Tag Archives: Rate Restructuring

SDG&E looks to raise minimum bill 400%, citing solar-driven cost shift

By Robert Walton, Utility Dive

Dive Brief:

  • San Diego Gas & Electric earlier this summer said it wants to raise its minimum bills by almost 400%, along with a $10 fixed charge, a move the utility says is necessary to combat the $420 million annual cost shift between residential customers with and without solar panels.
  • By next spring, the utility wants to raise the minimum bill to $1.26/day, or $38.19 per bill based on a 30-day billing cycle, effective March 1, 2020. Some vulnerable groups of customers would be eligible for a 50% discount on the minimum bill, according to SDG&E.
  • Several groups want to keep the minimum bill where it is, around $10, with no fixed charge. According to The Utility Reform Network (TURN), a minimum bill charge should be crafted so that customers with lower usage don’t wind up paying higher bills.

Dive Insight:

As California adds more renewable and ​distributed energy, SDG&E told the state’s Public Utilities Commission (CPUC) that its proposal for a “modest” fixed charge for all residential customers “is a critical first step toward an evolving rate design.”

“For the California utilities to continue to evolve to provide the services that the commission and customers want, then all customers who use and benefit from the grid will need to start to share in the cost of building, maintaining and operating it,” SDG&E said in its June testimony.

That means rates that allow for a fixed charge to recover fixed costs from all customers, according to the utility. “The antiquated rate design model of recovering fixed costs in volumetric rates is no longer a viable option that can promote fairness to all customers.”

SDG&E says its work to overhaul rates is consistent with 2013 legislation that required utilities to reduce the number of energy pricing tiers, incorporate time-of-use pricing, allow for a fixed charge of up to $10/month and “provide solutions to the increasing cost burden on customers who do not have private rooftop solar.”

Read full article from Utility Dive

Related Article: San Diego Gas and Electric looks to quadruple customers’ minimum monthly bill (PV Magazine) – Sept. 3, 2019

 

What this summer’s heat waves tell us about America’s electric grid

By Tim O’Connor, Environmental Defense Fund – Energy Exchange Blog

With another triple-digit heat wave scorching the Southwest this week, fears of widespread outages are back. California’s grid operator has urged homes and businesses to crank up thermostats and avoid running power-hungry appliances during evening peak hours – all in an effort to avoid disruptions like the ones we saw earlier this month.

The dangerous and expensive outages that left 80,000 Los Angeles residents in the dark then may have been limited to Southern California, but they should sound alarms nationwide. The world is changing, affecting how our grid works.

Utilities are taking steps to adapt and expand their power systems to maintain reliability and accommodate the growth of renewables, but they need to pick up the pace – and fast.

The most basic issue all electric grid operators grapple with is whether they’ll have enough capacity and supply to meet electricity demands of a growing population. Interestingly, California is expected to have enough electricity to go around this week – just like it did during the recent outage in LA.

What failed in early July was not the state’s power mix or supply, but the grid which – like an old car on the side of the road – had overheated and shut down in some places. Grid infrastructure investments and business models simply aren’t keeping up with technology advancements and changing consumer needs of today’s America.

Read full op-ed from EDF’s Energy Exchange blog

 

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

A Trifecta for Solar Energy and Distributed Generation

We all have good weeks and bad weeks. For proponents of Solar Energy (and all other inhabitants of our planet) this has been an historic week, with major achievements at the International, National and California-state levels. Setbacks will be inevitable, but the events of this week will have memorable and lasting impact.

The first and International achievement was the December 12 Agreement of 188 countries at the United Nations Conference on Climate Change in Paris to take measureable actions with the eventual goal of keeping global temperature rise to less than 2ᵒ Celsius (3.6ᵒ Fahrenheit) by 2050 compared with pre-industrial levels. As we have repeatedly been informed, this is the level estimated by numerous scientists to avoid the worst affects of atmospheric warming and ocean rise.

Though yet to be ratified (a process that starts in April 2016), the agreement commits those countries that do ratify the agreement to establish national emission targets and report on progress every 5 years. While the agreement calls for zero net anthropogenic greenhouse gas emissions to be reached during the second half of the 21st century, lowering the target would (according to some scientists) move this goal forward to the 2030 – 2050 timeframe. Either way, implementation of this agreement puts pressure on countries to support low- and non-carbon energy sources, solar very much included, accelerating their deployment and continued improvements.

