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Because net metering is forcing the utility to purchase power at the retail rate. It doesn't make any sense. It isn't a profit margin issue. There is a massive

by eppp 4y ago

Because net metering is forcing the utility to purchase power at the retail rate. It doesn't make any sense. It isn't a profit margin issue. There is a massive infrastructure and expense to deliver wholesale power to an individual customer and it has to be recouped. Either you sell back your power at some percent of wholesale or solar installs need to get a corresponding increased delivery fee.

oso2k 4y ago
No (potential) customer is required to make any company profitable.
- eppp 4y ago
  And should a company be forced to subsidize a customer?
  - AtlasBarfed 4y ago
    When the company is a utility with a built in monopoly, with legal access to shared resources like land for transmission cables, and is the easiest path to executing policy as important as decarbonization? Yes, if it helps the implementation of the policy. Our entire power system lacks proper carbon taxation. So I won't cry over minor things like power companies making a bit less money when the effect is a major avenue to mitigating carbon emissions. Arguably incenting the grid to switch over from coal/natural gas to wind/solar/storage is more important, but lets try multiple approaches and not stop what is working.
  - oso2k 4y ago
    When said company is government subsidized said customer who is also a tax payer, yes. These companies use tax dollars for infrastructure investment and maintenance, at least here in CA.
    - maxerickson 4y ago
      Those investments theoretically benefit all of their customers. The question is whether specific customers should benefit more than others, when the activity they are doing probably adds costs for the others. The "supply" value of the electricity being generated is going to vary widely, it's not at all obvious that fixing it at the average cost of supplying residential electricity is going to benefit everyone buying the electricity (which as the volume of electricity involved becomes larger sort of becomes a requirement).
amluto 4y ago
This is all rather bizarre. If PG&E charges 30 cents/kWh for a marginal kWh delivered, then either something is quite wrong with the pricing model or it really does cost some respectable fraction of 30 cents/kWh to get a marginal kWh through their system into their distribution network where the customer is. If it's the latter, then reduction of 1 kWh delivered should save them the same amount of money. I think the real issue is that the pricing is almost completely divorced from the actual cost structure, so the whole rate system is a kludge that gives everyone the wrong incentives.
- secabeen 4y ago
  Reduction of 1kWh delivered does not save them the same amount of money because the cost of connection is dominated by the 1st kW delivered. Scaling delivered power does have some cost, but the majority of delivery is in being able to deliver power to a particular area in the first place and to the maintenance of the lines providing any power.
  - amluto 4y ago
    Yes and no. If I draw an extra 10 kWh one random hour and export 10 kWh back at some other random hour, this costs the utility essentially nothing. The transformer is already there, and other customers near me will consume it possibly without even involving the transformer. (I say “essentially” because there is some tiny loss in the system, but that’s maybe 2%, not 70%.)
    - HDThoreaun 4y ago
      Absolutely false. Wholesale electricity costs vary wildly with time of day. You’re saying the grid should be forced to act as an unlimited battery for free and that just doesn’t make sense.
- deleted 4y ago
  [deleted]
- eppp 4y ago
  The issue is that you have to size the hardware for a multiple of the power draw you expect and the cost doesn't go down because people use less temporarily. You also have to do all the vegetation management and billing and it and billing regardless of the amount of kWh that are used even if a solar install is negative. They might draw today and it has to be available.
secabeen 4y ago
What we need is a fundamental change in electricity billing. The value in a grid connection is in its reliability, availability and demand response (you can demand anything from 1 Amp to 200 Amps at any time, with no notice). The current usage-only billing model is broken. What we should do is pay a large flat monthly fee for the grid connection, then a lower rate for generation/usage, rather than bundling the delivery costs in. This is how many other utilities (Gas, Water, etc.) are billed, and it makes much more sense. This would also line up better for people with solar panels, as those who choose to leverage a grid connection would lay in line with their utility, or could choose to go off-grid, if they didn't want to pay for the availability of the grid.
- jjav 4y ago
  > What we should do is pay a large flat monthly fee for the grid connection, then a lower rate for generation/usage, rather than bundling the delivery costs in. This is the absolutely worst way to bill. It enourages wasteful use and hits very hard the poorest people who can't afford the flat fee.
- hinkley 4y ago
  I think you’re missing a different piece of the puzzle here which is that if I pay $10 for the first gallon of water and next to nothing for the next 500, I have an incentive to use more water and not less. I’ve paid for it anyway. When you’re trying to solve public policy problems especially where conservation is concerned the notion of math gets complicated very quickly.
