During the past week, Rocky Mountain Power announced that they are recommending a three-part monthly rate increase for future residential net-metered solar customers, including a $15 fixed charge, a $9.02 per kilowatt for peak period demand, and 3.81 cents per killowatt-hour for the amount of energy used. While not applying to existing home solar produces, this would greatly disincentivize future installations.
The argument for doing this is based on a study conducted by Rocky Mountain Power claiming that rooftop solar customers are underpaying their actual cost of service by $400 per year. Subsequently, Rocky Mountain Power's external communications director Paul Murphy argued in an op-ed piece in today's Salt Lake Tribune that Rocky Mountain Power is committed to solar and customer fairness, but that the cost noted above represents a substantial subsidy.
If Rocky Mountain Power is committed to solar (and I doubt that they are), this action clearly shows that they want large-scale solar farms rather than residential solar. As a regulated monopoly, that makes perfect sense. They want to deliver all the power that we use, rather than a fraction. Residential solar production is a major threat to their revenue stream and that would really suck for them.
It is also rich that Rocky Mountain Power is so concerned about this particular subsidy. The International Energy Agency estimates that annual fossil-fuel subsidies amount to approximately a half-trillion dollars globally. Such subsidies do not include the externalized costs arising from air pollution, climate change, and other effects from fossil fuel combustion. Rocky Mountain Power gets a free ride on all those externalized costs. In a way, we as electrical consumers get a free ride too on our electrical bills, although we pay the price in other ways.
They also don't seem concerned about federal subsidies for rural electricity production or federal loan and loan guarantees. They aren't worried about the uneven costs of producing and providing electricity to rural and urban areas. Clearly some are subsidized and some are paying more than their share (NOTE: I am a firm supporter of ensuring that all American residence have reasonable access to electricity at reasonable costs and that we each bear the costs of ensuring that).
So, let's get real. If residential solar is as costly as they claim (and that should be confirmed by an independent audit rather than letting the fox guard the henhouse), Rocky Mountain Power is basically choosing to go after it simply because the last thing that they would want to see is a stampede to a paradigm where we the people are producing an increasing fraction of our own power. This happened in Nevada, affecting Nevada Energy's bottom line, ultimately leading to voters deciding to end their regulated monopoly.
My view is that Rocky Mountain Power is scared. Solar is getting cheaper. Residential electrical storage options are improving. Disruptive change is coming and people will be generating more and more of their own power and disappearing from the grid. These are attractive options not only for environmentalists, but anyone who believes in choice over monopolies.
Note: I purchased solar through the U's community solar program after moving this summer. We are scheduled for installation this month, but are already under contract and not affected by Rocky Mountain Powers proposed changes.
Addendum @ 3:45 PM 12 Nov: Details on RMPs filing for net metering rate changes available here. Comments can be sent to the public service commission at psc@utah.gov.
This topic always ruffles my feathers. More than 5 years ago I discontinued my residential participation in RMP's Blue Sky program. I canceled because much of the money paid by participants does not go to what they think it does. RMP has changed their "Where does my money go?" pie chart to show that 27% of what you pay goes towards admin, marketing and education. The remainder goes towards renewable energy purchase. What the pie chart no longer shows is that a large portion of the remaining 70% goes towards community solar grants. For example, money paid to Blue Sky has gone to solar installs for the Associated General Contractors of Utah, the McGillis School, Hogle Zoo, NOLS in Lander WY, Planned Parenthood, churches, US Ski and Snowboard Association, UTA, Westminster College, and many more. You can find the listing online.
ReplyDeleteThis really bugs me. My money is going to solar installs at private schools so they can lower their energy cost? Solar installs on church buildings which, in general, are lightly used a couple of days a week? I think not.
How about a renewable energy fee schedule that customers can view and choose to purchase the exact amount they want? RMP has resisted this. Now, as Jim pointed out, they have put up their first solar farm and are selling that to residents. I havent looked into this option to see how they charge customers for this. The last thing RMP wants is for you or for me to generate our own electricity.
I have put in a request to see what it would take panel and PowerWall-wise to go off the RMP grid. With some thoughtfulness I think this is an attainable goal for residents. The trick will be during deep-winter cold pools with cloud cover.
Thanks for this summary, Jim. I'm not sure I uderstand this part: :... $9.02 per kilowatt for peak period demand, and 3.81 cents per killowatt-hour for the amount of energy used."
ReplyDeleteWe have 3 kw of solar installed and net metered. Are they proposing to pay us $27/mo. plus 3.81 cents/kwh we feed into the system?
Based on last week's article in the Salt Lake Tribune (http://www.sltrib.com/home/4565812-155/rocky-mountain-power-asking-to-change), the monthly charges are:
Delete1. $15 service charge
2. A $9.02 "demand charge" which would multiplied against the maximum kilowatts used in any hour during the month
3. A 3.81 cents per kilowatt-hour for the total amount of energy used.
Item 3 is poorly explained, but I believe it is an additional charge of 3.81 cents per kilowatt-hour for energy purchased from Rocky Mountain Power.
Items 2 and 3 are complete BS. They basically are making people that have solar panels pay more for power than everyone else.
These changes would not apply to your existing system as they are not retroactive. They affect future installations. That being said, I find it hard to believe they won't come after current installs eventually.
