Solar power advocates and utility companies are on a collision course in many states. Usually, the issue is net metering charges which pay small solar providers for the excess electricity they put back into the grid. Utility companies want to pay people as little as possible. People with home solar installations want to be paid as much as possible to help offset the cost of their systems.
Another factor is the trillions of dollars utility companies have invested in local and long distance grid infrastructure. By law, utilities are entitled to earn a guaranteed rate of return on every dollar invested. They are perfectly happy to support de-cargonizing the grid, just as long as it doesn’t cost them anything.
The classic argument by utilities has been that people who make their own solar power do not pay their fair share to maintain the grid. The argument is similar to the claim that people who drive efficient automobiles don’t pay their fair share to maintain the transportation infrastructure because they buy less gasoline than others.
Solar advocates respond that they use most of their electricity locally without need of an expensive transcontinental grid. Not only that, their electricity doesn’t pump billions of tons of emissions into the atmosphere each year, which confers a health benefit on the general population. That should be worth something, they argue.
In Colorado, XCel Energy proposed a new charge on all solar customers, an idea that was furiously resisted by a dozen or more solar power advocacy groups. Now, all parties have agreed to a negotiated settlement of the dispute that may serve as a model for other states. The agreement involves refocusing the pricing of electricity for retail customers on a time of day model.
Demand for electricity varies widely over any given 24 hour period. Typically, demand is low in the middle of the night and high during the day. The new model will allow the utility to charge more for the electricity is provides during the middle of the day but allow consumers to pay less for electricity during periods of low demand. One of the things people can do cheaper at night is recharge their electric and plug-in hybrid cars.
Spreading out the demand lets utilities operate more efficiently, which saves them money. Since solar panels make most of their electricity in the middle of the day, people with rooftop solar can consume their own electricity during the day and avoid paying top dollar to the utility company. In exchange for the agreement, XCel Energy has agreed to withdraw its request to the Colorado PUC for a flat solar system user fee.
This agreement foreshadows a shift in the electricity industry based on what is called “time shifting” technology. That terms covers any method of storing electricity now for use later. Residential storage systems like the Tesla Powerwall are time shifting devices. So are grid storage batteries. Concentrated solar power is another. Others are far more low tech, like the proposed train full of rocks that goes up a mountain during the day and generates electricity at night as it descends. Or the decades old facility in Wales that pumps water uphill during the day so it can flow downhill at night.
“Colorado is a top 10 state for solar jobs, and people are moving here specifically to work in the solar industry,” says Lauren Randall, senior manager of public policy for Sunrun. “Through collaboration between Sunrun, Xcel and other stakeholders, Coloradans who choose to invest in rooftop solar will avoid a confusing and unnecessary new charge. We are encouraged by this settlement, which shows the value of parties coming together, listening to consumers, and agreeing to test rate structures that promote consumer choice.”
Alice Jackson, regional vice president for rates and regulatory affairs at Xcel Energy Colorado, heralded the settlement as one of the most comprehensive and complex agreements of its kind. “It will allow us to meet our customers’ expectations by giving them more control over their energy choices. It will bring more renewable and carbon-free energy to Colorado through the use of new technologies, and it will be provide affordable and reliable energy to further power the state’s economy,” she said in a statement.
A common saying says the best resolution to a conflict is something that makes nobody completely happy. Several solar advocacy groups refused to endorse the compromise. But the agreement will be a way forward for all concerned, unlike in Nevada, where the state public utilities commission caved in completely to the demands of NV Energy, a move that spurred SolarCity to suspend operations in the state and lay off more than 500 workers.
As small and large scale electrical storage opportunities increase, time shifting will become more common and will help balance grid demand. A more efficient grid means more profits for utility companies. Let’s hope this form of negotiated settlement becomes the norm in other states like Arizona and Florida where utilities are digging in their heels in a last ditch effort to hang on to an economic model that is rapidly crumbling.
Source: Green Tech Media Photo credit: Sunrun
