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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.
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.
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
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 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.
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.
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.
> 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.