Electricity Price Increases

[ultrarunner]

That's an increasingly frequent subject for discussion in our neck of the woods, and I think a real issue, though it isn't clear to me that there is a single solution.

If you ever want grid power, and I personally do because we can't realistically self generate enough power over a winter storm or during bad fires, then it seems to me that some sort of fee is in order for a grid interconnection. Commercially, it comes under the category of a "demand reservation charge", which is the maximum allowable amount of power that can be drawn ever. Basically, the company pays to reserve enough power "just in case". We pay one currently on an ag meter. My experience is that commercially it is priced up around the cost of leasing a standby generator, so it can get to be something of a toss up budget wise for a company.

The trend here is to raise the fixed fees, aka monthly meter charge, to pay for the costs of the transmission and distribution of electricity. So solar owners pay something towards the grid costs. Whether it is the right number is beyond what I know. An unintended consequence of raising the fixed electrical costs is that the power cost as a fraction of the bill goes down, reducing the incentive to conserve electricity. Historically, California has a trend of steadily reduced kWh/person/yr since the mid-seventies, but that has to end sooner or later. A fixed fee is also somewhat of a regressive tax, so complaints on that front are being vocalized.

If we were to add any additional solar would likely to be set up to maximize winter production, with panels much closer to the vertical than a typical roof mount solar. TBD at the moment as the utility doesn't seem to know its own mind about solar and batteries at the moment and what is or not permissible. Such is life, at least with this utility.

All the best,

Peter

I’m considering turning my panels to max the afternoon sun as peek pricing starts at 4 and in summer it can be daylight for many hours after.

Also, mornings, especially winter mornings, can be overcast… no rays to catch.

 

[WM75Guy]

I am all for renewables, just not mandated for the consumer. Texas is heavily invested in solar and wind. Yesterday at peak sunshine shows over 61% of generation was solar and wind. There is also generation capacity for when the sun doesn't shine and the wind doesn't blow. Keeping those sources idled still has a cost associated with it.

New battery storage facilities are coming online. There is one just south of me that recently came online. The picture shows it under construction in December 2024.

 

[California]

This may help a little.

PGE's lobbyists will no longer be funded from customer rate increases.

Ratepayers Score a Big Win Over PG&E, Other Public Utility Giants

After decades of taking it on the chin from public utility companies like PG&E and SCE, ratepayers scored a win on Saturday with AB 1167.

gvwire.com

"Investor-owned utilities have been inflating ratepayer utility bills, and using these funds on political lobbying efforts and promotional advertisement. While Californians continue to struggle with the state’s high cost of living, made worse by the nation’s second-highest utility rates." "Only behind Hawaii."

 

[KennyG]

Lobbying is an interesting issue. Why is it done? Because for many companies, the return on investment from lobbying is much higher than improving products or increasing efficiency. It's not the ideal situation but from a shareholder viewpoint it's the right thing to do and in some cases it's an advantage for the consumer. Who's fault is it? Is it the company for taking advantage of it or is it the government that has so much control over the operation of the company?

 

[rontaki]

This may help a little.

PGE's lobbyists will no longer be funded from customer rate increases.

Ratepayers Score a Big Win Over PG&E, Other Public Utility Giants

After decades of taking it on the chin from public utility companies like PG&E and SCE, ratepayers scored a win on Saturday with AB 1167.

gvwire.com

"Investor-owned utilities have been inflating ratepayer utility bills, and using these funds on political lobbying efforts and promotional advertisement. While Californians continue to struggle with the state’s high cost of living, made worse by the nation’s second-highest utility rates." "Only behind Hawaii."

We, the customers will still pay. The fox guarding the henhouse!

 

[Larry Caldwell]

We often see that renewables are cheaper than other sources. However, you very seldom see any explanation of the basis for that conclusion. Windmills and solar cells are cheaper on an installed megawatt capacity basis than any other option. However, when you look at actual power generated, they only generate about 1/3 the annual production of fossil or nuclear sources. Also, inherent in installation of renewables is the need to install and maintain reliable other sources which are then underutilized. The cost of that unused backup capacity is never considered in the cost of renewable energy. In economic terms this is an externality that should be included.

