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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 YahoKa ( 577942 ) on Saturday August 01, 2009 @10:29AM (#28908559)
    I am not sure we can/should speculate on this without more details. Of course the energy company wants to ensure its revenues, but this may not be unreasonable. Even if you have solar, you're (probably) still connected to the grid. It's a huge convenience to you to use just a bit of energy when you really need it - but what if you only use $5 worth of electricity at a low cost? The billing probably process probably costs a nice percentage of your total bill! Is it really unreasonable to pay for a connectivity fee? I don't think it is necessarily...
  • by Spazmania ( 174582 ) on Saturday August 01, 2009 @10:32AM (#28908575) Homepage

    Your natural gas company charges you a monthly connection fee, even in the summer when you don't use it. Just 'cause you're not burning gas, they still have to maintain the pipes.

    Your ISP charges you a monthly fee for your Internet link regardless of whether you transmit any packets. They have to maintain their infrastructure on the expectation that you can use it at any time. That costs them money whether you use it or not.

    Singling out solar customers and only making them pay a fee seems unfair and if it isn't illegal it should be. But simply saying, hey: there's a minimum monthly fee for an electrical hookup whether you use it or not doesn't strike me as out of line.

  • by HeLLFiRe1151 ( 743468 ) on Saturday August 01, 2009 @10:32AM (#28908577)
    The logic is that even if the customer isn't using the power from the electric company, they will still be using the companies lines when the meter runs backwards. With that logic, why should the power company be able to use land for their poles and such without compensation to the who don't use their electricity?
  • Easy (Score:4, Interesting)

    by nightfire-unique ( 253895 ) on Saturday August 01, 2009 @10:40AM (#28908643)

    This one's easy. Split the bill into two portions: transmission, and generation.

    Line usage gets billed per day, and generation, per kWh. The line usage fees cover the maintenance of the power lines and are charged whether or not you use (or contribute) any power. The generation fees can range from negative (if you offer a net surplus) to positive (if you use more than you contribute).

  • by Anonymous Coward on Saturday August 01, 2009 @10:51AM (#28908715)

    What a load of bull. My gas company charged us 1.5k to put in a new line from the street and then charged us for each meter (4) installed. The pipe from the street to the house comes out of our pocket. The line in the street was paid for by the government. When one of my tenants turns off their service they pay no fees. We looked into having a new line run to our property as the current electric is against city code, and we were told we'd have to pay several k to have a new line strung along the property line. We are talking 60' of wire here. $2500.

    This is why utilities water, gas, electric, fire, police, medicine etc should be publically owned. A public utility can be run not for profit, and doesn't screw the customer when the infrastructure build with public funds requires regular maintenance.

  • Looking at my most recent bill, I think I pay $10.68 even if I use 0 KWH, so I already pay such a "connection fee" with Consumers Energy in Michigan.
    System Access Charge - 6.00
    Delivery Surcharges - 4.68
  • by Latent Heat ( 558884 ) on Saturday August 01, 2009 @11:04AM (#28908791)
    I used to be sympathetic to the mindset of all of the people using Ramsey Notation to express their frustration at the power company trying to tack fees on to solar energy users. After the recent financial crisis, I have changed my sympathies to the crabby power company people, but for an indirect reason.

    All loans and mortgages involve some degree of risk. Homeowner loses their job, simply gets tired of making house payments, etc, etc. Risk, however, can be mitigated by pooling -- the principle behind insurance. If we pool a whole bunch of mortgages together, the risk kind of average out, doesn't it? One homeowner may lose their job, but they are not going to all lose their jobs at the same time, right? Yeah, one house gets the roof blown off in a windstorm, but the roof's are not going to blow off all the houses? For a Midwestern tornado, maybe an OK assumption, for Hurricane Katrina, maybe not so much.

    That is how we got into the Financial Crisis. It wasn't so much that any one loan was higher risk than any other, but they all got bundled into some kind of traded mortgage bonds where everyone thought, "hey, they can't all default all at once." A recent discussion of this matter mentioned that the key factor was the Pearson r-coefficient of all of those mortgages, and no one doing the bundling or buying the bundled mortgages had a clue.

    Wind and solar have a "capacity factor", a kind of risk that they cannot be relied upon to supply electricity when called upon. I used to think that one could "pool the risk", interconnect all of these wind generators and solar panels into the grid and average out the fluctuation. For wind power, I am pretty sure that the capacity factor is highly correlated and hence wind is almost worthlessly unreliable. For solar, I need to see some more data.

