Florida Power & Light : Customer had to pay more for energy because of Home Solar

[Sunking]

All POCO's buy at wholesale, and sell at retail. It cost them money to maintain your account and lines, and distribution. A home solar owner is not entitled to anything. The POCO doe snot need it, not wants it. So why shouldn't they pay you wholesale and sell retail to you. They are not in biz to give product away.

[deyounte]

Hi Sunking,

Well, buying at wholesale and selling at retail (presumably even to home solar owners) is another/deeper way the POCO would benefit from the energy from solar owners. That's another way to get a cost/price spread. It doesn't currently work that way for most flavors of net metering though. Having said that, those laws and regulations are starting to change - where they end up in 10 or 20 years is uncertain.

In regards to the "home solar owner is not entitled to anything", I might respectfully disagree. Case in point are the current laws/regulations on the books for Net Metering. They clearly spell out the rights and responsibilities of the home solar owner which while biased are not exclusively to the sole benefit of the POCO or the solar owner as can be interpreted from my previous post. There are still plenty of benefits to go around.

Cheers,

Tim D.
Melbourne, FL

[SunEagle]

Hi Sunking,

Well, buying at wholesale and selling at retail (presumably even to home solar owners) is another/deeper way the POCO would benefit from the energy from solar owners. That's another way to get a cost/price spread. It doesn't currently work that way for most flavors of net metering though. Having said that, those laws and regulations are starting to change - where they end up in 10 or 20 years is uncertain.

In regards to the "home solar owner is not entitled to anything", I might respectfully disagree. Case in point are the current laws/regulations on the books for Net Metering. They clearly spell out the rights and responsibilities of the home solar owner which while biased are not exclusively to the sole benefit of the POCO or the solar owner as can be interpreted from my previous post. There are still plenty of benefits to go around.

Cheers,

Tim D.
Melbourne, FL

If a POCO is required by law to have a certain % of their total power generated coming from RE and the Home owners pv system can be counted in that % then I would say the home owner is partially entitled to get something other than whole sale prices.

But then you have the state of CA where the small home owners pv systems are not counted (by law) as being part of the required RE%.

Seems crazy that the CA government has mandated a high (I believe it is 50%) of the POCO's power to come from RE by year 20XX but will not count any power generated by home systems as part of that total RE%. Seems like the Gov is double dipping for as much RE as possible.

[deyounte]

If a POCO is required by law to have a certain % of their total power generated coming from RE and the Home owners pv system can be counted in that % then I would say the home owner is partially entitled to get something other than whole sale prices.

But then you have the state of CA where the small home owners pv systems are not counted (by law) as being part of the required RE%.

Seems crazy that the CA government has mandated a high (I believe it is 50%) of the POCO's power to come from RE by year 20XX but will not count any power generated by home systems as part of that total RE%. Seems like the Gov is double dipping for as much RE as possible.

Bravo SunEagle! Great points. I hope that some of these PUC's see that and adjust accordingly. Afterall, why not include the whole team in solving the problems? I.e. Solar owners and POCO's together.

Tim D,
Melbourne, FL

[SunEagle]

Bravo SunEagle! Great points. I hope that some of these PUC's see that and adjust accordingly. Afterall, why not include the whole team in solving the problems? I.e. Solar owners and POCO's together.

Tim D,
Melbourne, FL

The problem in FL is that there isn't any mandate from the government telling the POCO's to generate x% from RE.

And if it wasn't for all the bad press lately our POCO's would have not made any statements about installing all the new MW pv systems. My guess is that the price of pv has come down enough that building a solar generating system may actually be less money (or hassle) then building a Nat gas fired plant.

[deyounte]

The problem in FL is that there isn't any mandate from the government telling the POCO's to generate x% from RE.

And if it wasn't for all the bad press lately our POCO's would have not made any statements about installing all the new MW pv systems. My guess is that the price of pv has come down enough that building a solar generating system may actually be less money (or hassle) then building a Nat gas fired plant.

