« LA Hearing Set for SB39Sarah Dara Joins Run on Sun »

It's On - PG&E Declares War on Solar!

02/12/13

  03:05:00 pm, by Jim Jenal - Founder & CEO   , 678 words  
Categories: All About Solar Power, Solar Economics, Solar News, Utilities, Ranting

It's On - PG&E Declares War on Solar! - UPDATE

UPDATE - Interestingly, the article cited below has been removed from the PG&E website.  Ms. Burt, however, appears to still be employed by the company and presumably still holds the same, combative views—even if her employer no longer wants to see them quite so public. 

Google, however, has the story cached and you can read her original post here.


PGE's chief customer officer

Who is this woman and
why is she attacking solar?

In case you had any doubts, the attack on the underpinnings of the solar industry - net metering - has begun in earnest as evidenced by this Declaration of War from PG&E’s “Chief Customer Officer,” Helen Burt. The only question now is, how will the industry respond?

In a recent post on the PG&E website, Ms. Burt continues the populist attack on solar, claiming that solar customers who use net metering (essentially every residential solar customer and all but the very largest commercial customers) are not paying “their fair share.”

Here’s her take:

When customers install solar and use Net Energy Metering, they avoid paying their fair share of the electricity grid they use at night and of various programs that further California’s environmental and social policies. Remaining utility customers pay for the fixed costs of the electricity grid and other programs, driving their rates higher.

Frankly, this is simply nonsense.  All customers, including those who install solar and use net metering, are billed the same way to cover the costs mentioned by Ms. Burt.  But here’s the thing, the amount of that payment is tied to energy usage - the more kilowatt-hours you consume in a billing period, the more you pay for grid maintenance. Is that the proper way to cover the cost of fixed assets?  Perhaps not, but one thing is for sure, it wasn’t the solar customers who designed PG&E’s rate structure.

So guess what?  If you invest in LED bulbs for your home or a more efficient HVAC system on your commercial building, you will lower the amount of energy you consume - and hence you will lower the amount you contribute to covering these same costs.  Is that also unfair?

As we reported at the time, the California Public Utilities Commission (CPUC) is performing a study now to try and assess the true cost-benefit equation from solar net metering and recently the folks at Vote Solar commissioned their own study which found a net benefit to all ratepayers - including those who do not install solar.  Ms. Burt dismisses those results as “predictable” - that is biased - without ever bothering to point out that the state’s public utilities, including PG&E, had previously released their own study, with just as “predictable” results.

Regardless of how the CPUC’s study turns out, Ms. Burt makes clear that PG&E is going to continue their assault on solar: “PG&E is working with the CPUC and Legislature to find solutions for customer solar installations that mitigate or eliminate these cross-subsidies from nonsolar customers to others."  Translation? “We intend to do everything in our power - using ratepayers’ money - to eliminate net metering!”

In PG&E’s view, they should receive any excess energy production from solar customers - which they immediately sell to the solar customer’s neighbors at full retail rates - for free.  Nice deal if you can get it - but is that fair?

Of course at bottom is the simple truth that solar installations are increasing throughout California and utilities like PG&E know that as solar costs come down, they are going to start losing more and more revenue.  Since distributed generation reduces their peak load, they have less and less justification to build more generation capacity, which is the basis for their guaranteed returns.  In a world where many more utility customers can afford to install solar, this is simply not a sustainable business model.  So PG&E is doing what every dying industry does - attacking the “fairness” of the competitor that is eroding their bottom line.

It will be up to the CPUC, the Legislature - and ultimately the solar industry - to see that the faux populism of utilities like PG&E is unmasked for what it is - naked self-interest.

5 comments

User ratings
5 star:
 
(2)
4 star:
 
(0)
3 star:
 
(0)
2 star:
 
(0)
1 star:
 
(0)
2 ratings
Average user rating:
5.0 stars
(5.0)
Comment from: cbdh19 [Member]  
5 stars
cbdh19This is so maddening, but also hardly surprising. The Big Utilities are going to fight the democratization of energy tooth and nail. But the more people who have solar, the more people who will realize how awesome it is to break free from the BU hegemony to energy independence. All we need is a critical mass. We’re not even close to that critical mass of home/small/independent solar energy producers, and BU don’t want us to get there, because once we do, it’s game over for their top-down, monopolizing business model.
02/12/13 @ 17:43
Comment from: warmac [Member]  
warmacI totally agree with Burt. Feed in tariffs are the future. The fact that you can not track kWhr offset through net metering makes it difficult to identify the environmental attributes and does noting to discourage consumption and efficiency. Put in a 2nd meter and provide an incentive rate with a 10 year term. Couple this with our tax credits and we have an improved German model. The Government can tax normal consumption and use it to incent efficiency. The RE generation after 10 years competes with any new generation and wins. A win-win-win, the customer wins, the utility wins, and the goverment wins. It all creates Jobs!
02/15/13 @ 06:00
Comment from: Jim Jenal - Founder & CEO [Member]  
Warmac - Not sure you can “totally agree w/Burt” when you advance a proposal she never made. Any reader of this blog would know that I support a properly designed FiT. But it isn’t true that you cannot measure kWh offset under a net-metering scheme, even if it isn’t commonly done. Nor do I know how much contact you have with folks who have installed solar, but I can tell you that the majority of our clients become very focused on how much energy they are using and become extremely focused on reducing waste. In any event, the long term solution has to include changes to the utility’s rate structure and, ultimately, business model. Jim
02/15/13 @ 07:32
Comment from: eesmc [Member]  
5 stars
eesmcThanks for the great article Jim. Could you suggest links to other posts of yours, or outside resources, that give newcomers greater insight into the traditional business model of utilities and how distributed generation fits into the picture? I found it especially interesting that you referred to PG&E as being part of a dying industry… so which aspect exactly is dying/changing the most?
02/17/13 @ 20:00
Comment from: Jim Jenal - Founder & CEO [Member]  
Stephen - It is the generation side that is changing the most - as fossil fuels get phased out and distributed generation becomes an ever bigger part, their business model becomes less and less sustainable. (Of course grid management is closely tied to this - our present grid control structure is just not up to the task of providing in the 21st century - whether to handle distributed generation or the threats of cyber-attacks - our utilities are just not prepared.) That also means that rate structures need to change. Presently, utilities get a guaranteed return on their infrastructure investment - though failed nuclear reactors mess up that calculus. But that only works when you are regularly building more infrastructure. So you see the death-rattle in comments like Ms. Burt’s - she is trying to hold back the tide by complaining that it isn’t fair to the poor. As if that was a major point of concern of any for-profit entity these days. Not sure how this will shake out, but I’m pretty confident that the solar industry is on the side of the future. Jim
02/17/13 @ 23:33
Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
In addition, Run on Sun offers solar consulting services, working with consumers, utilities and municipalities to help them make solar power affordable and reliable.

Ready to Save?

Let’s Get Started!

We're Social!



Follow Run on Sun on Twitter Like Run on Sun on Facebook

Search

Run on Sun helps fight Climate Change
powered by b2evolution