California's New TOU rates based on Income and CA Solar future

[DanS26]

Two significant processes are involved here.

First, consumers, from the early days of electrification, were not informed nor charged for the difference of the cost of produced power versus the cost of delivering power. Two very different cost structures...one is variable cost and the other fixed cost. In the simplicity of charging one cost of a kWh the seeds of our current problems were sown.

Second, the idea that to subsidize and encourage solar production at the residential level the regulators required POCOs to pay retail for a kWh instead of wholesale for that power. That ruling aggravated and exposed the difference in cost of producing power power versus the cost of transmitting power.

How do we fix this?......get rid of the subsidies and pay the homeowner the wholesale cost of excess power produced on a real time basis, There is a big difference between selling power to the grid at 10am versus 4pm.....and yes if you want to buy power from the grid at night then you have to pay a fixed cost to pay for the transmission infrastructure that you are attached.

[bcroe]

I think I keep hearing, price paid to private PV owners for kWh is
way less than they can buy them for, to cover the transmission
costs. EXCUSE ME, but the power I send to the grid goes directly
down the street, SAVING the Po Co the cost of sending from their
plant. Therefore the transmission argument is invalid.

Of course I am getting 1:1 price on our plan, since there is direct
kWh trading, no purchase money involved. Bruce Roe

[Reid1boys]

Two significant processes are involved here.



How do we fix this?......get rid of the subsidies and pay the homeowner the wholesale cost of excess power produced on a real time basis, There is a big difference between selling power to the grid at 10am versus 4pm.....and yes if you want to buy power from the grid at night then you have to pay a fixed cost to pay for the transmission infrastructure that you are attached.

Whatever rules they propose and pass from today moving forward is what it is. So as a possible solar owner, i could do the research and decide whether those rules make it worth it to me to invest in solar.

But what they are doing is a bait and switch. In 2017 I looked at the rules put forward to us, researched costs and decided to agree to their deal. Now, 6 years later they say... well hold on a minute. They have already increased my monthly fixed charge to be hooked up to the grid to $30 dollars per month and now they are essentially admitting defeat in past attempts to change the rules for people on NEM 1.0, so they approached it from a different angle. They say... yea, ok, we will not change the rules for how you are credited for each KwH you produce, but we want to charge you a flat monthly fee, based upon your income to make things more 'Equitable," on for low income.

Huh.... no, you mean since you failed to go back on the deal you made, you are gonna add some additional BS costs that will impact solar owners far more than any other customer. Lowering the per KwH cost for electricity will help those who buy YOUR electricity, but it will crush those that dont.... which is exactly what they wanted. They wanted solar owners to start paying again since many dont pay much at all and that hurt a large source of revenue for them.

Total BS and I look forward to seeing how the lawsuit plays out.

[DanS26]

Well yeah.....unwinding the unintended consequences of bad policies in the past is a real b$tch and very difficult to do......just don't touch my subsidy or make me pay more with "additional BS costs".

It is a true mess and going forward it is going to get messier.

[Reid1boys]

Well yeah.....unwinding the unintended consequences of bad policies in the past is a real b$tch and very difficult to do......just don't touch my subsidy or make me pay more with "additional BS costs".

It is a true mess and going forward it is going to get messier.

Were those bad policies? The state benefits from a large amount of solar power. That large amount of solar power would never had happened if not for those policies. 20 years ago, solar was simply too expensive for people to justify the investment. So they subsidized many of us and that gave us the push to put all those panels on our roofs. That in turn has kept how much pollutants out of our air? Again, that is a positive. Not building more plants is a positive. But now that the state has reaped all of the positives, they want to punish those of us that helped them reach their goals.... and that is ethically and morally wrong.

Lets be real.......why they think our costs should be connected to our income is unreal. Imagine doing that in other areas. Hey, that house will be 300k if you make this income, but if you make that income, the house is 495k.

Imagine buying groceries and having prices be determined by your income.

This is about to unleash a revolt on these politicians IMO. Ive been a dem my entire life. Tax me based upon income and create policies to help low income.

But tax me here, then charge me more for services based upon income???/ Ill work to get you voted out like never before.

[DanS26]

The policy of rewarding and subsidizing residential solar may not have been bad for some of the reasons you describe but the methods to implement the subsidy could have been better thought out IMHO to avoid many of the unintended bad consequences.

The POCOs were never 100% on board and it ends up being an adversarial relationship with regulators resulting in the homeowners being caught in the middle.

[azdave]

The POCOs were never 100% on board.

Fixed it for you.

The POCOs don't want anyone in their business.

The biggest POCO here (APS) secretly spent almost 13 million dollars getting their hand-picked candidates elected to the "independent" Arizona Corporation Commission (who then quickly changed the grid-tie contract rules heavily in favor of the POCOs). When the news of this "dark money" was finally discovered, the courts found it was legal. How can it be legal for a monopoly utility to secretly use 13 million dollar of customer payments to support two candidates who are supposed to be impartial public servants that pledge to protect the public from an over-aggressive utility?

https://www.azcentral.com/story/money/business/energy/2019/03/29/arizona-public-service-admits-spending-millions-2014-corporation-commission-races/3317121002/

[Reid1boys]

The policy of rewarding and subsidizing residential solar may not have been bad for some of the reasons you describe but the methods to implement the subsidy could have been better thought out IMHO to avoid many of the unintended bad consequences.

The POCOs were never 100% on board and it ends up being an adversarial relationship with regulators resulting in the homeowners being caught in the middle.