Hi SunEagle,

You are right about the FL PUC not having such mandates, but some of the POCO's are putting in modest solar installations on their own anyways. FPL comes to mind as one of them. It may be the cost of solar is low enough at the commercial level. I hear that the commercial cost is about $2/Watt installed. I don't know Corporate taxation either. There could be some tax benefit to using RE that I don't have visibility into. What I find interesting though is that the POCO's are installing RE and are incurring the control issues with uncontrolled sunshine and wind that they complain about from the home RE systems.

Tim D.
Melbourne, FL.

[Sunking]

Plain and simple Net Metering Laws are mandated, they are not voluntary or based on any biz model. Utilities are forced to offer them. What most people do not know is the Utilities are allowed to jack up the rates to make up for the losses. In other words an invisible tax on the poor who cannot afford to take part. People who can afford solar can do so without others people money subsidizing their luxury.

[8.4]

In other words an invisible tax on the poor who cannot afford to take part. People who can afford solar can do so without others people money subsidizing their luxury.

I think you meant with other peoples money, which I agree with. First off, that 30% tax credit money came out of other peoples pockets. Then in my state you don't have to pay sales tax on the system, which is money out of state coffers. Finally, the power company pays me at least 6 times the cost of what they could purchase it for elsewhere. The state reimburses that so it's spread statewide. Other's I've read gets $2/watt rebate. That money has to come from somewhere. Most of these incentives just keeps the installation cost higher than it should be in my opinion, and just goes to the installers.

As for buying peak/off-peak there could be additional costs to the POCO because they can't forecast how much solar they can count on having or not having. Don't have enough power causes them to buy (or start up more units) in real-time which would be more costs. Too much and they would have to shut down units or operate units at non-optimal efficiency levels, causing more wear and tear and costs. I think solar is nice, but we're foolish if we don't think others are subsidizing our costs.

[deyounte]

It has nothing to do with climate change.

A utility incurs costs in providing power to people. Their pricing structure is designed to allow them to provide energy while making some money. (Usually not a lot; public utilities are scrutinized pretty carefully when it comes to rate hikes, expenses etc.) Depending on their business model their costs may include fuel, generator fees, infrastructure, insurance etc. Their income is via their tariffs.

If one guy puts solar on his roof, then not much changes from the utility's perspective. Under net metering laws they don't get as much money from him, but it's a drop in the bucket.

But let's say a developer opens a huge new housing development. Every single house has solar that will cover 100% of their use under net metering. Environmentalists celebrate. But the utility now has a problem. They have to, by law, provide electrical service to these homes. They need new transmission lines, transformers, circuit protection devices, monitors etc. They may even have to start building new generators. But they are going to make almost no money off these new homes due to the net metering laws. And in fact they may have to install MORE infrastructure than they normally would, since solar maximum power is going to be the same for all the people in that development - so power will peak all at the same time, which is worst-case from an infrastructure design standpoint.

So what do they do? They have three choices:
-Eat the loss and continue to do so until they go bankrupt. (Would take a lot of solar to do that, but we're installing a lot of solar.)
-Increase rates on people who use solar power
-Increase rates on people who don't use solar power

What's fair? Solar owners will tend to say "increase everyone else's rates; I am being virtuous!" Non-solar owners will tend to say "I didn't ask these people to install solar; why am I being fined because of their decisions?" (Actually both will say "I don't care as long as you don't raise my rates" but that's not very useful in terms of making the above decision.)

Hmmm. It was mentioned above that a new housing development with solar is added. That's a new connection to the system. Doesn't change the load for any existing connection by itself. Let's look at that case.