Wind and natural gas are excellent when paired. Wind is the cheapest to build, natural gas is the second cheapest. Natural gas turbines are easy to start up and shut down. Their down time does not cause wear to the turbines, so the down time does not reduce the productive hours of the equipment. Meanwhile, wind turbines can produce power with no fuel costs, which runs about 8 cents/kwh for natural gas. A 1 mw wind turbine thus saves about $80,000/hour in fuel costs, assuming it is running. If it has a 30% duty cycle, that is still $24,000/hour over the lifetime of the windmill. Construction cost of wind and NG generating capacity is comparable.

Residential energy has certainly become more complex. In the old days they hooked you up and you paid the bill. Now there is a move to electricity as the dominant utility with PV and possibly battery storage at the end user and multiple sources from the suppliers. I am a little astonished at the amount of industrial solar being built.

Electricity - Construction cost data for electric generators - U.S. Energy Information Administration (EIA)

www.eia.gov

 

[ultrarunner]

Wind and natural gas are excellent when paired. Wind is the cheapest to build, natural gas is the second cheapest. Natural gas turbines are easy to start up and shut down. Their down time does not cause wear to the turbines, so the down time does not reduce the productive hours of the equipment. Meanwhile, wind turbines can produce power with no fuel costs, which runs about 8 cents/kwh for natural gas. A 1 mw wind turbine thus saves about $80,000/hour in fuel costs, assuming it is running. If it has a 30% duty cycle, that is still $24,000/hour over the lifetime of the windmill. Construction cost of wind and NG generating capacity is comparable.

Residential energy has certainly become more complex. In the old days they hooked you up and you paid the bill. Now there is a move to electricity as the dominant utility with PV and possibly battery storage at the end user and multiple sources from the suppliers. I am a little astonished at the amount of industrial solar being built.

Electricity - Construction cost data for electric generators - U.S. Energy Information Administration (EIA)

www.eia.gov

Tiered pricing and rate plans were the Camels nose under the tent.

The increase in cooling demand focused peak use to hot weather which often meshes with solar production.

Several with plans to grid tie found home power production more economical than the cost of grid infrastructure…

Almost seems like the promise of energy so inexpensive through nuclear was never made… or nothing more than the product of wild imagination.

I’m very pleased with my home solar but still have a natural gas bill each month…

 

[WinterDeere]

I am a little astonished at the amount of industrial solar being built.

I remember reading years ago that, while residential scale solar is and would remain a financial loser, utility-scale solar was already profitable a decade or more ago.

 

[ponytug]

I remember reading years ago that, while residential scale solar is and would remain a financial loser, utility-scale solar was already profitable a decade or more ago.

For the ROI, I think that a lot depends on your local power costs, local construction/installation costs, and local solar availability. For us the locally high power costs dominated, as did our high installation cost, and relatively poor solar availability. For us, we decided to install solar when my ROI suggested a 7 year return on investment, including capital costs. Electricity rates that rose faster than projected drove the actual ROI to 4.5 years.

I can't say it often enough, but I think the economics of installing solar is hyper local. I've lived places where overcast skies predominate for much of the year, and that is going to make solar a lot less economical for most folks.

That doesn't mean that there might be non-economic reasons to install solar, e.g. grid independence, reducing a fossil fuel footprint, or improved resilience. YMMV (a lot).

All the best, Peter

 

[WinterDeere]

...my ROI suggested a 7 year return on investment, including capital costs. Electricity rates that rose faster than projected drove the actual ROI to 4.5 years.

That's a good benchmark, but was this factoring in any incentives of tax breaks derived from the installation, or actual full invoice? I think the paper that called it a financial loser at the residential scale was using full invoice costs, knowing that even if you're not paying for it out of your own pocket, the community is as taxpayers.