  - secabeen 4y ago
    Perhaps, but if we want to dis-incentivize usage as a political policy, we can just increase the usage charge above from "next to nothing". For power, generation costs in California run from $150/MWh to -$150/MWh: https://www.caiso.com/TodaysOutlook/Pages/prices.aspx https://www.caiso.com/TodaysOutlook/Pages/prices.aspx $0.15/kWh seems like enough to begin the dis-incentivizing of usage, and that can certainly be pushed up more.
londons_explore 4y ago
Another option is to split the fee into a 'connection fee', 'transmission fee' and a 'power fee'. Have the power fee set realtime by a market. The price might go to zero if there is excess generation. Have the transmission fee capped by a regulator - and charge it for any kilowatt hours that enter the power network. Allow third parties to arbitrage and offer 'fixed rate' deals, so consumers aren't at the whims of an electricity market with occasional sky high prices.
- eppp 4y ago
  Congratulations you invented Enron.
  - deleted 4y ago
    [deleted]
- sandos 4y ago
  This is sort of how it works in Sweden and probably a few other countries. Bill is split into market and (local) grid parts. Many consumers have now moved the market parts to realtime pricing, since fixed-price arbitraging has become so expensive.
- Ekaros 4y ago
  Finland uses this model. Though the capping of transmission fees is bit iffy. And lately the fixed rates have been quite variable going from 4 cents to 40 cents. The action by European countries caused some uncertainty. So timing has great effect.
yupyup54133 4y ago
What we need is a nationalism of the electricity grid and power plants. A federally owned and operated electric grid solves this issue.
francisofascii 4y ago
You have valid points. But it does make sense if you are trying to 1) incentive solar and 2) keep the pricing super simple for the average Joe customer.
AtlasBarfed 4y ago
We need something that will incent home solar + storage because: 1) it increases resilience in disaster scenarios and a lot of high usage scenarios. I especially think back to Puerto Rico getting hit by the Hurricane, or the Texas icestorms or things like that. Having a lot of homes semi-independent of the grid would help people mitigate impacts, because you can rely on neighbors for certain things while the grid is down. 2) BEVs are going to introduce a huge additional burden on the grid. But if we couple it with a lot of home solar installations, it will reduce the impact to the grid and the grid can focus on more industrial tasks like highway supercharging for semis and those big challenges. 3) aside from the solar panels, home solar means a distributed storage for the grid too. Net metering is flawed, but there's the baby with the bathwater argument. Let's introduce better incentives before chucking the flawed ones that are working, and I don't see that happening. And it's hard to price the incentives. Home solar panels are going to change a lot with forthcoming perovskites, and home storage is going to drastically change with production Sodium Ion, high density LFP/LFMP in the next few years, and Sulfur beyond that. What I think is ridiculous is the pricing of home solar+storage versus what the grid buyers get. If home solar programs could have their panels bulk-purchased along with grid solar purchases and then the grid providers have to get them installed to homes, it would swap the grid providers from opposing home solar to being incented to finding people to allow the installation.
g42gregory 4y ago
PG&E is a designated as a Utility by law. This means that their profit margin is fixed (at 9? percent). Basically this is the discount they should buy the power from you, which should be fine.
caseysoftware 4y ago
> Because net metering is forcing the utility to purchase power at the retail rate. No, it doesn't. I have solar+battery with net metering. I buy from the electric company at ~11.5c/kWh and sell our excess to them at ~2.7c/kWh for a difference of ~4.3x As the sole entity that you can sell to - short of regulators being involved - they set the rate. And yes, there's already a monthly connection fee.
- HDThoreaun 4y ago
  You don’t have net metering
- ok_dad 4y ago
  That is not "net" metering, then. "Net" metering is having an import and an export accumulator meter and charging the customer for the "net" value in the equation "net = import - export". Anything else is marketing bullshit from utility industry organizations.
  - caseysoftware 4y ago
    That's what I thought "net metering" was before getting solar too. Most don't do that. Unfortunately, billing departments run the world.
    - maxerickson 4y ago
      The term is sort of self defining. Of course it's not surprising that some people just ignore that it means something specific as a phrase. In my state, they don't try to call different rates for demand and generation "net metering": https://aurorasolar.com/blog/what-to-know-about-dtes-net-metering-replacement-in-michigan/ https://aurorasolar.com/blog/what-to-know-about-dtes-net-met... https://www.michigan.gov/mpsc/consumer/electricity/distributed-generation https://www.michigan.gov/mpsc/consumer/electricity/distribut...
    - ok_dad 4y ago
      That is supposed to be what net metering is, but electric utilities captured the regulators and changed the definition to ensure they could cheat the consumer out of the value of their bought and paid for solar panels.

