This is scary, and I think the Utility commision is listening

solar_dave

Ugh the power company is after a rate restructure:

The problem is that the current rate structure, which has been in place since the early 1900s, was created long before energy conservation became an important national priority. It is a relic of the days when electric utilities operated appliance stores and advertised the benefits of using more electricity. The solution is a mechanism called “decoupling.”

With decoupling, we are proposing to give up the ability to earn more revenue when individual energy consumption increases. In return, we are asking the ACC to make sure we are not punished financially when our energy efficiency programs work. Ultimately, that would jeopardize our ability to maintain the electricity system. Without this change, Arizona will not be able to achieve its goals for energy efficiency.

Sounds like they are going to raise the off-peak rates substantially. The reduction in on-peak to off-peak ratio could raise that off peak rate a lot.The proposal also has a 4.0% rate increase built in as far as I can tell for on peak but the ratio change on the off peak is going after the solar customers. Along with a rate increase for fixed costs as well. Here are some specifics:

Q. WHAT CHANGES IS THE COMPANY PROPOSING FOR THE
EXISTING RESIDENTIAL DEMAND RESPONSE RATES?
A. APS is proposing to increase Rate Schedules ECT-2, ECT-1R, ET-2, ET-1, and
ET-SP by approximately 4.0%. The Company also proposes to modestly reduce
the ratio of peak to off-peak prices in Rate Schedules ET-1 and ET-2 to better
reflect the current cost differences in on-peak and off-peak periods. For example,
currently for Rate Schedule ET-2, the on-peak price in the summer months is 4.0
times the off-peak price, while the proposed on-peak summer price is 3.0 times
the off-peak price. Likewise for Rate Schedule ET-1, the on-peak summer price
is being reduced from 3.0 times to 2.5 times the off-peak price.

This proposed pricing structure will still have a higher ratio of on-peak to off peak
prices compared with current generation power costs. For example, current
projections of on-peak wholesale prices in the APS region are typically only
about 1.6 times the off-peak prices for the third quarter 2011, which represents
core summer months. While the wholesale pricing structure has more on-peak
hours than APS’s time-of-use rates, the comparative price ratio for wholesale
market prices is nevertheless still likely to be below APS’s proposed time-of-use
price ratios. Even so, APS proposes this price structure to maintain an aggressive
price signal to incent customers to shift usage to the off-peak hours.
In addition, the basic service charge will be increased consistent with cost of
service for unbundled revenue cycle services such as metering and billing. The
proposed basic service charge also includes a portion of the customer’s
distribution transformer cost to provide better cost recovery and reflects the lower
meter reading costs due to the continued roll out of Advanced Metering
Infrastructure (“AMI”) metering technology.

Q. HOW MUCH DOES THE COMPANY PROPOSE TO INCREASE THE
BASIC SERVICE CHARGE FOR RESIDENTIAL RATES?
A. The current bundled basic service charge for residential customers varies by rate
schedule from $0.285 to $0.556 per day, which on average is about $8.67 per
month for rate E-12 and $16.91 per month for the other residential rates. APS
proposes to increase the bundled basic service charge for rate E-12 to $0.390 per
day and $0.579 for the other residential rates. This results in average monthly
basic service charges of $11.86 and $17.61 respectively.

Q. HAS THE INCREASED USAGE OF AMI METERS IMPACTED ANY OF
THE BASIC SERVICE CHARGE COSTS?
A. Yes. The increased use of AMI has significantly reduced the cost of meter
reading over the last few years. As a result, the Company is proposing to reduce
the daily unbundled charge for meter reading from $0.062 for residential
customers and $0.068 for general service customers to $0.038 for all customers.
That’s an average savings of over 40% for this charge.

It is looking like they want to drive more customers onto the ET2 rates which are on-peak noon to 7PM Mon-Fri. The on peak rates there are like 30% higher than the ET1 rates. The proposal states the ET1, rate which is grandfathered (mine), is still in effect but would have an end of life date to be determined with a later proposal. Sooner rather than later I bet.

