Tag: "distribution"

01/08/19

  07:24:00 pm, by Jim Jenal - Founder & CEO   , 455 words  
Categories: All About Solar Power, Solar Economics, SCE, Residential Solar

Clean Power Alliance is Coming - is that a Good Thing?

Clean Power AllianceThe Community Choice Aggregator (CCA) for LA County, Clean Power Alliance (CPA), is set to begin service to SCE customers in 31 cities starting February 1.  As this has just sort of been announced as a fiat accompli with very little information to consumers, we wanted to set the stage for an analysis that we will be publishing that should answer the question - is this a good thing or not?

Let’s start with the basics, what is a CCA? Here’s a definition from an EPA website:

Community choice aggregation (CCA), also known as municipal aggregation, are programs that allow local governments to procure power on behalf of their residents, businesses, and municipal accounts from an alternative supplier while still receiving transmission and distribution service from their existing utility provider. CCAs are an attractive option for communities that want more local control over their electricity sources, more green power than is offered by the default utility, and/or lower electricity prices. By aggregating demand, communities gain leverage to negotiate better rates with competitive suppliers and choose greener power sources.

That means that current SCE customers would still receive their service via SCE (including billing) but the energy is actually provided by the CCA, in this case CPA, at one of three rates: “Lean” (which is 36% renewables and lower than SCE), “Clean” (which is 50% renewables and comparable to SCE), and “Green” (which is 100% renewables and higher than SCE).  Different cities can choose for their residents the “default” rate - for example, Arcadia chose Lean, Alhambra chose Clean, and South Pasadena chose Green - but individual consumers can override that default and pick the rate they prefer.  (You can find the present list of cities switching to CPA and their default rates here.)

However, the only portion of the bill affected is the energy charge, which is generally a smaller component than is delivery.  For example, here is a comparison for SCE customers on the Domestic rate for what they pay now compared to under the “Lean” option from CPA:

SCE Domestic vs CPA Rate

So your savings is about 10% on the first 300 or so kWh (or about $5), but if you make it into the highest tier, your savings drops to just 4.5% on the largest usage.   (Interestingly, SCE’s delivery rates changed a lot more than what is seen in this shift to CPA’s Lean rate.  In particular, the delivery charge for the lowest tier went up by 5.8% as of January 1st, and by 22% for Tier 3 - ouch!)

You can find the complete list of CPA’s rates as of this writing, here.

This Domestic rate is the easiest to review - in a subsequent post we will talk about Time-of-Use rates (relevant to recent and future solar owners) and how to make the right choice to maximize your savings.

Watch this space.

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01/03/13

  11:01:00 am, by Jim Jenal - Founder & CEO   , 439 words  
Categories: All About Solar Power, Solar Economics, Solar News, SCE, SDG&E

Who Pays for Solar Power?

We wrote before about an upcoming study from the California Public Utilities Commission (CPUC) to determine the overall cost-benefit of installing solar.  Well in advance of that study, the investor-owned utilities (IOUs) in California are coming out swinging, with populist rhetoric about solar’s unfair impact.  But just because a utility says something, doesn’t make it true!  Here’s a quick take.

solar potentialIn the closing weeks of 2012 several news stories appeared, making the case for the IOU’s POV regarding solar.  (This one from the San Francisco Chronicle is typical: Solar Power Adds to Nonusers’ Costs.)

Their theory is that because solar system owners pay according to Net Metering - whereby excess energy produced during the day is used to offset (or net out) energy usage at night or during stormy days - they are not paying their fare share of other fixed costs of the utility such as for distribution and transmission facilities.

It is certainly true that solar customers pay less for distribution and transmission systems because those costs are tied to a customer’s total usage and is not simply part of the fixed “customer charge” that all residential utility customers pay - including solar customers.  But customers did not decide the nature of the utility’s rate structure, and presumably the IOUs were happy to charge more to cover “fixed costs” based on usage.  If that is the case, then it is equally fair to receive less from a customer with a lower monthly usage.

Moreover, the “analysis” being advanced by the IOUs ignores the benefit of that net energy being provided by solar customers - since that energy largely peaks alongside the utility’s peak demand, it offsets peak production energy costs for the utility.  Such “peaker” plants provide the most expensive energy a utility produces, so reducing that demand is actually a significant benefit to the utility.

At least one countervailing analysis asserts that solar customers are providing a net benefit: Solar Power Generation in the US: Too expensive, or a bargain? That study looked at all components of solar system benefits - including impacts on transmission and distribution - and concluded that solar power customers are actually subsidizing other users, even with solar deployment as high as 30% (the current net metering cap is just 5% and California is still a long way from reaching that goal).

Make no mistake, the IOUs are coming after net metering because it is beginning to affect their bottom line - and they can predict that as costs for solar continue to fall, that enormous potential for solar energy will hurt their business model.  The solar industry is in for a fight - and it will be a fight of existential proportions.

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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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