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Power The Almighty Buck

Electric Company Wants Monthly Fee For Solar Users 367

7-Vodka writes "Xcel Energy customers who have their own solar panels are worried about a new fee being proposed by the company. A monthly fee to pay for transmission and distribution of energy would be charged to customers who have solar panels, irrespective of their energy use for the month. An Xcel Energy spokesman said the fee is to ensure that regular customers don't subsidize the 'connectivity fees' for the solar panel customers who don't pay when they generate as much as they use. When pressed, the spokesman admitted that nobody actually pays a 'connectivity fee,' yet they wanted to prevent the mooching from occurring in the future (presumably when they hit everyone with such a fee). He also called the absence of a connectivity fee for solar customers a 'double subsidy' because many solar customers receive rebates to install the panels."
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Electric Company Wants Monthly Fee For Solar Users

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  • by Sponge Bath ( 413667 ) on Saturday August 01, 2009 @10:30AM (#28908563)

    Many electric providers charge a base "connection" fee to all customers to cover the costs of maintaining the connection, billing, etc. Power is charged on top of that. Nothing in the article says it will only be charged to customers with solar panels, so I assume this is just following what other providers already do.

  • by Anonymous Coward on Saturday August 01, 2009 @10:31AM (#28908569)

    Basically it's an infrastructure fee. While they may not be using the grid's energy, it still costs money to maintain that grid. So the logic is that if they are hooked up to the grid, they should pay a maintenance fee.

  • by Anonymous Coward on Saturday August 01, 2009 @10:43AM (#28908661)

    Don't be suckered by the industry PR flacks' language. Many states have laws requiring them to pay people who _generate_ electricity. It is bad enough that want it for free, now they want to get paid for it, too. People generating their own power help reduce power line transmission problems and reduce peak-load problems. It is just about greed, nothing else.

  • by jonbryce ( 703250 ) on Saturday August 01, 2009 @10:46AM (#28908679) Homepage

    My electricity bill has a daily standing charge + a charge for each unit of electricity I use. I thought that was a pretty common arrangement, and the standing charge covers the cost of grid maintenance, and the unit charge covers the cost of generating electricity.

  • by Vellmont ( 569020 ) on Saturday August 01, 2009 @11:11AM (#28908841) Homepage

    Many electric providers charge a base "connection" fee to all customers to cover the costs of maintaining the connection, billing, etc.

    I'd be surprised if all providers didn't already do that. Every utility bill I receive has a base charge on it.

    What you're missing is that the article doesn't say if Denver residents are already paying a base fee or not. If they are, this is a special added fee just for solar households. It's a poor article. I wouldn't try to draw many conclusions from the lack of facts available.

  • by webdog314 ( 960286 ) on Saturday August 01, 2009 @11:23AM (#28908911)

    Uh, actually the parent is right, at least for SoCal. We get brown-out notices on the hottest, brightest days when people crank up the AC. The rest of the year, we're fine. Can't speak for the whole country though.

  • by Jimithing DMB ( 29796 ) <dfe@tgw b d .org> on Saturday August 01, 2009 @11:26AM (#28908949) Homepage

    Actually no, it's about simple accounting for resources. It costs money to maintain the electric grid. There are two basic costs involved for you to receive power: 1) Cost of generating the power, 2) cost of transmitting that power. Ordinarily when you buy power from the power company they roll these together and charge you per kWh.

    When you have your own on-site generation you have 3 basic states of use: 1) Using some amount of power from the grid, 2) using zero power from the grid, 3) putting power back into the grid. For state 1 and 2 you are simply charged for electricity as per usual. It's state 3 that's problematic.

    The problem is that many people naively expect to get paid the same rate for energy they put back into the grid as energy they took from the grid. But the rate they paid to take energy from the grid was generation plus transmission. If the rate they are paid to put energy back into the grid is the same rate, e.g. "running the meter backwards" then they are effectively being paid for stealing.

    The ideal fix for this is to have two meters. One for inbound power usage and one for outbound power supply. The customer would then have to pay for inbound usage at the normal rate and would be paid for supplying power at a reduced rate. That is, they would be paid for generation of the power but would not be paid for transmission of it because they did not themselves pay for transmission.