The second and national achievement has not been enacted as this is written, but is the tentative agreement by Republican and Democratic House party leaders incorporated into the Appropriations bill that would extend tax credits for solar and wind projects from the current end-2016 expiration date through 2021. The agreement was the result of a compromise where-in Democratic Representatives would support eliminating the ban on US oil exports in exchange for Republican support for the Tax Credit extension.

While the vote can still go awry, a senior analyst at GTM Research (who closely follows the Solar market and industry) commented “the extension to the federal ITC is without question a game-changer for U.S. solar’s growth trajectory. Between now and 2020, the U.S. solar market is poised to see a number of new geographies open up with a 30% ITC, within both distributed and utility-scale solar.”

Finally, the third and California state achievement was the December 15 proposed ruling by the California Public Utilities Commission (CPUC) to leave in place most of the charges and fees now in place between the state’s major investor-owned utilities (Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric) and customers who have installed residential and commercial PV systems. Though yet to be finalized (in January 2016), the proposed ruling leaves in place most of the terms that allow customers with PV systems to recoup their investments in a timely manner thereby increasing the desirability of these systems.

Challenges to PV-favorable net metering terms and (lack of) other fees have been raised in many states, and regulator decisions have been mixed. The proposed CPUC ruling is perhaps the strongest pushback by any state regulator to utility claims of the high costs distributed PV systems impose on other (non-PV owning) rate payers. While new costs are proposed, and some uncertainty is introduced by requiring PV-system owners to be placed on Time-of-Use rates (with unknown impact on their bills), the proposed ruling is seen as leaving the business environment favorable for continued expansion of distributed generation.

For now the sun shines on distributed generation and the growth of solar-sourced clean energy. Let us hope that all three events help realize solar’s potential contribution to our future energy mix for the sake of maintaining our habitable planet.

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

Solar Power International: Moving into Second Gear?

It’s a challenge to summarize what transpired over four days at an event with 600 exhibits, 70 concurrent sessions (forcing choice between 6 at a time), 15 manufacturer-sponsored hands-on training sessions, 10 workshops, plenary sessions, parties and, oh, did I mention solar-supportive keynote remarks by Vice President Joe Biden to an enthusiastic audience.  With participants from over 75 countries, it’s easy to see why Solar Power International (SPI) claims to be the largest and fastest growing solar conference in North America.  But let me try to extract a few themes from this mid-September event sprawled across all four Exhibit Halls at the Anaheim Convention Center.

Clearly the industry is growing.  In advance of the conference, the Solar Energy Industry Association and GTM Research released their quarterly update.  With 1,393 Megawatts of PV capacity installed in the second quarter, the US Solar industry remains on track for an annual forecast total of 7,700 MW.   Of this, 840 MW (60%) was installed in California.  (A brief reminder that the capacity of a typical nuclear powerplant is 1,000 MW.)  The fact that the California Senate and Assembly passed SB350 increasing the state’s current Renewable Energy target of 30% by 2020 to 50% by 2030 days before SPI added to the conference’s buoyancy.  Repeatedly cited was the statistic that California has over 55,000 employees working in the industry (more employees than the state’s top 5 utilities combined).

Clearly the industry faces challenges.  The major one is the currently scheduled expiration of the 30% residential tax credit and reduction of the commercial investment tax credit (ITC) from 30% to 10% fifteen months from now, the Administration’s request for a permanent extension of the ITC not withstanding. A Bloomberg forecast released at the conference anticipates that without an extension, 2017 will see installation activity dropping to its 2012 level.  The loss of the tax credit would hit California’s businesses as hard as elsewhere.  In addition, the fact that California’s Public Utility Commission (CPUC) is in the process of redesigning the utility rate structure, including deciding on an appropriate level of compensation for customers who generate their own solar energy, has the industry on edge.  Utilities have requested the compensation (or credits) allowed solar customers be reduced by 40%, and that fixed fees be added to solar users’ bills.  (If this sounds completely contrary to the legislative action on SB350 cited above, welcome to the world of Government.)

But beneath these Good News / Bad News headlines, several themes emerged that cut across the gazillion specific new product and service announcements.

