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I wonder if the economics are distorted here. It looks like there is 0 demand during the day, but people are obviously using electricity during the day. Shoul

I wonder if the economics are distorted here. It looks like there is 0 demand during the day, but people are obviously using electricity during the day. Should we not make electricity actually free at the hours when there is too much of it, to encourage its use? This seems like the best way to encourage battery installation and electric car usage, without requiring every house to get solar panels. The downside, I suppose, is that electric utilities are for-profit companies whose shareholders need a return. Thus it's hard to property subsidize. The power lines to your house cost money to maintain regardless of how much electricity is flowing through them. (Something I hate in general is this kind of usage-based billing that subsidizes fixed costs. You should pay a fixed fee to be on the grid, and then per-kWh for usage. But people hate being billed for things they don't use, so we try to combine to costs of the infrastructure with the cost of the incremental usage. It's really just a crazy security that should be in the domain of banks and not ordinary consumers, but it's also so normal and widespread we think nothing of it.)

konschubert 3y ago
Yes, grid fees should be a flat payment based on your max power draw in the last year. Or maybe a time dependent fee that reflects current power grid congestion. Certainly not something that simply scales with the energy consumed.
- Analemma_ 3y ago
  Most utilities, including I assume California's, do have a flat component of the total bill to cover operational expenses like salaries, the fixed cost of infrastructure, hedging against huge spot price spikes, etc. In my case (Pacific Northwest), this amounts to about one-sixth of my total bill. But having 100% of your bill be a flat fee would just be crazy: there'd be no incentive to conserve energy and "based on max power draw" would encourage people to use 100% of their possible consumption all the time.
  - konschubert 3y ago
    You misunderstood me. The GRID FEES should be flat. They are just one component of the price that is charged by the utility, and currently they are charged per kWh consumed. The POWER PRICE should of course scale with the kWh that are being consumed - either as a fixed price, or better with a component that depends on the time of the day or the actual market price.
    - ThatPlayer 3y ago
      Part of the grid is scaling with power usage, so I think it makes sense that someone who uses more power has to pay more for grid upgrades/maintenance.
      - konschubert 3y ago
        Grid is scaling with max power draw at times of congestion. Congestion is heavily correlated across consumers, so you cannot prevent it by charging higher marginal power costs. (Like mobile carriers do with data)
        ThatPlayer 3y ago
        Isn't that the same idea as charging more at certain times of the day? We can bake grid fees into those peak hours. Then if there is equal usage between all consumers like you say, then everyone would get charged equally for the grid . Functionally the same as a fixed price.
  - Rebelgecko 3y ago
    FWIW I'm in California and my bill is totally based on usage (although not linearly). However in a few years the state is moving towards adding an income-based fee
    - aidenn0 3y ago
      I'm on SCE in California and I pay about $0.73 per day in "Basic Charges" (about $23/mo) if I use zero power. There are also grid-related charges (including a wildfire fund charge) that are usage-based on the order of $0.03/kWh. For my usage (about 1MWh per month) that means half the grid charges are flat and half are from usage. For comparison, my TOU energy rates range from $0.06 to $0.25 per kWh depending on the season and time of day.
- Scoundreller 3y ago
  Larger consumers usually do pay demand charges. In the UK, they had some method to charge based on a retrospective look of when the grid had the largest demand and your contribution to it, so some firms were set up to help you predict this and reduce your usage at those points. > The UK’s demand charge price is based on its ‘Triad’ system. ‘Triads’ are three, half-hour periods in the UK winter when energy demand is at its highest. > The Triad dates must be at least ten days apart. They typically fall on weekdays, between 4 pm-7 pm, November to February and during periods of cold weather. The National Grid often has to fire up expensive coal and gas-powered stations to meet industrial and domestic demand during these windows. https://www.greenoptimistic.com/how-to-reduce-commercial-electricity-demand-charges-20200910/?amp https://www.greenoptimistic.com/how-to-reduce-commercial-ele... This all makes sense for larger users but the costs of smartmetering on light users has been a bit of a farce in Ontario Canada where the costs were real and the load shifting was not.
ZeroGravitas 3y ago
The Duck Curve is from the point of view of the utility so it not only removes rooftop solar, it goes further and removes utility owned renewables, to focus on the problem of a) turning off fossil production at points during the day and b) dealing with the ramp in fossil demand in the evening.
trog 3y ago
> I wonder if the economics are distorted here. It looks like there is 0 demand during the day, but people are obviously using electricity during the day. Should we not make electricity actually free at the hours when there is too much of it, to encourage its use? In my state (Queensland, Australia) demand is actually negative during peak production hours on many days. The wholesale price actually goes negative during these times - that is, if you are a wholesale consumer, you can get paid for using energy. Individual households can opt to go on to wholesale plans - my uncle does it (in Sydney, much further south) as he has way too much solar and battery capacity for his household to use. Been a whole since I spoke to him but I know he had a couple days where he made $20. (He is a retired nerd and spends a lot of time optimising usage patterns to maximise money.) This kind of thing will become way more common, especially as automation gets better and storage becomes more prevalent.

