Tag: "cpuc"

02/12/13

  02:05:00 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.

 Permalink7 comments »

11/30/12

  10:00:00 am, by Jim Jenal - Founder & CEO   , 196 words  
Categories: All About Solar Power, Solar Economics, SCE

SCE Rates Set for 3-Year Climb

The California Public Utilities Commission (CPUC) just approved a modified rate case for Southern California Edison (SCE) that will guarantee rate increases for the next three years.  According to an article discussing the decision by Marc Lifsher in the LA Times, SCE’s rates will increase on average by 5% this year.  But that is just the start of the bad news for SCE ratepayers - SCE’s rates will increase by 6.3% for next year and by an additional 5.9% in 2014!

According to a press release put out by the CPUC, SCE has twenty days to file new tariffs with the CPUC which will become effective immediately.

For a commercial SCE customer who presently pays roughly $10,000/month, they can expect to be paying $11,720/month once the three rate increases take effect - an increase of more than $20,000/year.

There can be no doubt that comparable - or higher - rate increases will continue.  Adding a solar power system to your business or home is easily the best hedge that you can have against such one-way cost increases.  Give us a call (626-793-6025) or click on that big Sun on the right and let’s get started today at putting you in charge of your energy future.

08/02/12

  10:43:00 am, by Jim Jenal - Founder & CEO   , 320 words  
Categories: Solar Economics, SCE

Green is Now: California's IOUs Hit RPS Target

While a meaningful national energy policy is nowhere to be found, California continues to lead the way, announcing that its three Investor Owned Utilities (IOUs) have reached their intermediate target of 20% energy from renewables in 2011.  According to a Renewables Portfolio Standard (RPS) Status Report just released by the California Public Utilities Commission, Southern California Edison (SCE), San Diego Gas & Electric (SDG&E) and Pacific Gas & Electric each exceeded the 20% target for renewables in 2011.  Specifically, SCE lead the way with 21.1% of its energy delivered coming from eligible renewable sources, followed by 20.8% for SDG&G and 20.1% for PG&E.  Collectively, the three IOUs account for roughly 68% of the state’s electric retail sales.  Unfortunately, the report does not provide a breakdown of those numbers by type of renewable energy source.

Most of the gains are the result of utility-scale renewable energy products, but customer-side renewable energy generation - such as that created through the California Solar Initiative (CSI) - has also played an important role in two ways:

  • First, while the system owner of a customer-side facility generally retains ownership of the renewable energy credits (RECs), in some instances they can be sold to an IOU which can then count it toward the RPS goals.
  • Second, since customer-side generation reduces electrical demand that must be served by the IOU, it decreases the denominator in the percentage calculation thereby improving the reported RPS score.

Under the RPS, the IOUs must average 20% from 2011-2013, 25% from 2014-2016 and 33% by 2020.

Growth of renewables in California has been dramatic: between 2003 and 2011, 2,871 MW of renewable capacity came online, with over 300 MW coming online in the first half of 2012 alone.  But future growth stands to be even more dramatic with more than 2,500 MW scheduled to come online before the end of the year!  According to a report in Forbes, that is the equivalent at peak output to the electricity generated by five nuclear power plants - which is good news given the problems at San Onofre.

06/05/12

  08:02:00 am, by Jim Jenal - Founder & CEO   , 1388 words  
Categories: All About Solar Power, Solar Economics, SCE, Feed-in Tariff, SDG&E

CPUC Provides Progress on Net Metering

Say what you will about the California Public Utilities Commission (CPUC), but their recent rulings have been strongly in support of the solar industry and on May 24, they did it again. In a unanimous decision, the CPUC voted to increase the cap on net metering, overriding protests from some utilities and misguided “consumer” advocates.

At issue was the manner by which the statutory cap on net metered installations was to be computed.  Under existing state law, California utilities are obligated to accept net metering connections from solar power customers until the installed capacity of the utility’s solar customers equals 5% of the “aggregate customer peak demand."  The problem before the Commission was how to define the denominator: does aggregate customer peak demand mean the peak demand that the utility as a whole had seen (as the utilities argued) or was it the sum of the peak demand for each of the utility’s customers?

That turns out to be a very significant difference and the CPUC came down on the side of the solar industry.  As a result, the total amount of net metered capacity under the law will now be computed to be 5.2 GW compared to just 2.4 GW under the utility’s interpretation!

Unfortunately, the Commission didn’t stop there.  Part of the argument from the utilities was the claim - echoed by TURN - that net metering amounts to a “silent subsidy” from the general rate payer to more affluent customers who can afford solar.  In their ruling, the Commission authorized a study to investigate that claim and to quantify the cost-benefits of net metering to the larger rate paying community.  Wrote the Commission:

The goal of the study will be to provide the Commission and all interested parties, including the Legislature, with a better understanding of who benefits, and who bears the economic burden, if any, of the NEM program. The report should quantify the costs and benefits of NEM to participants and non-participants and should further disaggregate the results by utility, customer class, and household income groups within the residential class. The study should also seek to gather and present data on the income distribution of residential NEM participants. In order to assess the costs and benefits at various levels of NEM implementation, the above analyses should be conducted using multiple NEM penetration scenarios, including at minimum, the capacity needed to reach the solar photovoltaic (PV) goals of the CSI and the estimated NEM capacity under the five percent cap as defined in this decision. The results of such a study then can be used by the Commission to set future policy for the NEM program, with full awareness of the economic impacts of any policy choices on all classes of ratepayers.