What are the "Unintended bad consequences?" There is zero evidence to show there is some cost shift. I would argue the opposite. All of that solar we put into the grid saves them money by sending it to my neighbor, thus saving them money on transmission lines. The utilities come up with several negatives and I appreciate them trying to look after all the low incomes people (SMH) but they dont speak of a single positive impact of solar. They care about one thing and one thing only.... increasing their revenue, and taxing solar users up front is the way to do it.

[DanS26]

You and Bruce need to get together.....the transmission and distribution system is a sunk (ie fixed) cost. It doesn't make any difference if that system carries 1kwh or thousands of Mwh.....the cost has to be amortized over the system life. The POCO has to recoup that investment or go bankrupt. There is no "savings" if POCOs do not use those lines.....they still have to be paid for whether they are used or not. It is a sunk cost that has to be recouped.

We see that backward argument that the POCO's are saving money on transmission all the time....it makes no sense from an economic point of view.

[SunEagle]

You and Bruce need to get together.....the transmission and distribution system is a sunk (ie fixed) cost. It doesn't make any difference if that system carries 1kwh or thousands of Mwh.....the cost has to be amortized over the system life. The POCO has to recoup that investment or go bankrupt. There is no "savings" if POCOs do not use those lines.....they still have to be paid for whether they are used or not. It is a sunk cost that has to be recouped.

We see that backward argument that the POCO's are saving money on transmission all the time....it makes no sense from an economic point of view.

I agree. The POCO is also a business with investors that want to see their money grow. If the POCO is not making the profits they say the should then they lose investors.

Remember that the POCO is in competition with the co-generators (home owners with solar) and will fight to get back on top. You won't be able to stop them unless you decide who you want to run the government there and who will be the PUC friends.

[DanS26]

The POCOs need to be made partners rather than adversaries in this transition to distributed and renewable energy. How do you do that?

Well first, you do not force POCOs to purchase power at retail rates....that is idiotic and creates the kind of goofy power economics we see across the US and especially CA where rooftop solar is becoming a large factor in the utility calculations for profitability.

Second, it is not the POCO's responsibility to encourage distributed energy production. If the government wants more solar then let the government directly subsidize the homeowner. Instead of a 30% energy credit, make it 80% or 90% credit. Require the POCOs to purchase distributed power but get the POCOs out of the subsidy picture. Now everybody is happy except the taxpayers and that is the government's intent in the first place.

Finally, as renewables and distributed generation increase the regulators have to keep a keen eye on base load generation. Working with the POCOs, the regulators need to make sure the lights stay on no matter what.

[bcroe]

In the phone business, and later in the electric power business, it
was decided that those in the country should get the same service
as the town and city customers, at the same cost. So from tthat time
a century or so ago, the city customers have been subsidizing the
lines to the country. Is that wrong or unfair? It has been considered
OK that everyone pays the same rate for a long time.

Several decades ago I managed to get my total electric bill below
$20 a month, seasons the furnace did not run. That was mostly the
connect fee, which I took as covering fixed costs like lines and
transformers. I am sure the PoCo did not like it, but politically
would not dare to complain about me being so efficient.

Now I am in a similar situation. I pay the connect fee, and use very
little electricity. Is this so different? The main difference is, I am
helping the PoCo level their load (reducing transmission costs) and
give them some 2000 kWh of free energy most years. The peak
energy I send out largely goes to run my neighbors AC, virtually no
extra transmission cost involved.

I would not be too upset if the PoCo got to keep 1 of every 10 kWh
I generated, that encourages my efficiency and costs me little. But
we are not going to practically account for the movement of every
electron volt. What has sometimes happened, is a PoCo has
taken a couple pieces of the above puzzle, and hugely exagerated
them while ignoring any parts that reduce their cost, or the costs of
very efficient consumers without solar. Their objective is not to be
fair, but find ways to drive private solar outside of practical. Is solar
good, but private solar bad? Bruce Roe

[DanS26]

In the phone business, and later in the electric power business, it
was decided that those in the country should get the same service
as the town and city customers, at the same cost. So from tthat time
a century or so ago, the city customers have been subsidizing the
lines to the country. Is that wrong or unfair? It has been considered
OK that everyone pays the same rate for a long time.

I can't speak for the phone business, but for rural electrification it was funded and subsidized by the Federal government. City folks and the public utilities were not involved except to pay their taxes. At the time in the 20's and 30's it was thought to be communism and many fought hard to stop that type of socialism. How dare the consumers of a product be the owners of the means of production, transmission and distribution. It turned out to be an unmitigated success. Rural people and the government wanted electrification outside of the shareholder owned public utilities and they got it.

Well, solar and renewable energy owners and the government want the benefits of non-fossil fuel energy. Lets give it to them and work as partners with public utilities....just keep the subsidy requirements away from the public POCOs. There are many schemes to accomplish this goal in a sane and economic fashion. The POCOs will adjust to sane regulatory processes. It's just idiotic to me that some state regulators picked the schemes that are the most likely to NOT succeed.

[Ampster]

I..... No wonder people are leaving that state to go somewhere else.

Ironically two people I know who moved to Texas brag about no income taxes. When I ask them about their property taxes I find out they pay more in property taxes than my combined property taxes and income taxes. California is still the most populous State and it is getting crowded so we can afford to send some people elsewhere.

[SunEagle]

Ironically two people I know who moved to Texas brag about no income taxes. When I ask them about their property taxes I find out they pay more in property taxes than my combined property taxes and income taxes. California is still the most populous State and it is getting crowded so we can afford to send some people elsewhere.

I guess it differs depending on what I read that provides detail on what the CA populace is doing. I also don't doubt that some places in the US are more expensive to live in then others. Pick and choose but do your research.

Here in Florida (at least where I live) property taxes are reasonable and power is less then $0.10/kWh.