    The thing is that wind is highly variable, and the variability can be correlated over continental land masses within the reach of any grid, and that wind can just quit for weeks at a time (summer doldrums, if you will). One of the things often suggested is "try it out and get real-world experience." Well, wind is being tried in a major way in Europe, and the capacity factors in practice are proving to be well below original predictions and projections.

    Now solar could be another thing, especially in the desert Southwest. Maybe the availability of solar electricity correlates nicely with A/C demand, but I would need to see some data on this, and I imagine the A/C peak lags the sunshine peak on account of thermal lag, and maybe some of this could be compensated with some kind of "smart grid" where people are encourage to run their A/C more at noon instead of waiting till late afternoon and early evening when the heat finally filters through the walls.

    The electric power companies never did like solar and wind interconnects, especially from residential users, and maybe they have solid reasons for not liking them, apart from utility executives being Blue Meanies with sharp teeth where most people have their stomachs. Maybe a homeowner with a wind or solar setup is producing much less in the way of usable green power than they think and is increasing the use of expensive natural gas in less-than-efficient peaking plants. We are geeks, here, and we can come up with some reasonable back-of-the-envelope estimates of these effects, instead of lapsing into, "Oh the humanity, those EVIL power companies!!"

  • by Anonymous Coward on Saturday August 01, 2009 @11:06AM (#28908801)

    It depends on how you are credited with the meter spinning backward. In FL you get credited for the fuel charge rate only per kWh, but the fuel charge only makes up around 1/2 the bill. The other half is an energy charge, so even though you may not be using any from the grid, you don't get that cost credited. E.g. you have to give them twice the power you actually use to get near to the almost mythical zero power bill, excluding any recurring fees they may hit you with such has being hooked up regardless of whether you use power. All power is at the same rate, we don't get cheaper rates at night. Other countries simply give you 1:1, and a check in the post should you be in credit in the billing cycle. Not so in FL.

  • by Anonymous Coward on Saturday August 01, 2009 @11:12AM (#28908847)

    this is actually somewhat uninformed. Residential peaks are typically not at system peak times. Also, the variability of solar means utilities don't save much because they cannot depend on that generation being there.

    Besides, all if this is just groundwork for a future billing system independent of usage.

  • Translation: (Score:3, Interesting)

    by kheldan ( 1460303 ) on Saturday August 01, 2009 @11:16AM (#28908871) Journal
    "We're not making enough of a profit, therefore we're going to start making up fees so we do. Thanks for the idea, air travel industry!"
    I call shenanigans on them for this. By all means, let's start making solar power for individual property owners less attractive! Let's punish them for being green and smart and trying to save themselves some money! Yeah, that'll sure incentivize them to invest $20,000 or more for solar panel installation!
    Stupid bastards. Can't wait until someone steps in and tells them "NO!".
  • by andymadigan ( 792996 ) <amadigan.gmail@com> on Saturday August 01, 2009 @11:18AM (#28908885)
    Technically, yes, it's a subsidy. Power companies (generally) don't make a ton of profit, they're regulated to keep costs down.

    This is a zero sum game, there is a certain cost to maintain the lines, the money has to come from somewhere. If you don't want to pay, then don't connect to the system.

    Yes, at the moment, the power company can sell your excess power, and overall you might end up being profitable to them without paying a cent.

    But imagine if everyone had their own solar. They would still likely be dependent on the grid for power at certain times, and they would need it to transmit their excess power. The amount of power they took from the grid would have nothing to do with the cost to the power company, you're better of with a "network" fee + a tiny amount per kilowatt consumed.
  • by Anonymous Coward on Saturday August 01, 2009 @11:28AM (#28908967)

    I call bullshit (no offense :) )

    Back in the 70s when per house power consumption was considerably less the grid was still paid for by power sales and/or a charge everyone paid. In rural areas where the cost of the infrastructure on a per house basis is much higher the infrastructure is still paid for the same ways.

    Now, per house energy consumption is at an all time high and only increasing and if you effectively use less power you are expected to subsidize the infrastructure for those who use more? If you push power into the grid at a cost less than the power company could generate it for and which they will turn around and sell at the going rate which will mean a greater profit than from their own power generation, you have to subsidize their infrastructure?