Once the study is complete, the Commission is to promulgate new regulations regarding net metering based on that analysis.  All of this is to happen by the end of 2014 - but if new rules aren’t in place by then, net metering will be suspended until such time as they are!  Again quoting from the Commission:

We anticipate this temporary suspension in the NEM program, effective January 1, 2015, will remain in place pending the issuance of new rules at the conclusion of a rulemaking proceeding we will commence once the study described above is completed. Of course, if the study can be completed and the new rules are issued prior to December 31, 2014, then the suspension of the program in 2015 will not be necessary. But if the post-study rulemaking remains open and incomplete on January 1, 2015, then under the terms of today’s decision the program will be suspended thereafter, and the utilities will not accept any new NEM applications, until the new rules are issued and take effect.

At the risk of sounding cynical, this sure feels like an opportunity for the utilities to game the system and drag out the rule making if they cannot get the deal that they want.  This process will bear close observation!

As an aside, there was one odd detail buried in the decision - the numerator in that 5% computation is supposed to be the installed solar capacity.  However, the value used is “CEC-AC Watts” which is computed as the PTC rating of the solar panels used, multiplied by the total number of solar panels, multiplied by the efficiency of the inverter(s) used.  So for example, an installation of 20 LG 250 Watt solar panels driving 20 Enphase M215 micro-inverters would have a Nameplate power rating of 20 x 250 =5,000 Watts.  The PTC rating of the LG 250, however, is 225.2 Watts and the Enphase M215 is 96% efficient, meaning that the CEC-AC rating would be:

20 x 225.2 x 96% = 4,323.84 Watts

But here’s the curiousity - rebates aren’t paid based on CEC-AC Watts - they are paid on the CSI rating.  The CSI rating takes the CEC-AC rating and modifies it based on the actual characteristics of the site - shading, attachment method, azimuth and tilt.  This is certainly reasonable as all four of those factors combine to have a significant impact on the energy yield of the system - and that is what an EPBB rebate is supposed to be incentivizing.  So why doesn’t the net metering cap use the sum of the CSI ratings as its numerator?  And if it did, how big of a difference would it be?

We decided to find out.  We took the most recent CSI data set (dated May 30, 2012) and created a pivot table that would report by year and for each of the three investor-owned utilities ("IOUs")  subject to CSI, the sum of the CEC-AC and CSI ratings and then give us the ratio.  Here are our results combining all three IOUs in each year (in kWs):

CSI Ratings vs CEC-ACThese are very interesting numbers - the difference between the CEC-AC  rating versus the system-specific-corrections-adjusted, CSI Ratings is very small.  Now why is that?  The simple answer is that you can actually score higher than 100% when you go from CEC-AC to CSI.  How can that be?  And how often does that actually happen?

To probe a little deeper we decided to just look at systems installed in SCE territory.  Here’s what we found:

SCE CEC-AC versus CSIIndeed, over the total lifetime of the CSI project, systems installed in SCE territory have averaged 101.7%!

(The numbers drop off in San Diego Gas & Electric to ~98% whereas in PG&E territory the average drops to 96%.)

Still, as a solar installer, we had to admit that these numbers were troubling - we’ve done lots of rebate calculations since 2007 and we really don’t recall seeing design factor scores greater than 100%.  An hour of experimentation with the online rebate calculator confirmed that experience - we could get configurations to equal 100%, but not exceed it.  So what was the source of these results?

Then it hit us - we were calculating based on EPBB rebates - which makes sense because that is where the CSI rating is reported.  However, larger solar systems receive PBI rebates - payments made based on actual performance over five years.  What would happen if we distinguished PBI from EPBB rebated systems - would that explain our difference?  Indeed it would - check this out:

epbb vs pbi on design factorHow about that?  From 2006 to 2009, neither rebate method averaged over 100%.  But starting in 2010, PBI rebates consistently averaged over 100%, even while EPBB averages remained largely unchanged.

So why the difference?  In July of 2009, the rebate calculator was changed.  (You can find links to both the current and the old calculator on the CSI website.)  It appears that the real difference in how the two calculators work is for PBI rebates - where it allows the design factor to exceed 100%.  More importantly, the new calculator takes into account single or dual axis tracking configurations for PBI rebated arrays.  Scanning the data, we discovered a site that actually has a recorded design factor of 148%!  This is a 1MW system and you can see how a substantial number of comparably sized installations using single or dual axis tracking would really skew the results.

So now we understand where the numbers came from, but we are still somewhat troubled by our results.  Are any of these utility-scale systems operating under net metering rules?  That seems highly unlikely.  And assuming that is the case, shouldn’t they be excluded from the net metering cap computation?  In which case, using the CSI rating would add an extra 5% to that numerator, and that would be a good thing!  Any CPUC Commissioners or other insiders who might care to educate us further, please do so in the comments.

04/18/12

  09:33:00 am, by Jim Jenal - Founder & CEO   , 149 words  
Categories: All About Solar Power, SEIA, Commercial Solar, Residential Solar

CPUC Ruling on Net Metering Cap - Take Action!

The folks at SEIA - the Solar Energy Industry Association - have put out an action alert for Californians who are concerned about expanding access to solar power through the expansion of the net metering rules.  Here’s their action alert - please take a look and then click on the link to add your voice.

The California Public Utilities Commission (CPUC) is deciding how much customer-owned renewable energy is allowed to get the bill saving benefits of net metering.  This statewide clean energy credit program has empowered over 100,000 solar energy systems to be installed on homes, businesses, schools, libraries and other buildings around the state.

The Commission has proposed allowing for more homeowner solar– and some utilities are trying their best to restrict continued access to it.

Click here to tell the CPUC that you support their preliminary decision to give more Californians access to solar net metering: I support net metering!

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Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

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