konschubert 3y ago

Yes, grid fees should be a flat payment based on your max power draw in the last year. Or maybe a time dependent fee that reflects current power grid congestion. Certainly not something that simply scales with the energy consumed.

Analemma_ 3y ago
Most utilities, including I assume California's, do have a flat component of the total bill to cover operational expenses like salaries, the fixed cost of infrastructure, hedging against huge spot price spikes, etc. In my case (Pacific Northwest), this amounts to about one-sixth of my total bill. But having 100% of your bill be a flat fee would just be crazy: there'd be no incentive to conserve energy and "based on max power draw" would encourage people to use 100% of their possible consumption all the time.
- konschubert 3y ago
  You misunderstood me. The GRID FEES should be flat. They are just one component of the price that is charged by the utility, and currently they are charged per kWh consumed. The POWER PRICE should of course scale with the kWh that are being consumed - either as a fixed price, or better with a component that depends on the time of the day or the actual market price.
  - ThatPlayer 3y ago
    Part of the grid is scaling with power usage, so I think it makes sense that someone who uses more power has to pay more for grid upgrades/maintenance.
    - konschubert 3y ago
      Grid is scaling with max power draw at times of congestion. Congestion is heavily correlated across consumers, so you cannot prevent it by charging higher marginal power costs. (Like mobile carriers do with data)
      - ThatPlayer 3y ago
        Isn't that the same idea as charging more at certain times of the day? We can bake grid fees into those peak hours. Then if there is equal usage between all consumers like you say, then everyone would get charged equally for the grid . Functionally the same as a fixed price.
- Rebelgecko 3y ago
  FWIW I'm in California and my bill is totally based on usage (although not linearly). However in a few years the state is moving towards adding an income-based fee
  - aidenn0 3y ago
    I'm on SCE in California and I pay about $0.73 per day in "Basic Charges" (about $23/mo) if I use zero power. There are also grid-related charges (including a wildfire fund charge) that are usage-based on the order of $0.03/kWh. For my usage (about 1MWh per month) that means half the grid charges are flat and half are from usage. For comparison, my TOU energy rates range from $0.06 to $0.25 per kWh depending on the season and time of day.
Scoundreller 3y ago
Larger consumers usually do pay demand charges. In the UK, they had some method to charge based on a retrospective look of when the grid had the largest demand and your contribution to it, so some firms were set up to help you predict this and reduce your usage at those points. > The UK’s demand charge price is based on its ‘Triad’ system. ‘Triads’ are three, half-hour periods in the UK winter when energy demand is at its highest. > The Triad dates must be at least ten days apart. They typically fall on weekdays, between 4 pm-7 pm, November to February and during periods of cold weather. The National Grid often has to fire up expensive coal and gas-powered stations to meet industrial and domestic demand during these windows. https://www.greenoptimistic.com/how-to-reduce-commercial-electricity-demand-charges-20200910/?amp https://www.greenoptimistic.com/how-to-reduce-commercial-ele... This all makes sense for larger users but the costs of smartmetering on light users has been a bit of a farce in Ontario Canada where the costs were real and the load shifting was not.

ZeroGravitas 3y ago

The Duck Curve is from the point of view of the utility so it not only removes rooftop solar, it goes further and removes utility owned renewables, to focus on the problem of a) turning off fossil production at points during the day and b) dealing with the ramp in fossil demand in the evening.

trog 3y ago

> I wonder if the economics are distorted here. It looks like there is 0 demand during the day, but people are obviously using electricity during the day. Should we not make electricity actually free at the hours when there is too much of it, to encourage its use? In my state (Queensland, Australia) demand is actually negative during peak production hours on many days. The wholesale price actually goes negative during these times - that is, if you are a wholesale consumer, you can get paid for using energy. Individual households can opt to go on to wholesale plans - my uncle does it (in Sydney, much further south) as he has way too much solar and battery capacity for his household to use. Been a whole since I spoke to him but I know he had a couple days where he made $20. (He is a retired nerd and spends a lot of time optimising usage patterns to maximise money.) This kind of thing will become way more common, especially as automation gets better and storage becomes more prevalent.