    I call bullshit. A flat infrastructure charge to everyone or this is nothing more than an attempt to tax your own power generation. The money they lose is due to free market forces (cheap solar availability) and the money they gain is from the cheaper power available to them. Any charge for infrastructure should be equal to everyone OR scaled to the infrastructure costs of the area, which would mean higher costs for rural areas.

    Are the power companies the next RIAA? Better methods exist so we'll charge you to use them since we won't make money on it?

  • by Anonymous Coward on Saturday August 01, 2009 @11:30AM (#28908987)

    In Colorado, Xcel already charges a $7/month fee to be hooked to the grid. So even if your solar panels generate more electricity than you use, your bill isn't $0. You still pay the $7 fee.

    The rebates the Xcel spokesman is talking about are paid by Xcel, in exchange for 20 years of carbon credits Xcel uses to comply with carbon emission reduction requirements.

  • by SeaDuck79 ( 851025 ) on Saturday August 01, 2009 @11:32AM (#28909003)

    Power companies have, for decades, been advocating energy conservation, through rebates, in part because it's less expensive for them to do that than to build new power plants.

    Now a power company is saying that the rebates THEY offer to prevent construction THEY don't want is only desirable up to the point...where they can't make as much money off of it? Is the objective to reduce power grid usage, or to maximize revenue? Sounds like they are reaching that decision point. Thoughts?

  • by hcdejong ( 561314 ) <hobbes AT xmsnet DOT nl> on Saturday August 01, 2009 @11:45AM (#28909115)

    That depends on your location. In the southern US you may be right. At higher latitudes, peak demand's could be in the winter.

  • by GoRK ( 10018 ) on Saturday August 01, 2009 @11:56AM (#28909211) Homepage Journal

    I think the point is probably that the "base" fee currently charged to all customers is likely not indicative of the true cost of the connection and some of that cost is incorporated into the kWh fees to more fairly distribute the charges to customers of different sizes. For example, a commercial business with 200A service actually costs about the same to connect to the grid as a residence with 200A service, only their actual usage might be 4 times higher. Likewise the cost to connect a single rural customer with 200A service might be astronomical even if actual usage is minimal.

    I would think a better model might be to establish minimum fees that more closely resemble the true costs of connection. Say your "base fee" is $20 but your connectivity actually costs about $100 net to the power company -- Well you are going to need to offset this difference some way -- either by buying $80 of power from them or by giving them $80. In the case of solar customers, this would be an incentive to reduce their grid connection by taking smaller grid service (or no service) or reducing their energy consumption in order to put enough power back onto the grid to offset the fee.

  • by Ironsides ( 739422 ) on Saturday August 01, 2009 @12:08PM (#28909305) Homepage Journal

    I'm wondering what happens if they have a net of too many generators versus consumers. Ie more power generated than is demanded.

    The frequency and voltage of the electric grid increases. If the voltage and frequency increase too much, this leads to instability and a grid crash. Literally, that is what happens if the balance gets off by more than a percent or two. Part of the solution to this would be to change the high voltage lines to DC and convert to AC for the last run to the house.

  • by WebManWalking ( 1225366 ) on Saturday August 01, 2009 @12:33PM (#28909497)
    Switching utilities, the Washington Suburban Sanitary Commission in the DC area charges me 11 bucks a month just to stay hooked up to their pipes. Since Washington DC area tap water is so foul, particularly when the Potomac River gets low, I drink only Deer Park Spring Water. (I buy them in the huge 2.5 gallon jugs, which my county recycles.) So basically, all I ever use tap water for is to hand wash dishes / dinnerware, toilet flushing and the shower. Fortunately, I don't have to estimate that part, because those uses are shown in the non-connection-fee part of the bill. I calculated it out (I assure you, correctly, because I was a Math major), and I'm spending more per gallon for tap water (when you include connection fees) than I am for Deer Park.

    I really love the comedian Lewis Black, and if I temporarily suspend remembrance of that calculation, I can still laugh at his tirade about how we're all so stupid for buying bottled water, which we could get "for free".

