those who use less. But one proposal, backed by the utilities, would go further than the other, raising utility bills at least $10 per month for an estimated 80 percent of residential customers next year as a result. It would also eventually allow the utilities to impose a fixed monthly charge on all customers, an idea the companies like but consumer advocates hate. The second proposal, from Commissioner Mike Florio, would boost monthly bills at least $10 for 35 percent of residential customers, and explicitly rejects fixed monthly charges.

The issue has been the subject of a fierce lobbying fight ever since 2013, when California legislators authorized the commission to reform electricity rates from top to bottom. Utilities, consumer groups, business associations and solar companies all entered the fray, each trying to tweak the details to their advantage. While arguing over how to fix it, most agreed the current system wouldn’t last.

No element of rate reform provoked a bigger fight than fixed charges. Utilities consider them a way to make sure everyone pays the cost of maintaining the electrical grid, at a time when an increasing number of homeowners are installing solar panels to generate their own electricity.

Read full article in the San Francisco Chronicle

A BRIGHT QUARTER FOR SOLAR CALIFORNIA

In June, GTM Research and the Solar Energy Industries Association (SEIA) released their US Solar Market Insight report for the first quarter of 2015. Their report and others from a variety of state and federal sources indicate the solar industry in California continues its impressive growth. The state remains above the national average in the rate of growth in residential and commercial solar capacity, and continues to contribute well over half the national utility capacity added. The US Energy Information Agency reports that last year California became the first state to obtain more than 5% of its electricity production from utility-scale solar power. While the glass appears more than half full, we must not become complacent as there are a number of long-term issues — warning clouds on the horizon — that we must face and resolve.

First quarter residential additions reportedly totaled 231 MW; that is enough to power an additional 60,000 homes with solar energy. This added capacity is 78% larger than the capacity added during the same time last year — a year-over-year growth not even dreamed of in most industries. And for the naysayers who claim this is all subsidized, the California Solar Initiative program has pretty much run its course so that over 80% of these installations occurred without need of state support.

Commercial or non-residential on-site (commonly rooftop) systems have experienced marked growth also, though at more modest volumes. The GTM Research/SEIA study identifies 88 MW added in the first quarter—small compared to residential activity, but still a healthy 42% increase over the 62 MW added in the first quarter of 2014. As with residential systems, these too are increasingly being installed on their economic merits without state subsidies.

Taken together, these 3-month additions bring the total residential and commercial capacity to over 3000 MW of Photovoltaics. When operating in full sun, these systems generate more kilowatt hours of electricity than the 2200 MW capacity of the state’s remaining nuclear power plant at Diablo Canyon:  more than a nuclear power plant’s energy production on our rooftops with far less risk or controversy.

And speaking of power plants, utility scale PV is the third category of solar production. The 399 MW reportedly added was less than was added during the same quarter last year, but these numbers tend to be lumpy. Utility-scale additions often are tallied in chunks of various sizes, like the 550 MW Topaz and Desert Sun projects that were phased in during 2014. With 5400 MW installed at the end of 2014, and over 4500 MW planned for installation during the next few years, quarterly comparisons are less significant.

So in summary, past quarter growth has been strong and the market outlook is bright. Governor Brown announced in January (and the Assembly is considering) the goal to obtain half the state’s electricity from renewable sources by 2030. The 2016 goal of 25% has already been achieved; the 2020 goal of 33% appears achievable, maybe even sooner. These policies should serve to maintain efforts to expand renewable energy production.

Potential market expansion programs are imminent. The Green Tariff Shared Renewables program should expand the PV market to include renters and single family homeowners whose homes don’t lend themselves to on-site generation (due to structural, shading and other site-specific constraints). The state’s three large investor-owned utilities will be rolling out programs to provide renewably-sourced electricity to customers later this year. In parallel with this, cities and counties are assessing the benefits to residents of Community Choice Aggregation programs where-by they can source the electricity for resale to their residents. If priced and operated in a manner appealing to the untapped market, these programs could expand the potential number of households that source their electricity from solar sources by at least fourfold.

But there are competing perspectives to be balanced as the state moves forward, and not all focus on the same single issue of carbon reduction. The question of rate-payer equity and possible subsidization of PV owners by other utility customers needs to be addressed. This struggle to identify an equitable means of Net Energy Metering is not unique to California, but it is critical for its potential to up-end the economic attractiveness of residential and commercial scale PV systems. Its importance to the continued expansion of solar energy use in California is emphasized by Bernadette Del Chiaro’s guest commentary elsewhere on this website.

And at the federal level, the reduction (commercial) or expiration (residential) of the 30% investment tax credit has the potential to depress demand not just in California but nationwide. Falling prices of PV systems may soften this effect, but its loss could still be damaging to both the industry and our climate.

Industry reports this past quarter were widely favorable, and the solar industry in California appears to be under the influence of the Irish blessing:

May the road rise up to meet you

May the wind always be at your back,

May the sun shine warm upon your face,

and rains fall soft upon your fields.

Though we are falling short of the soft rains! We need to deal quickly and effectively with the warning clouds on the horizon — lest the resulting rain be not as soft as either the traveler or we Californian’s desire.

SCE Continues Encouraging Solar Development

Southern California Edison (SCE) this week issued a press release that describes the utility’s ongoing efforts to encourage and support the development and interconnection of solar projects within its service territory.

According to the release, SCE has about 125,000 rooftop solar systems installed in its territory, totaling more than 1,000 megawatts. Those systems include residential and non-residential installations, as well as some utility-owned projects. Nearly 600 megawatts are from residential projects.

Adding to those totals, SCE also recently announced that the California Public Utilities Commission has approved 22 projects totaling 42.6 megawatts of direct current power from the utility’s fourth solicitation to obtain electricity from independent power producers as part of its Solar Photovoltaic Program (SPVP).

Read the full press release from Southern California Edison