Oklahoma Moves To Discourage Solar and Wind Power

Hugh Pickens DOT Com (2995471) writes "Paul Monies reports at NewsOK that Oklahoma's legislature has passed a bill that allows regulated utilities to apply to the Oklahoma Corporation Commission to charge a higher base rate to customers who generate solar and wind energy and send their excess power back into the grid reversing a 1977 law that forbade utilities to charge extra to solar users. 'Renewable energy fed back into the grid is ultimately doing utility companies a service,' says John Aziz. 'Solar generates in the daytime, when demand for electricity is highest, thereby alleviating pressure during peak demand.'

The state's major electric utilities backed the bill but couldn't provide figures on how much customers already using distributed generation are getting subsidized by other customers. Oklahoma Gas and Electric Co. and Public Service Co. of Oklahoma have about 1.3 million electric customers in the state. They have about 500 customers using distributed generation. Kathleen O'Shea, OG&E spokeswoman, said few distributed generation customers want to sever their ties to the grid. 'If there's something wrong with their panel or it's really cloudy, they need our electricity, and it's going to be there for them,' O'Shea said. 'We just want to make sure they're paying their fair amount of that maintenance cost.' The prospect of widespread adoption of rooftop solar worries many utilities. A report last year by the industry's research group, the Edison Electric Institute, warns of the risks posed by rooftop solar (PDF). 'When customers have the opportunity to reduce their use of a product or find another provider of such service, utility earnings growth is threatened," the report said. "As this threat to growth becomes more evident, investors will become less attracted to investments in the utility sector.''"

Comments

Something wrong at the foundation -

[Anonymous Coward]

Why do investors think they are entitled to growth?

There is a risk to returns. If the investors want no risk then they should get no gains.

Re:Something wrong at the foundation -

[ArcadeMan]

I don't know how or where this "grow or die" idea began, but it's just plain wrong. You can't have infinite growth within a finite market.

Re:Something wrong at the foundation -

[Anonymous Coward]

Regulatory capture is a symptom of lack of democracy. The solution isn't to eliminate democracy entirely, but to improve the democratic process.

The baby-with-the-bathwater reductio is elimination of the entire justice system because some powerful guys are good at manipulating it a bit. And, having been brought up at the tail end of a fascist state, I guarantee that you don't want to live in a country with an impotent judiciary.

Re:Something wrong at the foundation -

[Firethorn]

Unless you are at the end of the line the line must be maintained if you are there or not, in order to reach the next customer, so that is not a cost to keep you connected.

This sort of thinking has the cost of the line be $0 every customer but the last one, who's charged millions. Not all that practical. It's much easier to look at the cost of the line* and divide by the number of customers. I'd say it's more fair as well. If you really want, consider that you're paying for the run from your neighbor up the line to yourself. Your down-line neighbor picks up his share, etc...

The next step is to consider the base cost of a line with theoretical zero capacity, and charge each customer that ($10 or so), while building in a standard rate into the cost for building the line with the necessary power capacity(1k amps, 2k amps, etc...), including all associated equipment like transformers, switching stations, etc...
Add another $10 or so into the fee above for billing, support, and other paperwork, and you have the general situation for most power billing in the USA.

*Well, really the network.

Suck It Up!

[whisper_jeff]

'When customers have the opportunity to reduce their use of a product or find another provider of such service, utility earnings growth is threatened," the report said. "As this threat to growth becomes more evident, investors will become less attracted to investments in the utility sector.''

Suck it up princess!

I know you're going to fight tooth and nail to get legislators to protect your business model but the writing is on the wall. Feel free to look up buggy whip manufacturers if you want to see how this story is going to end in the long run.

Oh, and if you think we, the public, are going to feel any sympathy for you as your business model gets replaced by newer and better technology, trust me when I say you're wrong. No sympathy. Adapt or die.

I know you think legislate or die are the options on the table but I assure you, it's adapt or die.

Re:Interesting hat it mirrors the electric car iss

[Anonymous Coward]

Exactly this. They shouldn't charge solar customers a higher base rate, they should make the pricing more transparent. Charge everybody a monthly connection fee. That goes to maintain the lines. Then you charge for electricity consumed by their plant. They have two businesses going, generation and distribution. Their pricing should reflect that.

Re:False dilemma

[kwbauer]

Not exactly the only way. If a company is profitable it can always return a portion of that profit to its investors. This is called dividends.

Re:False dilemma

[mrchaotica]

But you as an investor will never get rich that way. People want to buy into something like Google, Apple, Amazon, whatever (remember the Netscape IPO?) - that starts out at $30 a share and zooms to $300 a share. The only way that happens is if your company grows! So while never growing is fine, it only appeals to a limited set of investors. Most investors want to buy a stock that will go up in value over time.

And of course, the real issue here is that it's completely and utterly inappropriate for a regulated utility to be that kind of "growth company!"