    I'm not saying that people shouldn't have to pay their fair share for services and infrastructure they use. The idea of connection fees is completely fair. I'm just saying, keep an eye on what's actually costing you what, and demand a fair accounting. In justifying price increases, don't let them argue that the rising cost of power production justifies an increase in the connection fee too. And don't let them argue that the rising cost of repairing transmission lines justifies increasing the price per kilowatt-hour.
  • by Shakrai ( 717556 ) on Saturday August 01, 2009 @12:49PM (#28909671) Journal

    Even at high voltage the loss with DC would be much greater than with AC

    Says who? Ever heard of HVDC [wikipedia.org]? Ever heard of the skin effect [wikipedia.org]? With modern technology DC may very well prove to be more efficient for long distance transmission than AC.

  • by zcubed ( 916242 ) on Saturday August 01, 2009 @12:57PM (#28909763)
    Here in Colorado we have net metering, so two meters aren't needed. If my solar generates more than I use the excess is sent back to the grid, "State 3" in your post, I sell my electricity back to Xcel at wholesale prices, not what I pay if I get the power from the grid, "State 1" from your post. Lets say I need power from Xcel, I would pay them (for simplicity) 10 cents per kw, but if I generate more on a sunny day I sell it back to them for 6 cents per kw. Please point out to me how are they getting screwed again?

    Us fine folks here in Colorado passed a law several years ago that 20% of electricity has to come from renewable resources by 2020 [reuters.com], so Xcel would benefit from having more people getting solar on their houses, but they want to have the generation facilities to keep their monopoly.

    Plain and simple, this is just a money grab by Xcel as they are going for the triple bonus of not having to generate as much electricity (less money spent on coal), getting a "connection fee", and getting closer to the requirement of 20% renewable without any capitol outlay.

    I think most all power companies are scared that their monopoly on electricity production and distribution is in jeopardy with advances and the new smart grid. Power companies are the single biggest roadblock to any advancement of our aged and ailing electrical grid. They refuse to look at any other way of doing business other than having huge power plants and huge power lines feeding. (sound familiar? Music industry anyone?) I realize that there will always be a need for power plants and lines, but there are many ways to get the job done better.

    I am guessing that you work for a power company?
  • by PPH ( 736903 ) on Saturday August 01, 2009 @01:51PM (#28910317)
    Aerial photographs. That (or a copy of your permit) and the appropriate ordinance and they shouldn't have any trouble adding the charge to your bill.

    Also, if I'm giving back back to the grid on good days, they are in effect getting free power to distribute elsewhere so they shouldn't bitch about it.

    Depending on where you live (what your utilities primary source of fuel is), the capital costs to maintain the distribution system are a significant part of their costs.

    What really bugs me is; if a utility moves from a model of energy charges alone (with capital costs rolled in) to charging for energy and capital as separate items, this will destroy much of the motivation to conserve energy. A capital charge based upon your peak consumption (which is a better measure of the system capacity needed to serve you) will motivate people to move their usage to off peak times. But the remaining charge for energy (fuel) may not be enough to convince people to save energy. Or install solar or other generation equipment.

    The other side of this argument is: The utility incurs no capital charges for the capacity added by its customers. Power plant construction costs that must be paid for over many years are avoided. You generate, you get paid. You don't, and the power company isn't burdened with interest payments. If they built the plant, they'd be paying whether the turbines spin or not.

    When federal legislation was first written to mandate customer generation buy-back, these 'avoided costs' were factored into the rates that utilities had to pay. And they became apoplectic. Avoided costs (the cost of the last megawatt saved) in many areas, with capital charges prorated, turn out to be much higher than average costs. So, utilities lobbied for 'net metering', based on average prices. The defense against a monthly connection fee might be to say 'Fine. Charge me for the use of your distribution system. But pay me for my energy based on avoided cost.' I'll bet that they'll drop the idea and slink away quietly.

  • by webdog314 ( 960286 ) on Saturday August 01, 2009 @02:21PM (#28910633)

    Not disagreeing with you, but in almost all cases, the people with solar panels on their roofs are both generators AND consumers. They are already paying various fees and taxes, just as any other customer would. The fact that they only use $5 a month in electricity because of their generation costs is irrelevant. The electric company isn't going to pay them per watt/hour of electricity what they are charging for the same... Not even close. THAT is their profit. That is also the pool that they use when they build or maintain THEIR grid. They get cheap electricity at a fraction of what they charge for it, and Joe Solar gets a low monthly bill because his overall generation minus use is minimal.