I've had a look at the article, still don't understand the $9 peak power thing. But the 3.81 cents/kwh is what RMP will pay customers for what they feed into the grid. This is a dramatic change from the kwh-for-kwh swap that is currently in place (where RMP is essentially paying me anywhere from 8.5 cents to 14.5 cents per kwh).
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DeleteTry again:
DeleteFor explanation of demand charge look at the figure on page 2 of this filing from RMP:
https://www.rockymountainpower.net/content/dam/rocky_mountain_power/doc/About_Us/Rates_and_Regulation/Utah/Regulatory_Filings/Docket_14-035-114/11-9-16_Compliance_Filing/Joelle_R_Steward/exhibits/Exhibit_RMP___(JRS-5).pdf
The demand charge of $ 9.20 per KW is multiplied by the peak 1 hr average in the month, so add up all the biggies, stove, a/c, dryer, plus 1-2 Kw for miscellaneous, an dthen multiply that number by $9.20. You're probably looking at a $60-80 /month charge. Average max demand from a home is reported on the web as 8 - 11 KW. I'm not sure what number PacifiCorp is using.
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DeleteHere's where this short-sighted policy will lead. Very soon (as storage costs continue to drop) it will be more sensible for solar customers to disconnect net metering entirely and feed any excess energy they generate during the day into a small storage system, which they draw on at night and on cloudy days. In this way they get roughly 3x the value from their excess energy (effectively 10.5 cents instead of 3.8 cents per kwh)
ReplyDeleteAt the same time, they can keep their homes connected to the grid, forego the extra $15/mo. fee and the extra $9 peak power thing, whatever TF that is.
It's pretty clear the yahoos RMP has working on this have absolutely no idea wtf they're doing, what solar is, where it's going, or how to deal with it. Instead, they're contorting themselves in all sorts of ways to preserve a system that is transforming before our eyes. This may be messy for awhile, but this RMP "solution" is not long for this world.
Thanks for weighing in on this.
ReplyDeleteFirst disclosure. We have a “net-zero” house, built in 2010-11, with a ground source heat loop (“geothermal”) heating and air conditioning system, and all electric appliances since our house is highly insulated and more air tight than usual. I believe that our house demonstrates where we NEED to go for climate change reasons. As far as we understand it, we will be grandfathered at the old rates.
I think we need to look at the big picture. I have started to dig in to the filing by RMP. Under the old rates we have a bill of roughly $8.50 /month. On a daily basis, we supply power to the grid most of the daylight sunny hours, and draw from it at night. We make electricity credits in the summer and use them in the winter. In March our account is zeroed out.
Under the new rate schedule our minimum bill would be:
1. $15 connection fee,
2. Plus the demand charge based on $9.20 /KW. We are guessing our demand charges for most months would be $90. Our understanding is that the demand charge is based upon the MAXIMUM average KW demand for 60 minutes. We would be penalized for having electric appliances.
3. In February or March we would have say $5 for KWhr charges at 3.81 c/KWHr
In other words, a net zero house will see an increase of monthly bill during heating/cooling season from $8.50 /month to >$100 /month
Let’s look at the big picture of what behaviors this will drive.
1. We won’t buy an electric car. (the cost of recharging would go up due to the demand charge increase), so we will go on polluting the Wasatch Front air with our gasoline powered cars.
2. We will be driven to buy some sort of storage device sufficient to “overnight” - though I suspect the total cost will be too high for this to make financial sense. We will likely have to wait for a couple of years for a “smart device” that will limit our demand through timing elective appliances.
3. We have likely just seen $10,000 taken off the property value of our house. Solar and other renewable power just got much less appealing.
God help the planet!!. Pacificorp isn’t going to. Also pity the 2000- 3000 solar employees who are going to be out of a job.
What Pacificorp NEED to do is figure out HOW to store power and install those storage facilities, so that we can continue to move forward with the clean economy.
Further all electric appliance will be less appealing than gas powered - driving the "wrong" purchasing decisions.
DeleteIt's time for the state of Utah to consider ditching / buying out RMP. It's clear they are not looking for a solution that is good for Utahans, but rather preserving their shareholder profits. And of course, that's their job. They are not in the business of customer service; they're in the business of shareholder service.
ReplyDeleteQuestion for those who have looked at this more than I have re: grandfathering. If I were to install a limited system now, pre implementation, would I be able to expand at the grandfathered rate, or would that somehow trigger a change to the "new and improved" rate structure? TIA for any input.
ReplyDeleteI was wondering the same thing.
DeleteI am making enquiries.
DeleteNew equipment means new net meterING agteement, so probable it would trigger the switch to new rate. But not certain.
DeleteNew equipment means new net meterING agteement, so probable it would trigger the switch to new rate. But not certain.
DeleteNew equipment means new net meterING agteement, so probable it would trigger the switch to new rate. But not certain.
DeleteOur solar installer tells me that current practice is that net meter contracts are signed over to the new property owners on sale of the property. If the seller takes the equipment to a new location, the agreement travels with it.
ReplyDeletePardon my skepticism, but I'm doubtful this will continue if there is money to be made cancelling the agreement upon sale of the property, and re-signing the new owners under the new schedule of charges.
That would have a strongly negative impact on the resale value of homes. No mention of that made of course by RMP. Basically, it also means a slow transition to the draconian solar rates. Notice they aren't talking about that. Clever. Very clever.
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