    In lieu of this, the power company has found it easier to simply charge a connection fee to pay for this transmission. It looks bad to someone who is ignorant of the mechanics of power transmission and it doesn't seem particularly fair because it's apparently a flat fee that will be charged based on how much the company estimates the customer is using the grid to transmit power.

    That said it is still more fair than what they are doing now which seems to be paying the customers who put power back into the grid for not only the generation, which they did provide, but also for the transmission, which they did not. The money has to come from somewhere and that somewhere is the companies bottom line. So the company will eventually petition to have the electricity rates raised to cover this cost which means that everybody else will have to pay more because some people think its cool that their meter actually runs backwards.

    It's really not that difficult to understand. The problem here is that the reporter didn't check her facts or use logic or reason. Instead it's a he-said he-said story between the underdogs and the big bad evil corporation. She mentions in the article that she pressed the power company spokesman and got him to admit that "currently, no Xcel electric customers pay extra to fund solar connectivity fees. In reality, Xcel absorbs those fees." Then she goes on to say that "The money from the proposed fee would not go into the pockets of electric customers, but would go back to Xcel." This is true but no where near the whole story. Xcel has a fiduciary responsibility to account for resources used. Right now Xcel's resources are being used without payment and actually worse than that Xcel is actually paying someone else to use their resources. That is an untenable situation which can only be resolved by charging someone for it. This can be done by either correctly charging the customers who use these resources or, if this fails, by raising the rates for everyone. There are no other options. But Christin did not bother to point out the obvious here.

  • Net Metering (Score:4, Informative)

    by russotto ( 537200 ) on Saturday August 01, 2009 @11:28AM (#28908961) Journal

    It appears, from another article, that Xcel wants to charge a fee based on the power generation capacity of a customer's solar panels. This seems totally unreasonable, except for one thing -- net metering. Net metering means Xcel essentially buys the customer's power at _retail_. So Xcel has to eat part of the transmission and distribution costs for the customer electricity. Net metering is required by federal law, so they can't just not do it. This seems to be an attempt to find a way around it.

    Xcel already charges a flat fee to all customers (in addition to metered charges); this is on top of that. []

  • by kramer ( 19951 ) on Saturday August 01, 2009 @11:28AM (#28908969) Homepage

    Not really. The standard electric meter runs forward when you're buying electricity, backwards when you're selling electricity. With a standard meter, the company can only tell your net energy use. If you use 100 kilowatts, and put back 95 kilowatts, all they see is 5 kilowatts. There's no record of when each kilowatt was used, or anything like that.

    This assumes a standard mechanical electric meter, which is what is in something like 95% of residential homes. Digital meters can keep track of when you use, and meter at different rates, but for the most part they're only used by larger commercial power users.

    Further, several states forbid the electric company to buy from consumers at a lower rate than they sell to consumers.

  • by Anonymous Coward on Saturday August 01, 2009 @11:38AM (#28909051)

    Here in NJ, the electric company only pays you for the electricity you put into the grid, but charges you for both electricity AND delivery when you take it off the grid. So If your average consumption equals your solar production, you still end up paying. I would hardly call this mooching - especially when delivery charges are nearly as much as usage charges.

  • My electricity bill has a daily standing charge + a charge for each unit of electricity I use. I thought that was a pretty common arrangement

    Some energy companies have lower daily standing charges and higher charges per megajoule. As far as I can tell from the article, the fee described is just an increase to the daily standing charge to cover the cost of engineering the grid to work with more customers who tie their solar panels to the grid.

  • by Anonymous Coward on Saturday August 01, 2009 @11:58AM (#28909223)

    They are already making money, they buy any energy not used at wholesale prices (about 3.3 cents a kw) then sell it back to others at 7 to 12 kw.

  • by ranton ( 36917 ) on Saturday August 01, 2009 @12:28PM (#28909455)

    They didnt say that it was a "connection fee", it is a "connectivity fee". The on going costs are meant more for maintenance than for the initial connection.

    It is still most likely a crock of shit way to increase profit, but you should at least understand what the power company is claiming before you attack it.

  • by HereIAmJH ( 1319621 ) <> on Saturday August 01, 2009 @12:32PM (#28909491)

    It's more than double dipping if they try to charge more, and too damned bad if their connection fee didn't cover future (I'm not using much of your power anymore).