    If you view Joe Solar as ONLY a generator, then sure, he's mooching off the electric company's infrastructure. But as both... no way. The problem is that more and more people are putting panels on their roofs and their overall profit is at risk of dropping. They don't make as much if you don't use as much. Their "fee" is just a means of trying to recoup that potential lost profit by getting people used to paying extra just for the privilege of having solar panels on their roofs. And that's bogus. Make no mistake, there's no "free lunch" here. If we were getting electricity AT COST, then sure, they could charge us for infrastructure. But they are very much in it for the money, and so make a profit.

    Think of electricity like any other commodity. If you were buying shares of stock, wouldn't you be a little upset if you were charged a fee just because the price was lower than it was last week and a lot of people were taking advantage of it?

  • by dontmakemethink ( 1186169 ) on Saturday August 01, 2009 @02:35PM (#28910751)

    Nobody seems to complain about a 911 fee on their cellular bill, solar users shouldn't complain about paying to have the grid as a back-up.

    However, one may complain when the fee is unreasonably high and consumption costs are not rebated accordingly, as will surely be the case.

  • by Chees0rz ( 1194661 ) on Saturday August 01, 2009 @02:54PM (#28910865)
    Being from Maine- we experience power outages quite frequently during the winter, sometimes we are without power for a couple of days (if half the state is out...). The electric company provides a service to these lines and takes care of its customers. By being connected to the grid, you are given a guarantee that power is available when you need it- and if not, they'll fix it. So if my imaginary solar panels stop working- they provide the service of guaranteed electricity, and then I pay per watt. I think it is fair to have a price on this peace of mind, as well.

    Each house connected to the grid HAS to be an expense, whether it draws power or not. But I don't think charging specific users is the right answer. They should have a reoccurring connectivity fee for all users, and perhaps subsidize the cost of electricity by #solarUsers * fee.

    But your minimum charge would serve this purpose as well.
  • by uncqual ( 836337 ) on Saturday August 01, 2009 @03:12PM (#28910991)
    If this works like where I live, the power company can get screwed by solar panel customers. This is because whenever the meter is "spinning backwards", the power company is forced to pay retail rates for this power when it would be cheaper to just buy the power at bulk "wholesale" rates -- possibly from equally "green" sources (such as geo thermal, hydro, or wind). Solar panel users can suck power at peak times (hot days for example when more cooling is needed) and then spin the meter backwards the next two days when it's cooler (but still clear). On the hot day, the utility is forced to buy power at high wholesale rates (possibly generated by relatively expensive natural gas peaker plants) due to demand while on the following cooler days they are forced to buy power, when demand is low and wholesale prices are low, at retail rates from the solar panel customer.

    One reasonable solution to this problem might be to require solar customers who want to "spin the meter backwards" to install, at their own expense, sophisticated meters that track when and how much power (perhaps in ten minute intervals or whatever makes sense) the solar customer is pumping back and, at the end of the month, the solar customer is credited for the average wholesale price that the utility paid for power during each period.
  • by thetoadwarrior ( 1268702 ) on Saturday August 01, 2009 @04:06PM (#28911383) Homepage
    It's all a scam to protect profits and palying on the American fear of socialism and paying for anything someone else may be using.
  • by Anonymous Coward on Saturday August 01, 2009 @07:09PM (#28912615)

    I actually work for an electric cooperative and trust me, they are totally not scared of losing monopoly power. You have to appreciate the regulated nature of the business which states how electricity is delivered, the rate at which it is sold, the safety rules followed, etc. It's really quite complex of an operation to see up close. What scares the utilities is that distributed generation ups the ante on system *complexity* which makes it much more difficult to safely deliver good electricity as mandated by state and federal regulations. These companies are filled with people who want to do their jobs well. Eventually the big bad company argument gives way to the complex reality of delivering a product to someone before they realize they need it.

    BTW, you do have two meters (in one housing of course), one measuring inbound and one for outbound. If you don't like Xcel, go into an islanding situation and see how much voltage support you really need for all your stuff. Then you'll be glad to have grid support.

    I think our engineers probably spend $800 just to analyze solar plans and visit the site to verify that everything has been done safely before the connection takes place. We don't recoup that cost one bit, so there's another subsidy to people who don't mind paying a premium for solar panels that have a payback period of 35 years. If you drive a Lexus but complain about the high cost of maintenance, then you deserve to suck it.

    I believe in solar because local power is good, but it's cheaper to cut your consumption by 10-20% and the payback is immediate.

Money can't buy love, but it improves your bargaining position. -- Christopher Marlowe