So what is more harmful to the POCO and other customers? The new development is grid connected with the solar? Or the new development goes off-grid with the solar with some kind of storage? I submit to you that the "grid connected" solar is a benefit to the POCO with "trickle-down" benefits to the end customer. See my post where I discuss that the POCO makes money off the on peak/off peak cost spread which would have the effect of driving down the POCO's overall cost to supply energy. Anything that drives POCO costs down should in theory take the pressure off the need to increase rates for the customer base. ("Trickle down" if you believe that.)

Another point is that the rate structure should (but does not always) include a base cost for the connection and separately a cost of the energy. The POCO should (in a fair world) still be allowed to recover the costs for that connection even if they are not selling muc power. They are providing an energy banking service to the solar owners via net metering. I live in FL and my local utility has base rates and tiered energy rates. I don't think all utilities are structured that way, but that would be a bit more fair to the POCO and thus would take the pressure off of the need to raise rates to the other customers. Note that my base rate is pretty small, but that infrastructure stays in place for decades, so the amortization spreads it way out..... Looking at it another way, the POCO benefits from small solar, so they should want that connection to exist. They have a vested interest in small solar providing "Peak shaving" and low cost energy during "on peak" hours. (Remember. Some of these same POCO's are building their own solar.) It also injects the power locally and the energy would essentially be used locally (during on peak hours) thus reducing the need to upgrade the transmission system and add new power plants. This is all about avoided costs.

In terms of the POCO going out of business. Not in general if the POCO and PUC are working together correctly. The POCO's are still in general "monopolies"(in spite of 20 years of deregulation) regulated by their PUC's or similar governing bodies. If theory above holds, there would be no real pressure on the POCO financially, but let's say there is. The POCO and PUC will raise rates to ensure the integrity of the supply of power to the service area.

So, as a person with solar. I can either share the benefits via "grid tie" to the POCO (and by "trickle down" to other customers) via the on peak/off peak cost spread and avoidance of capital improvements to the grid, or I can go off grid and keep it all to myself. The POCO loses a customer and their load goes down and they no longer get any revenue from the base connection or the energy from me or my family, they don't get the peak shaving that the solar would provide, they don't get the locally injected energy for the rest of the customers during on peak hours to reduce the need for capital expenditures to transmission and generation.... Having said that the off grid thing won't happen for me in the forseeable future because it isn't economical to pay for the storage to do that, but it is an interesting way to look at the argument.


Note that there is a whole separate aspect that I've avoided to date and some have touched on it throughout this thread. That's about the noise that undependable RE cause on the POCO grid. I'll write about that separately and later.

Tim D.
Melbourne, FL

[jflorey2]

I submit to you that the "grid connected" solar is a benefit to the POCO with "trickle-down" benefits to the end customer.

Yes. There are some benefits - (some) peak shaving, (some) reduction in powerline heating on hot days, ability to meet government renewables targets. However, a dispatchable peaker is far more useful to a utility, which is why they are willing to pay higher prices for it. Also, as more solar comes on line, we start to see the opposite problem - the "duck curve" - that costs utilities more to have to deal with.

In the long run I think we will see higher base rates for everyone with a consequent reduction in per-kwhr prices for everyone, such that the average consumer's price stays about the same. The utility will then pay some very small price (say half of what it pays for base load power) for solar power, per its reduction in value due to its unreliability.

[deyounte]

Yes. There are some benefits - (some) peak shaving, (some) reduction in powerline heating on hot days, ability to meet government renewables targets. However, a dispatchable peaker is far more useful to a utility, which is why they are willing to pay higher prices for it. Also, as more solar comes on line, we start to see the opposite problem - the "duck curve" - that costs utilities more to have to deal with.

In the long run I think we will see higher base rates for everyone with a consequent reduction in per-kwhr prices for everyone, such that the average consumer's price stays about the same. The utility will then pay some very small price (say half of what it pays for base load power) for solar power, per its reduction in value due to its unreliability.

jflorey2,

Good. Good. Now you're branching out into the other details....

