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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.''"
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.''"
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.
Obviously this varies from region to region, but I was always led to understand that in hot locales, peak was late afternoon, when houses began to cool down, and businesses were still cooling. ...part of the reason why large solar plants are moving to molten salt -- to keep providing power in the early evening when the sun isn't directly overhead.
'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.
500 customers from 1.3 million is pretty much a rounding error. You can't tell me that they are such a drain on the system that the power company can't pay the maintenance costs.
If you take off your "Electric Companies are TEH EVIL" hat for a second, it's pretty interesting that they have the same issue that states do with paying for roads in relation to electric cars. That is, someone generating electricity or using an electric car is making use of a resource where the cost of access is subsidized by something you are no longer consuming.
I think the electric companies have a pretty good point that they still have to pay to maintain lines to your house even though you are now consuming a fraction of what you would have.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
This seems like the sort of problem that could be much more logically and less painfully solved by breaking out the (more or less constant, at least within a given size class and geographic area) grid hookup cost and the per-KW/h price for electricity as separate items on the bill.
Infrastructure doesn't build and maintain itself, so if you want to maintain your connection, it's only logical that you'll pay something for that. If you try to bundle the distribution costs into the energy cost, though, you just get a bit of a mess since the amount a given person is paying for infrastructure can vary wildly and you end up having to field requests like this. Even here, they make a somewhat arbitrary distinction between users who do feed to the grid and those who don't (who presumably also use less power but just aren't easy to identify). Just break out the two items and call it a day.
Assuming the maintenance costs are built into the cost of a kilowatt-hour and your budgeting process assumes a minimum usage to recoup each customer's share, customers that dip below the minimum would necessarily need to pay more.
The real question is why they feel the need to change the base rate (the most politically difficult route, as you have to convince the Public Utilities Commission of your state) instead of adding a "co-generation fee" or something similar to make up the difference.
A co-generation fee would only make sense if it was extra work for them. The baserate is the correct place to do it but not the way they are doing it.
They shouldn't charge a different baserate to different customers. There should be a "connection fee" and a "per kilowatt" fee. The "connection fee"
should be the same whether you use 0kw, 1kw, 100kw, or negative kilowatts. Whether and how much you should get credited on the "per kilowatt"
side if you go negative should be the only thing being debated. On a somewhat related note, I kindof like how alot of other countries do utlities and
charge progressively. The first kilowatt is cheap but if you are a high user (i.e. business or rich) then each additional kilowatt gets progressively
more expensive. This encourages conservation and is a decent type of consumption tax (assuming they reduce taxes elsewhere) as it allows the
poor to get basic electricity for free but charges a "luxury tax" on richer high usage consumers. Of course this works better in countries where the
government owns the electricity.
They say they want to start working out a solution BEFORE it becomes a big problem.
A solar customer could sell lots of power to them around noon, and use about the same amount at night. This customer would have an electric bill of $0, because they put as much energy into the grid as they took out. In 10 or 20 years, if a million customers are doing that, you have the power company trying to run on a budget of zero - no money to pay salaries, no money to fix equipment, etc. Obviously that doesn't work, the power company would go broke and noone would have power, except while it's sunny. They don't want to wait until that happens to address the problem, a problem which probably will occur if nothing is changed.
I think the idea is to get this passed while it is still "only" 500 people. They would get a lot more push back if it was 5,000 or 50,000 at which point it would start to be a significant factor pushing up costs for others. NOTE: I think they need to evolve with the times, not try to charge more to sustain their model but I do understand why they are doing it.
Perhaps this is all a part of the vast right-wing conspiracy against green energy. Can't let the hippies win!
I live ze unknown. I love ze unknown. I am ze unknown.
Oklahoma has some fantastic wind & solar resources and adjoins the Texas Panhandle where there are many wind turbines and therefore a reasonable transmission infrastructure.
Even if they didn't need the wind & solar, Texas can make very good use of it. They should be investing in those resources and they could probably get Texas to pay for a big chunk of it.
Pain is merely failure leaving the body
It's too bad they couldn't store that energy in another way for long term usage in batteries. Are the windmills too efficient?
This is NOT about efficiency, it's about availability. With wind and solar there are unpredictable variations in the power provided. The problem here is that this variation in power output effects the stability of the power grid in a number of ways. The most basic issue is that the electric providers must schedule power generation literally *hours* (and sometimes days) in advance. This means you order capacity to cover the possible variations from all these solar and wind power sources. But capacity costs money if you use it or not, because you committed to burn the fuel, but you didn't use the power.
So, solar and wind add to uncertainly and lead to more fuel waste. This translates into increased financial costs/KWh that is not always apparent to users of the grid. Battery storage could help, but it is hugely inefficient so most solar and wind power installations don't have any storage capacity.
