Just got a $1 electric bill

Yaryman,

I too have PG&E and they have raised the minimum electric charge to $10 now. And they have discontinued the (very nice for solar folks) plan--And I have to choose one of the less good ones (peak rates to near ~8-9pm at night--not much sun here).

The tiered rate (the more power you use, the higher PG&E charges per kWattHour) is a left over from the energy crisis of the 1970's.

http://www.presidency.ucsb.edu/ws/?pid=7373

7. Utility rate reform (legislative): Conventional utility pricing policies discourage conservation. The smallest users commonly pay the highest per unit price due to practices such as declining block rates. Rates often do not reflect the costs imposed on society by the actions of utility consumers. The result is waste and inequity. The President will therefore submit legislation which contains the following provisions: --State public utility commissions must require their regulated electric utilities to phase out and eliminate promotional, declining, and other rates for electricity that do not reflect cost incidence. --To shift energy use from peak to nonpeak periods, electric utilities would be required to offer daily off-peak rates to each customer who is willing to pay metering costs and to offer lower rates to customers willing to have their power interrupted at times of highest peak demand. --Master metering for electricity would generally be prohibited in new structures. --State public utility commissions would require gas utilities to eliminate declining block rates and to implement such rules as FPC may prescribe with respect to master metering, summer-winter rate differentials, and interruptible rates. --By amendment to the Federal Power Act, the Federal Power Commission would be authorized to require interconnection and power pooling between utilities even if they are not presently under FPC jurisdiction, and to require "wheeling" (the transmission of power between two non-contiguous utilities across a third utility's system).

So--being in California, "we" have kept the punitive rates for those that use "too much power".

It is sort of like going to Costco and paying 2x more for items in bulk vs buying at the local market. It does not make sense from a pure economics point of view.

However--There are reasons why the present Net Metering plan for Solar Power does not make a lot of sense for the accounts at utilities.

More or less (very roughly), ~1/2 of your power bill goes to buying power from the electric generator station, and the other 1/2 goes to paying for distribution (power poles, transformers, trucks and labor, rent for land used by the utility, billing costs, customer service, etc.). And (again very roughly), the cost for generator power is ~1/2 for the generator station, and the other ~1/2 goes for paying for fuel (coal, oil, natural gas, etc.).

For a utility customer that uses lots of power during peak times (such as A/C and water pumping in the California Central Valley)--The utility has to "size" the generator stations and distribution lines to carry the maximum demand of the customers/region. If the "valley" only uses peak power for 6 months of the year, then the rest of the time, the utility has "excess capacity" that still needs to be paid for. Peaker power plants that are shut down for the season, etc. (peaker plants tend to be much more expensive per kWH vs "base load" plants like coal and nuclear).

You can click on the California Independent System Operator website and see the 24 hour forecast of power usage (something like 85% of the electric power in the state). Right now (near spring), there is not a large difference between early morning and evening power usage. During the summer time--The difference between minimum load and peak loads are much higher.

In the old days, the utility would advertise people to get washers and dryers... They were typically operated "off peak" and helped increase power usage during lower power usage times.

Today, they are trying to get to "real time pricing"--The last plan I saw the utility would give you a 24 hour "contract" (or forecast) of your $/kWH price. And the customer could decide to run the washer, A/C, electric oven, electric water heater the next day (and what time) or not.

While I certainly understand the "accounting problem" of Grid Tied Solar customers buying and selling back power to the utility at "retail rates". I am not in favor of real-time pricing either. We sort of had that with California's "electric deregulation" back in the early 2000's which darn near bankrupted our major electric utilities--And made huge amounts of money for Enron, Los Angeles Water and Power, etc... And left us with something like a $25 Billion Bond to pay for those "extortionary power rates" that the state of California stuck us with (not really a "free market"--Just a screwed up regulatory scheme).

I cannot give you an exact answer if folks in the Valley are subsidizing those of us on the coast (don't use A/C, use natural gas for cooking/heating). I do agree with you that the tiered rate plan with ever increasing charges for "high to excessive" power usage (some regulatory folks decide what is "excessive" power usage) is probably not fair.

However, there are definitely costs for those folks that use a variable amount of power (over the day, and between seasons) that need to be accounted for. And why some folks (farmers, firms that use large amounts of electricity seasonal) still use co-generation systems, and use off grid power systems (diesel and natural gas fired generators, etc.).

However, in California--Fixed diesel generators (and off road vehicles, forklifts, etc.) are now being hit with pollution control requirements (and, remember, to the government CO2 is a "pollutant")--And getting approvals for these gensets is getting harder and harder (and the state is making parts companies report when people by spare parts for this equipment so they can "talk to folks" later about their "pollution profile" and permits, if any--I guess).

-Bill