    If it's anything like my electric company, they get an ongoing fee as well in the form of a minimum usage charge. I have a house I'm remodeling and I never hit minimum usage on any utility. The electric company gets a minimum $16.50 a month. I forget how much that covers. Water and sewer EACH get $14.50 a month until I use more than 1000 gallons of water. And gas wanted $27!!! a month. I told them what they could do with their connection charge, and went all electric. Now if I could just get them to pull their leaky meter and cap the line. In my opinion, the only organizations more customer abusive than a utility company are government agencies.

  • by Anonymous Coward on Saturday August 01, 2009 @12:46PM (#28909651)

    the loss with DC is not higher than with AC.

    AC originally won over DC because AC voltage can be boosted with the use of transformers, which reduces losses. DC can only be "transformed" using switching power electronics which didn't exist when the electrical grids started.

    today we have HVDC (high voltage DC) which is preferable to AC transmission for long distances.

  • by ImYourVirus ( 1443523 ) on Saturday August 01, 2009 @12:56PM (#28909749)
    Ok so it would almost be understandable if you weren't using any electricity at all for several months from 'the grid' a fee then would sort of make sense, but what happens when you start using the grid again, does that fee go away, or do the greed mongers keep charging you? At that point it's not fair to charge you that fee when you are spending money using 'the grid' power. Either way these bastards are still making money hand over fist, why they gotta pick on the little guy *trying* to save some cash, or go green, or whatever the reason...
  • by Anonymous Coward on Saturday August 01, 2009 @02:30PM (#28910711)

    The problem is that many people naively expect to get paid the same rate for energy they put back into the grid as energy they took from the grid. But the rate they paid to take energy from the grid was generation plus transmission. If the rate they are paid to put energy back into the grid is the same rate, e.g. "running the meter backwards" then they are effectively being paid for stealing

    Thats an interesting way of spinning it, but spin it is.
    The electric companies have been slowing increasing their charges on an almost monthly basis by adding new fees, charges and supposed taxes even when those
    taxes do not leave their pockets. 10 years ago my electric bill was around $30 a month now I pay a distribution charge, a supply service non-fuel, a service charge fuel and a new electronic meter which registers ever increasing amounts of usage even when everything in the house is turned off and I'm out of town.
    My distribution fee is almost $50 and I'm looking at a $300 bill for a month I spent 3 weeks out of town.
    I don't think you can rightfully call solar panel users thieves. The charges are already broken down into connectivity fees versus usage fees. This is a simple matter of a
    company who doesn't like some of their customers reducing their dependancy and they are going to make sure they get their money anyway.
    Solar panel users reduce the strain on the grid especially during those peak periods ( hot sunny days ) and reduce operating costs for both the company and the planet.

  • by sribe ( 304414 ) on Saturday August 01, 2009 @03:00PM (#28910907)

    ...I sell my electricity back to Xcel at wholesale prices...

    No, you do not. "Net metering" means what it sounds like it means. Incoming power runs the meter forward; outgoing power runs the meter backward; at the end of the month the meter is read and you pay for the net usage. Thus you are being credited for your power generation at the exact same retail rate you are being charged for your power consumption.

    The only time that discount pricing comes into the picture is that if over the course of an entire year you generate more than you use, you get a refund for the excess at a steeply discounted rate--less than wholesale actually, I think.

  • Re:Easy (Score:3, Informative)

    by FirstOne ( 193462 ) on Saturday August 01, 2009 @03:19PM (#28911039) Homepage

    "But, a house with solar panels would net to (near) zero, as the energy produced during the day offsets the energy consumed at night. The net is zero, but the gross energy in/out most certainly isn't. The distribution company must still maintain the lines that allows the house to sell its energy back to the grid, as well as deliver energy to be consumed at night, but the distribution company is no longer being compensated by houses with solar, unless there's a rate structure change.

    Now, the rate structure change is here as the new proposed fee."

    Your argument fails to recognize some obvious facts, like Ohm's law, where Grid loss increases by a squared function of load (I^2*R).

    The homeowner who is generating surplus electricity is usually doing so at peak power consumption periods.
    I.E. When grid losses are at there highest.. ~25 to 30%, where Xcel must produce 1.3 to 1.4 kWh to deliver 1 kWh to the customer.