There are other stability issues, but they get pretty hard to explain..
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
The last time I looked, the flip side to a regulated utility was a deregulated utility. Deregulated utilities end up as monopolies.
The other last time I looked, business interests of all kinds turn to governments to maintain their profits, and raise barriers to competition. And spare me the "The problem is bad regulation." That's not the problem.
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
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.
I think the electric companies have a pretty good point that they still have to pay to maintain lines to your house even though you are now consuming a fraction of what you would have.
I don't know about Oklahoma, but my bill is split into two parts: a fixed per-day customer charge, plus a separate charge per kWh. Presumably, the charge per day covers the lines and administrative overhead. (The per-kWh charge is further divided into separate fuel and generation charges, and the fuel rate changes frequently.)
If Oklahoma uses this system, then the utility is being fairly compensated for the power lines no matter how little electricity the customer actually buys.
It's about time that power companies realize that their most important goal is not in providing customers with a quality source of electricity, but in making investors as much money as possible.
Do Oklahoma power companies not charge separately for connectivity and power consumption?
I thought it was common sense to be charged a fixed daily rate and an additional rate per kWh.
The fixed rate is supposed to pay for transmission lines, maintenance, billing, customer support etc. The kWh rate pays for generation.
I guess if you generate more than what you consume, you pay nothing. You pay nothing towards the maintenance of the power grid but enjoy the benefit of effectively using it as a battery of infinite capacity. The utilities still need to provision capacity for your peak demand, when the sun goes down and you turn on your oven, stove, hot water cylinder and electric heating all at once in winter, pulling up to 10kW, the same time as everyone else in your area.
I don't know how or where this "grow or die" idea began, but it's just plain wrong.
It's not grow or die. It's grow or lose investors. If I own a company (I'm a shareholder) and want a return on my investment the only way for that to occur is for the company to grow. In fact it has to grow faster than the rate of inflation or I will be losing money. The company has to engage in profitable activities sufficient to generate a return for investors. If the future value of risk adjusted cash flows is lower than another potential investment then the company will lose investors because they will put their money into the other investment.
You can't have infinite growth within a finite market.
I've never seen a company experience infinite growth or anything close so that's kind of a meaningless statement. You can however have substantial growth rates for a long time both for a company and for a market. There are companies that have grown by 10%+ per year on average for decades.
Where I live a large number of summer homes are unoccupied the majority of the year, to get around zero charges for empty homes (which still require system maintenence to keep connected) the utility charges a daily connection fee, coupled with slightly lower per KWh charges.
This change in billing structure could easily solve the $0 solar customer problem.
However the proposed changes, raising the base rate, will also encourage energy conservation.
Last I checked Oklahoma was not growing at such a fast pace that electrical services are in an "expanding" phase. More like "run and maintain" phase.
Nope, we are pretty much maxed out on power. Thus they are pushing out some programs to highly incentivise (by a factor of 10) to move power consumption out of peak time. They are putting in expensive smart thermostats that communicate rates to you that can change from on day to another depending on the temperature. they have rolled out smart meters that report back every 15 minutes on the usage. Basically, they know they need to build another plant but they are delaying as long as possible because it is a huge capital expense, and of course, no one wants to let them build it either, at least until the rolling blackouts start.
If you are not allowed to question your government then the government has answered your question.
What the hell are you talking about. Any engineer will tell you that generating power at peak demand is much more expensive on the plant than at other times. So even though the customer is being billed zero, the utility still gains. Of course the utilities are greedy bastards so they go to the government for more money that they somehow feel they are entitled to. You see the utilities are the real welfare queens here.
Further, they should go to charge you based on "time of use" for that Kw/H.
Personally, I think the electric company should *pay* (at a discount) the Solar customer for each Kw/H the customer provides based on their current cost on the wholesale market and not pay at the customer's current retail price. Yes, customers may get more or less than they pay depending on when the power is supplied to the grid, but this would more closely reflect the utilities actual costs and benefits.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
"I guess if you generate more than what you consume, you pay nothing" ..
And this electricity is fed back into the grid and being sold on to the other consumers. I just wonder what bull session came up with the idea that generating electricity was the same as consuming other peoples electricity.
Peak demand usually occurs between 11:00 and 2:00 pm. There is plenty of sunshine on rooftops at those times, so the panels are in fact generating power.
Short term throttling of power is possible for short terms, but most large scale plants throttle average power output in terms of hours not seconds. There usually is some stored potential form the heat already in the boiler. But that's for plants which are actually generating power right now and it is limited because it takes time to throttle up most burners and actually get the heat into the water. Plus, most plants will be operating near capacity anyway, which is where they are the most efficient.