Area Control Error (ACE) - Is a measure of how closely the energy supply meets demand in near real-time (measured and controlled on the order of periods of 1 to several seconds). There are a few ways this is measured (system frequency or net interchange of energy with other utilities, or a combination of both), but in general RE can be a big cause of this error due to the undependable nature of sunshine and wind. I.e. It causes the overall supply of energy to be bumpy which is not desireable and has to be controlled. As the world moves toward RE and away from fossil fuels. The POCO's will have to deal with this regardless of whether I buy my own RE or the POCO or its' neighbors buy it. It's just going to happen and they have to find a way to deal with it. To eliminate/control the ACE value you will vary the Generation (most popular) and in some cases you can also vary the Load (most methodologies for load control are newer technologies).

A. For Generation Control: One way they do that is by using what you are calling "dispatchable peakers". Typically, these can be natural gas powered gas turbine generators which are not necessarily cost effective. (That's why they are called "Peakers" and why they are not used for base-loading of energy on a steady basis). Alternatives to that are to use any "dispatchable" powerplant that can follow control signals such as coal plants, natural gas fired boiler plants, oil plants (rare), and nukes. You are correct that this is a cost to the POCO. I submit that the POCO's have to deal with this issue caused by RE regardless, but you are right, there is a negative here.

To add a finer level of detail. There are different levels of "dispatch" (meaning control of) generation.

1. There is what is called "base dispatch" where the control system is simply trying to meet the base load of the system. This part of the energy equation rises and falls during the day due to load usage patterns across the system. Utilities will typically use hydro (which usually has water or reservoir limits preventing it from being rapidly changed), nukes (which are best left in a mostly steady state output) and coal plants for base "dispatch" generation.
2. Then there is the froth on top of the base dispatch which has a number of names, but it is often called the "Regulation Dispatch". This is the part that typically uses those "dispatchable peakers". These peaker generators typically are meant to quickly increase or decrease generation with the intent of eliminating the "ACE" previously mentioned.

B. For Load Control. There are some POCO's that can send out signals to actually reduce or eliminate selected loads. The utility that services my house has a capability where they can shut off my air conditioner/heat pump and/or my pool pump to vary the amount of load I am causing. The agreement I have with them only allows them to do it for a period of time before they have to turn them back on again. Some POCO's can actually send out price signals to vary loads. There some terminologies such as "Advanced Load Control System (ALCS). "Load Management" and more that are used to describe the capabilities to do this at a POCO. Right now I don't believe that this capability is used at a level that would supplement "peakers", but would be more about ensuring that if the ACE peaks and the base load were running the risk of exhausting the total available supply - thus causing a shortfall in electricity. I.e. These are more to ensure that the supply is safe (or has enough reserves). This could happen if the POCO loses too much base load generation or if the load on the system exceeds expectations of the ability of the system to supply that load.

Gosh this is fun to talk about....


Tim D.
Melbourne, FL

[SunEagle]

jflorey2,

Good. Good. Now you're branching out into the other details....

Area Control Error (ACE) - Is a measure of how closely the energy supply meets demand in near real-time (measured and controlled on the order of periods of 1 to several seconds). There are a few ways this is measured (system frequency or net interchange of energy with other utilities, or a combination of both), but in general RE can be a big cause of this error due to the undependable nature of sunshine and wind. I.e. It causes the overall supply of energy to be bumpy which is not desireable and has to be controlled. As the world moves toward RE and away from fossil fuels. The POCO's will have to deal with this regardless of whether I buy my own RE or the POCO or its' neighbors buy it. It's just going to happen and they have to find a way to deal with it. To eliminate/control the ACE value you will vary the Generation (most popular) and in some cases you can also vary the Load (most methodologies for load control are newer technologies).