    A locally produced(solar) peak kWh suffers very little of those grid losses, (1 ~ 2 %..) But Xcel's bills the neighboring consumer the price for a full kWh, but Xcel's avoids generating 1.4kWh and losing 0.4kWh on grid losses. A secondary effect of reduced primary grid current is that overall grid losses will also decrease (Xcel profits again, more billables, with reduced costs.)

    When a residential solar producer, consumes off peak electricity, the grid losses are much lower, maybe 5% to 10%.

    Distributed solar generation extends the life span of grid components in a logarithmic fashion, since most components do not have to carry all the load @ peak consumption, as a result operational grid lifespan will significantly increase (with lower maint costs). Note: A vast majority of residential Solar production is consumed before it traverses the first transformer. (I.E. Consumed by a neighbor. ).

    In my book, Xcel would be getting more than a fair deal paying residential solar producers FULL retail price for the electricity they produce.

    Lastly, if one does a fair cost analysis of mankind's carbon dioxide emissions and the estimated cost of AGW effects (submerged coastlines, dislocation, etc, unavoidable damages(in the pipeline) to U.S.A. 500T$ over next 50 years of US FF use == $670 per barrel of oil, and $1.61 per kWh generated by Coal []). One should have no qualms paying solar energy producers five times the prevailing rate for any surplus electricity generation.

  • by An Onerous Coward ( 222037 ) on Saturday August 01, 2009 @05:58PM (#28912123) Homepage

    Depends on where you live. If you're generating in the afternoon, when energy usage is at its peak, you're creating more valuable energy than you're using. In some areas, they charge extra for peak power. But homeowners probably trade one kwh of peak energy generation for a credit against the less valuable kwh they used later that evening. Further, peak power is more valuable even where the rates aren't structured to reflect the fact.

    Peak power means that every source of generating capacity is already running near max, and adding to that capacity requires additional capital outlay. IOW, the homeowner is saving the power company capital costs.

    Last point: Energy generated by a homeowner doesn't need big, expensive transmission lines. Most likely, someone will use the power before it makes it out of the neighborhood. If anything, they're reducing the burden on transmission lines.

  • I have Xcel (Score:3, Informative)

    by bussdriver ( 620565 ) on Sunday August 02, 2009 @02:47AM (#28914519)

    1) I pay a connection fee all the time its not installation.

    2) I have a cabin. It has gone all year without some years and I STILL pay a connection fee for not using any power.

    3) Xcel runs to the state to get tax payer money every time they do anything that SHOULD have been planned for as part of their private business; but they are essentially a sanctioned monopoly with regulations to keep the public suckered.

    The power grid like the ROADS should be managed by the public; around here our roads are handled well, our bridges not so well. The one bridge that fell down you heard about in the news was actually part of the federal highway system and they should take part of the blame along with the low bid contractors involved. The public here was ALSO to blame for cutting funding for decades leading many of us to predict bridge collapses years in advance! Sadly, the public DID approve measures to restore some funding but it was too late.

    Point is, a public run system like the roads can be run as well as the public's competence at democracy - regardless of the use of contractors or regulated privatization (think of the overhead: profit, regulation, enforcement, fines, corruption...all paid by the public.) The power lines, phone lines, and cable lines run over PUBLIC LAND and should be owned by the public which essentially PAYS for them; bad contractors can result in replacement contractors or government management. Rural phones, cable, power etc were forced by regulation and payed for by the users and tax payers. When a rare private investment pays for something like cable lines that is funded by the customers and quite often corporate welfare "incentives." The process encourages corruption and monopoly abuses. If Xcel merely sold power and another entity maintained the grid itself this would be much less of an issue.

    In MN we have OLD OLD gas lines around the whole city and nobody wants to pay for it and naturally Xcel didn't plan long term because that is bad business since they can just force the state to pay it. You'd think a bridge falling would wake people up but we've had gas explosion accidents for many years ALREADY but nothing big enough and frequent enough to wake people up (or the local media which gets money from Xcel.) Want to know the solution? They wait for reports of gas leaks and then check that area or maybe the road to determine if they need to fix it-- they are too cheap to run plastic pipe in the old pipe in my area and continue to make a patchwork of the road on a house-by-house basis for the last decade.

    Xcel won't listen until you have a significant amount of STOCK; you can't vote, you can't shop elsewhere, and you can't revoke any local contracts with them.

Did you hear that two rabbits escaped from the zoo and so far they have only recaptured 116 of them?