Energy Storage developments are booming with a variety of technologies and products. Over 50 firms provided products or services related to Storage.  Those in California are as diverse as 90-year old Trojan Battery Company of Santa Fe Springs and Milpitas-based JuiceBox Energy, a start-up barely out of the garage.  Many clustered together on the exhibit floor in a zone known as the “Energy Storage Pavilion.” The CPUC mandate to the state’s three largest Utilities and other energy service providers to procure 1.3 GW of energy storage by 2020 creates an immediate market in California.  And the recognition that commercial electric customers can utilize storage to reduce their bills through reductions in their peak demand charges creates a market rationale for growing storage demand beyond the utility mandate.

Finance is another area experiencing dramatic change.   While the discussion only a couple years ago focused on lease or buy, a plethora of new financial instruments and capital sources have emerged.  Sessions and exhibits provided information on new approaches to debt financing for non-residential projects (which appears to focus on financial support for Commercial and Industrial (C&I) customers, a growing solar niche), Tax equity markets, and the pooling of solar project cash flows (in what’s become known as a YieldCo).  The good news is that investors (not just system owners) are seeing value (!) in PV installations.

And of course there were new panel developments, racking system improvements, Inverter advances and the like.

So what’s the take-away?  The Solar industry is growing through its increased cost-competitiveness as a result of new product and service innovation. This dynamic was well captured by Vice President Biden’s comment, “Anyone who thinks it (Solar) is not happening just take a look at the market.  It’s a competitive choice for consumers. …  Look, this isn’t a government mandate, this is the market working.”  Yes, but the uncertain future of tax credits and utility pushback (in California and elsewhere) continue the uphill slog.

California Energy Dreaming Costs Consumers Billions

By Dan McSwain, The San Diego Union-Tribune

I have a friend who periodically gets into trouble. Whenever we review the history of an episode, his explanation is always the same: “It seemed like a good idea at the time.”

Such hindsight leaps to mind as California lawmakers once again overhaul the state’s electricity industry. History suggests that consumers will pay dearly to see how this movie ends, regardless of whether the result justifies the price of admission.

Federal data indicates Californians paid $171 billion in higher costs for power over the last 20 years, compared to the national average. For perspective, this works out to roughly $12,300 per household, but bear in mind the total includes residential, industrial, commercial and government usage.

Those two decades included the 1996 partial deregulation, resulting power crisis and partial re-regulation in 2001, followed by a historic plunge into green energy that began in 2006.

Read full op-ed in the San Diego Union-Tribune

Renewable Energy’s Potential May Be Understated

By Gabriel Kahn, The Wall Street Journal

In February 2013, California energy officials sat down with power-industry executives to figure out how to avert an approaching calamity: The rapid rollout of wind and solar electricity was stressing the state’s grid. The more renewable energy California added, the more its power supply could be whipsawed by a cloudy day or a windy storm. Some at the meeting warned that problems, such as rolling brownouts, could start to show up later that year.

Those same worries were being echoed across the county as state authorities struggled to load aging electricity grids with ever-greater amounts of renewable power. At the time, renewable energy accounted for about 14% of California’s electricity output. Today, California often gets as much as 30% of its power from renewables; there are periods of the day when production can soar to 40%. California legislators just approved a plan that would require half of all power to come from renewables by 2030. Still, the tipping point the power industry feared hasn’t materialized.

The experience of California and other states with high concentrations of solar and wind is challenging long-held assumptions about the limits of renewable energy. As the boundary of what is considered possible expands, so does the momentum around investment in new technology and resources. Plenty of risks still remain. But the fact that the grid has been able to handle more renewables than previously thought is driving massive changes through the industry. One of the places it is being felt most acutely is among utilities.

Read full article in the Wall Street Journal

8 Facts That Explain SDG&E’s Complicated Relationship With Rooftop Solar

By Lisa Halverstadt, Voice of San Diego

Despite San Diego’s reputation as a solar mecca, San Diego Gas & Electric and the rooftop solar industry are consistently at odds.

In some ways, the game is rigged for these two to be foes: Rooftop solar has grown rapidly with the help of incentives and mandates, forcing SDG&E to integrate it. State requirements have ensured disagreements between the two play out publicly at the statehouse and at the Public Utilities Commission.

SDG&E has long argued, for example, that solar customers aren’t paying their fair share for use of the power grid, an argument being pushed by utilities across the nation. The solar industry and its supporters say SDG&E’s missing the big picture and discounting the value of rooftop solar, which allows everyday San Diegans to help the region reduce its greenhouse gas emissions. That’s far from the only dispute, though.

Here’s a breakdown of the realities contributing to SDG&E’s strained relationship with the solar industry…

Read full article from Voice of San Diego