Cold starts can literally take days for some kinds of fuels. Because of the lead time, scheduling of power capacity is usually done over a period of days, with finer and finer detail in the plan as the time approaches. Solar and Wind are extremely difficult to schedule as the weather is hard to predict. This leaves much more uncertainty in the plan, which means they have to keep more capacity in "stand by" longer. This costs the generator fuel, money buying and stockpiling fuel, wages and such.
Solar and wind are subject to the weather. Sometimes the wind blows slower than expected, or gusts cut instantaneous power available. Solar suffers from clouds drifting over the collectors. This means that capacity must be maintained to cover for these variations. Other kinds of plants don't suffer from variations in output, so you can run at lower margins. But with Solar and Wind, you have to maintain higher margins. Margins cost money by burning fuel and other operating costs or by keeping a quick throttling plant in a lower power output than it's ideal efficiency.
So Solar and Wind, simply because they are unpredictable cause inefficiencies in the system, waste more fuel as a result.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
That doesn't mean you have to use it. That's why they make transfer switches. And if you ever want to sell your house, you can be damned sure you'll get a better ROI if it's hooked to the grid.
Here's a juicy tidbit for those not familiar with the Codes: Builders and Fire Marshalls are not the only ones writing the codes. The mortgage underwriters and the insurance companies also have their hands in the pie (in addition to all the manufacturing special interests, like sprinkler manufacturers and hurricane strap companies). The insurance people want to minimize losses in major events, and the mortgage underwriters want to make sure they can resell your house when you default on the loan. Look at the codes with an eye to *who* wants to preserve their business helps to see how some otherwise odd provisions get put in.
Is it just my observation, or are there way too many stupid people in the world?
You know, a couple of years ago someone invented 'Proportional Fonts', the idea being it saves paper and is (much) easier to read.
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This is a higher BASE rate. Not what they get charged for power. Since the customers are generating power and possibly even getting paid by the power company to do so, they are paying far less than most of us. But they still use the most expensive part of the utility, the lines. Green energy doesn't make power lines any cheaper.
When customers give power back, often the utility is required to pay them for that power. But wind and solar do not provide power to the grid continuously. When the wind picks up or the sun is out, suddenly all these people are providing power at the same time... and not when the power company needs it. The power companies methods of generating power do not ramp up or down easily. For example, coal burning plants operate very inefficiently when they are not running at full capacity. So every watt contributed by wind and solar actually make a coal plant even less efficient.
Shit like this is what will sink green energy. Turn it into a subsidy like Ethanol and it'll never get anywhere.
Exactly. That is how I pay for my natural gas, a monthly service fee and charges for BTUs consumed. In the summer my service fee is typically more than my charges for the fuel but in the winter the fees are a fraction of the total bill.
I have no problem with having to pay for the utility to maintain the connection to the service separately to the services provided. If these people want to have the utility buy their power then someone has to pay for the connection. One might assume the utility should pay but it's not the utility that wins out in this arrangement, the homeowner does. Without the utility there the homeowner would have to invest in an expensive battery pack or have the power go out at night.
Without the connection to the utility the homeowner could not sell their power so the homeowner can pay for that connection. The utility might not mind buying the power but the hassle of having to deal with single provider that provides them so little power they might rather not deal with them at all if the utility had to pay for the line to their property too.
The change does not "discourage" wind and solar any more than any other homeowner provided power source. It just turns out that most people don't have a coal fired steam generator on their property.
I can hear it now, "But shouldn't we encourage wind and solar?" I'm not so sure. If wind and solar can't make a profit on its own merits then it's not a viable energy source. "But coal and oil gets subsidies too!" Yep, and they shouldn't get subsidies either. No more energy subsidies.
I like distributed power and we should have more of it. Problem is that the nature of wind and solar have tendencies to destabilize the electric grid. People with solar panels on their roof spreads out the energy generation sources but without utilities keeping the grid in order the rooftop solar panels don't help much. These homeowners need the utility more than the utility needs them. Let them bear the cost of the benefit of the grid connection.
I am armed because I am free. I am free because I am armed.
> Most backed electricity is wasted because control systems designed to balance
>the grid cannot cope with thousands of variable intermittent sources
Nah, they've had software for this for years. You should google the IBM page on this they track clouds as they move by their effect on output on panels and they project that forward in real-time to forecast production over long periods.
> causes negative electricity prices where the power company pays users to waste excess electricity
Another tired old canard. The power company also makes money by selling power at a profit, and in every single example I have ever seen, the balance is *always* positive. And yes, I work in the industry.