by eppp 4y ago

oso2k 4y ago

No (potential) customer is required to make any company profitable.

eppp 4y ago
And should a company be forced to subsidize a customer?
- AtlasBarfed 4y ago
  When the company is a utility with a built in monopoly, with legal access to shared resources like land for transmission cables, and is the easiest path to executing policy as important as decarbonization? Yes, if it helps the implementation of the policy. Our entire power system lacks proper carbon taxation. So I won't cry over minor things like power companies making a bit less money when the effect is a major avenue to mitigating carbon emissions. Arguably incenting the grid to switch over from coal/natural gas to wind/solar/storage is more important, but lets try multiple approaches and not stop what is working.
- oso2k 4y ago
  When said company is government subsidized said customer who is also a tax payer, yes. These companies use tax dollars for infrastructure investment and maintenance, at least here in CA.
  - maxerickson 4y ago
    Those investments theoretically benefit all of their customers. The question is whether specific customers should benefit more than others, when the activity they are doing probably adds costs for the others. The "supply" value of the electricity being generated is going to vary widely, it's not at all obvious that fixing it at the average cost of supplying residential electricity is going to benefit everyone buying the electricity (which as the volume of electricity involved becomes larger sort of becomes a requirement).

amluto 4y ago

This is all rather bizarre. If PG&E charges 30 cents/kWh for a marginal kWh delivered, then either something is quite wrong with the pricing model or it really does cost some respectable fraction of 30 cents/kWh to get a marginal kWh through their system into their distribution network where the customer is. If it's the latter, then reduction of 1 kWh delivered should save them the same amount of money. I think the real issue is that the pricing is almost completely divorced from the actual cost structure, so the whole rate system is a kludge that gives everyone the wrong incentives.

secabeen 4y ago
Reduction of 1kWh delivered does not save them the same amount of money because the cost of connection is dominated by the 1st kW delivered. Scaling delivered power does have some cost, but the majority of delivery is in being able to deliver power to a particular area in the first place and to the maintenance of the lines providing any power.
- amluto 4y ago
  Yes and no. If I draw an extra 10 kWh one random hour and export 10 kWh back at some other random hour, this costs the utility essentially nothing. The transformer is already there, and other customers near me will consume it possibly without even involving the transformer. (I say “essentially” because there is some tiny loss in the system, but that’s maybe 2%, not 70%.)
  - HDThoreaun 4y ago
    Absolutely false. Wholesale electricity costs vary wildly with time of day. You’re saying the grid should be forced to act as an unlimited battery for free and that just doesn’t make sense.
deleted 4y ago
[deleted]
eppp 4y ago
The issue is that you have to size the hardware for a multiple of the power draw you expect and the cost doesn't go down because people use less temporarily. You also have to do all the vegetation management and billing and it and billing regardless of the amount of kWh that are used even if a solar install is negative. They might draw today and it has to be available.

secabeen 4y ago

What we need is a fundamental change in electricity billing. The value in a grid connection is in its reliability, availability and demand response (you can demand anything from 1 Amp to 200 Amps at any time, with no notice). The current usage-only billing model is broken. What we should do is pay a large flat monthly fee for the grid connection, then a lower rate for generation/usage, rather than bundling the delivery costs in. This is how many other utilities (Gas, Water, etc.) are billed, and it makes much more sense. This would also line up better for people with solar panels, as those who choose to leverage a grid connection would lay in line with their utility, or could choose to go off-grid, if they didn't want to pay for the availability of the grid.

jjav 4y ago
> What we should do is pay a large flat monthly fee for the grid connection, then a lower rate for generation/usage, rather than bundling the delivery costs in. This is the absolutely worst way to bill. It enourages wasteful use and hits very hard the poorest people who can't afford the flat fee.
hinkley 4y ago
I think you’re missing a different piece of the puzzle here which is that if I pay $10 for the first gallon of water and next to nothing for the next 500, I have an incentive to use more water and not less. I’ve paid for it anyway. When you’re trying to solve public policy problems especially where conservation is concerned the notion of math gets complicated very quickly.
- secabeen 4y ago
  Perhaps, but if we want to dis-incentivize usage as a political policy, we can just increase the usage charge above from "next to nothing". For power, generation costs in California run from $150/MWh to -$150/MWh: https://www.caiso.com/TodaysOutlook/Pages/prices.aspx https://www.caiso.com/TodaysOutlook/Pages/prices.aspx $0.15/kWh seems like enough to begin the dis-incentivizing of usage, and that can certainly be pushed up more.