The decoupling will raise my fixed costs by about 20% actually if I read that right. This certainly sounds a lot like the California plans to squeeze more out of solar producers. It is interesting that they use ratio reduction to sound like a rate reduction but you know that can't be the case, it is a way to raise the off peak rates.

BB.

Re: This is scary, and I think the Utility commision is listening

The old problem of government agencies basing their models on static scoring vs the market reaction which is dynamic (i.e., static scoring assumes changes in pricing/rules does not affect overall demand).

We are going through this now with our garbage rates... Originally, we had one garbage can and a single truck with 2-3 guys to pick the cans (on trip down street).

Today, we have three cans, automated trucks (arm picks up can) that now make 6 trips in front of each home to make pickups (left then right side of street for picks).

Now we have a 35 gallon "trash can", and a pair of ~95 gallon yard waste and recycle cans. And we can put dirty paper (pizza boxes, etc.) in the yard waste can...

We are charged only for garbage cans. Price went up for the 35 gallon can--so people are recycling (a good thing, but no charges for recycling pickup) and now going to 20 gallon garbage cans to reduce the higher charges (again, bill is based only on cost of garbage can).

And now we have the garbage company increasing rates even more because so many (unplanned change in usage) people are going to smaller and smaller garbage cans.

So--instead of an incentive to cut waste (i.e., reduce wasteful packaging by stores). Because recycling if free (not billed) and garbage is charged--all that has happened is the people are reducing their costs and the company is losing money.

At some point, they are going to have to charge for each can picked up an for recycling processing costs...

And that is what APS is now doing... It cost them the same to bill and account and maintain the lines and transformers to your home whether you buy $10 worth of power or $200 worth of power per month.

Since the price of power (at least in N. California) is about 1/2 distribution and the other 1/2 is cost of generation--They are just reflecting where their costs are.

I would expect a home/business buying 10x as much power should get a discount on the $/kWH power price...

Not, what has happened in California where heavy power users pay ~2-3x as much or their kWHours...

Will this hurt those of us with Grid Tied solar and very little overall power usage (my bill is $6 per month with 0 kWH per month used)? I probably cost the power company $50 per month to provide power to my home (assuming $100 per month average power bill).

-Bill

solar_dave

Re: This is scary, and I think the Utility commision is listening

I would tend to agree except APS can sell my excess to my neighbor for up to $0.254 per kWh (on peak ET2) while only paying me $0.065 for that generation. They have virtually no transmission costs or generation costs. The electrons hit my transformer and head right in to the neighbors house. That is a 300% margin.

I still "buy" off peak from them, mostly paid out of my $0.065 credit but they made money for sure.

drees

Re: This is scary, and I think the Utility commision is listening

SDG&E appears to be looking at changing their rate structure significantly as well.

http://www.sdge.com/documents/billinserts/regulatory/2011_Oct-GRC.pdf

It looks like they are considering removing the minimum $0.17 daily fee and replacing it with a flat $3/mo fee in addition to a "network use charge". I'm guessing that this another name for a demand service charge that you typically see on commercial installs.

How they will determine what your "network usage" is remains to be seen, but this change is very likely to significantly affect PV customers who's system offsets most of their usage.

I might expect that this type of billing change would encourage PV users to install battery storage systems to store excess solar energy during the day and use that energy to minimize demand charges.

It would also discourage residential PV adoption.