londons_explore 4y ago

Another option is to split the fee into a 'connection fee', 'transmission fee' and a 'power fee'. Have the power fee set realtime by a market. The price might go to zero if there is excess generation. Have the transmission fee capped by a regulator - and charge it for any kilowatt hours that enter the power network. Allow third parties to arbitrage and offer 'fixed rate' deals, so consumers aren't at the whims of an electricity market with occasional sky high prices.

eppp 4y ago
Congratulations you invented Enron.
- deleted 4y ago
  [deleted]
sandos 4y ago
This is sort of how it works in Sweden and probably a few other countries. Bill is split into market and (local) grid parts. Many consumers have now moved the market parts to realtime pricing, since fixed-price arbitraging has become so expensive.
Ekaros 4y ago
Finland uses this model. Though the capping of transmission fees is bit iffy. And lately the fixed rates have been quite variable going from 4 cents to 40 cents. The action by European countries caused some uncertainty. So timing has great effect.

yupyup54133 4y ago

What we need is a nationalism of the electricity grid and power plants. A federally owned and operated electric grid solves this issue.

francisofascii 4y ago

You have valid points. But it does make sense if you are trying to 1) incentive solar and 2) keep the pricing super simple for the average Joe customer.

AtlasBarfed 4y ago

We need something that will incent home solar + storage because: 1) it increases resilience in disaster scenarios and a lot of high usage scenarios. I especially think back to Puerto Rico getting hit by the Hurricane, or the Texas icestorms or things like that. Having a lot of homes semi-independent of the grid would help people mitigate impacts, because you can rely on neighbors for certain things while the grid is down. 2) BEVs are going to introduce a huge additional burden on the grid. But if we couple it with a lot of home solar installations, it will reduce the impact to the grid and the grid can focus on more industrial tasks like highway supercharging for semis and those big challenges. 3) aside from the solar panels, home solar means a distributed storage for the grid too. Net metering is flawed, but there's the baby with the bathwater argument. Let's introduce better incentives before chucking the flawed ones that are working, and I don't see that happening. And it's hard to price the incentives. Home solar panels are going to change a lot with forthcoming perovskites, and home storage is going to drastically change with production Sodium Ion, high density LFP/LFMP in the next few years, and Sulfur beyond that. What I think is ridiculous is the pricing of home solar+storage versus what the grid buyers get. If home solar programs could have their panels bulk-purchased along with grid solar purchases and then the grid providers have to get them installed to homes, it would swap the grid providers from opposing home solar to being incented to finding people to allow the installation.

g42gregory 4y ago

PG&E is a designated as a Utility by law. This means that their profit margin is fixed (at 9? percent). Basically this is the discount they should buy the power from you, which should be fine.

caseysoftware 4y ago

> Because net metering is forcing the utility to purchase power at the retail rate. No, it doesn't. I have solar+battery with net metering. I buy from the electric company at ~11.5c/kWh and sell our excess to them at ~2.7c/kWh for a difference of ~4.3x As the sole entity that you can sell to - short of regulators being involved - they set the rate. And yes, there's already a monthly connection fee.

HDThoreaun 4y ago
You don’t have net metering
ok_dad 4y ago
That is not "net" metering, then. "Net" metering is having an import and an export accumulator meter and charging the customer for the "net" value in the equation "net = import - export". Anything else is marketing bullshit from utility industry organizations.
- caseysoftware 4y ago
  That's what I thought "net metering" was before getting solar too. Most don't do that. Unfortunately, billing departments run the world.
  - maxerickson 4y ago
    The term is sort of self defining. Of course it's not surprising that some people just ignore that it means something specific as a phrase. In my state, they don't try to call different rates for demand and generation "net metering": https://aurorasolar.com/blog/what-to-know-about-dtes-net-metering-replacement-in-michigan/ https://aurorasolar.com/blog/what-to-know-about-dtes-net-met... https://www.michigan.gov/mpsc/consumer/electricity/distributed-generation https://www.michigan.gov/mpsc/consumer/electricity/distribut...
  - ok_dad 4y ago
    That is supposed to be what net metering is, but electric utilities captured the regulators and changed the definition to ensure they could cheat the consumer out of the value of their bought and paid for solar panels.