Wilis

Re: This is scary, and I think the Utility commision is listening

In my location in TN I receive my grid power from the "Volunteer Energy Cooperative." They are not to make a profit, just pay for expenses. What I see happening is they are increasing the “Customer Charge.” Last months total bill was $42.00. The break down is: $11.71 customer charge, Electric for 309 KW @ .069770, TVA fuel cost @.025270 both total up to $29.37 and total bill was $41.08. Oh and because I didn’t say no I have a vecustomers share of $.92 to help with others bill and to be given away to different organizations.
This seems like a manageable bill but I have spent money to produce solar electric and to be as efficient as possible. The customer charge is going up faster then electric rates and the lower my bill is the greater % of my bill is the customer charge. If the customer charge becomes to large a part of my bill, I will think about using other types of energy to heat water ( like solar) and rethink my AC needs in the summer.
TVA electricity is also paid for with government help. I haven’t look into the whole story but I think some of the funds to run TVA comes from the Federal Government, so taxpayers every where are helping me with my electric also. If grid power wasn’t so easy I would have disconnected long ago.

Cariboocoot

Re: This is scary, and I think the Utility commision is listening

Utilities have discovered that conservation eats into the profits, so charging by the kWh alone isn't good enough. You will see increasing fees of all sorts to make certain their income is maintained in spite of diminishing usage. They view GT systems more as a conservation method than viable generation (what they actually refer to it as we can't print on a family forum). They have expensive infrastructure in place, and it needs updating. Somehow it has to be paid for. Expect more of this re-structuring of billing plans in future.

BTW, if you're wondering about the low price for GT power delivered during peak usage, as far as the grid is concerned generation or usage at that time are both considered "heavy traffic" which the infrastructure has difficulty handling. They don't really care where the power is coming from or going to: it's the sheer volume of electricity being moved that causes the trouble.

That's all going to sound really weird to those who deal with "localized" systems.

drees

Re: This is scary, and I think the Utility commision is listening

Cariboocoot wrote: »

BTW, if you're wondering about the low price for GT power delivered during peak usage, as far as the grid is concerned generation or usage at that time are both considered "heavy traffic" which the infrastructure has difficulty handling. They don't really care where the power is coming from or going to: it's the sheer volume of electricity being moved that causes the trouble.

That's all going to sound really weird to those who deal with "localized" systems.

Yeah it sounds weird. Distributed generation reduces traffic, it doesn't increase it.

Based on my typical usage, I estimate that my PV system probably generates enough power during the day to power at least a handful of houses as long as I'm not running the dryer, AC or charging my car. That power is reducing load on the grid!

solar_dave

Re: This is scary, and I think the Utility commision is listening

drees wrote: »

Yeah it sounds weird. Distributed generation reduces traffic, it doesn't increase it.

Based on my typical usage, I estimate that my PV system probably generates enough power during the day to power at least a handful of houses as long as I'm not running the dryer, AC or charging my car. That power is reducing load on the grid!

Yeah and in my case the profit mightily off the generation I push into the grid. Yesterday it was over 30 kWh on peak excess. With no transmission costs and virtually no infrastructure.

Cariboocoot

Re: This is scary, and I think the Utility commision is listening

drees wrote: »

Yeah it sounds weird. Distributed generation reduces traffic, it doesn't increase it.

Based on my typical usage, I estimate that my PV system probably generates enough power during the day to power at least a handful of houses as long as I'm not running the dryer, AC or charging my car. That power is reducing load on the grid!

There are companies out there that would like to limit your production to net zero so they don't have to buy any power from you are deal with the intricacies of having to allocate and distribute it.

Did I ever mention the proposed smart meter plan to limit consumption to a fixed number of kWhs per day? Lots of scary ideas coming to a utility meter near you!

solar_dave

Re: This is scary, and I think the Utility commision is listening

Cariboocoot wrote: »

There are companies out there that would like to limit your production to net zero so they don't have to buy any power from you are deal with the intricacies of having to allocate and distribute it.

Did I ever mention the proposed smart meter plan to limit consumption to a fixed number of kWhs per day? Lots of scary ideas coming to a utility meter near you!

Have you actually seen one of these proposals some place? I can't believe anyone would stand for it?

Just the limit per day could be a huge impactor in Az. That would drive me to research some damn large batteries. I refuse to lower my lifestyle or standard of living. Now add two plug in cars to the mix. Do the right things to get fixed costs and someone will stomp on you.

This whole change smack of California type rate systems.