A. For Generation Control: One way they do that is by using what you are calling "dispatchable peakers". Typically, these can be natural gas powered gas turbine generators which are not necessarily cost effective. (That's why they are called "Peakers" and why they are not used for base-loading of energy on a steady basis). Alternatives to that are to use any "dispatchable" powerplant that can follow control signals such as coal plants, natural gas fired boiler plants, oil plants (rare), and nukes. You are correct that this is a cost to the POCO. I submit that the POCO's have to deal with this issue caused by RE regardless, but you are right, there is a negative here.

To add a finer level of detail. There are different levels of "dispatch" (meaning control of) generation.

1. There is what is called "base dispatch" where the control system is simply trying to meet the base load of the system. This part of the energy equation rises and falls during the day due to load usage patterns across the system. Utilities will typically use hydro (which usually has water or reservoir limits preventing it from being rapidly changed), nukes (which are best left in a mostly steady state output) and coal plants for base "dispatch" generation.
2. Then there is the froth on top of the base dispatch which has a number of names, but it is often called the "Regulation Dispatch". This is the part that typically uses those "dispatchable peakers". These peaker generators typically are meant to quickly increase or decrease generation with the intent of eliminating the "ACE" previously mentioned.

B. For Load Control. There are some POCO's that can send out signals to actually reduce or eliminate selected loads. The utility that services my house has a capability where they can shut off my air conditioner/heat pump and/or my pool pump to vary the amount of load I am causing. The agreement I have with them only allows them to do it for a period of time before they have to turn them back on again. Some POCO's can actually send out price signals to vary loads. There some terminologies such as "Advanced Load Control System (ALCS). "Load Management" and more that are used to describe the capabilities to do this at a POCO. Right now I don't believe that this capability is used at a level that would supplement "peakers", but would be more about ensuring that if the ACE peaks and the base load were running the risk of exhausting the total available supply - thus causing a shortfall in electricity. I.e. These are more to ensure that the supply is safe (or has enough reserves). This could happen if the POCO loses too much base load generation or if the load on the system exceeds expectations of the ability of the system to supply that load.

Gosh this is fun to talk about....


Tim D.
Melbourne, FL

Nice to see someone else with knowledge about the way power is generated and (sometimes painfully) distributed.

I also have "load control" on my AC & pool pump. I use to have it on my water heater as well until I replaced it with a solar thermal unit. It is still nice to get a few bucks back each month for allowing my POCO to briefly shut down a couple of loads should the need arise.

[deyounte]

Nice to see someone else with knowledge about the way power is generated and (sometimes painfully) distributed.

I also have "load control" on my AC & pool pump. I use to have it on my water heater as well until I replaced it with a solar thermal unit. It is still nice to get a few bucks back each month for allowing my POCO to briefly shut down a couple of loads should the need arise.

Hi SunEagle,

I was on a roll on my previous post, but what I wrote isn't completely true.....

I've got to correct myself a bit on my own load control. "I did have" it. I needed to remove it over the course of the last year. It was on my 3 central heat pumps, my water heater and my pool pump. I needed to take it off my water heater because I went to a "heat pump" water heater. Apparently the heat pump has problems if the load control is activated. It apparently only takes down one leg of the 240v and that would have caused problems for the heat pump. Similarly I had to take it off my central heat pumps as I replaced one with a 20 SEER variable speed heat pump. That too had an incompatibility. I'm getting ready to replace the pool pump with a variable speed unit too. In the end I'll be left with none of my units on my POCO's load control because the newer technology won't work with it. I think when they take out one leg, the remaining leg will continue to operate on some of these units and can "burn them out"(?). I actually haven't researched this yet, but I took it at face value and just had the POCO take it all out.... Made me sad. I had it on the system at this house and a previous house for about 10 years. I never noticed that they ever activated it. I.e. Gain with no pain. It was giving me about a $10/month discount.

I've got to clarify my statement in 'B' on my previous post. The "Load Control" isn't usable for ACE control at all. It is fine for ensuring that the supply reserve isn't cut into but that's about it. Important as maintaining reserve supply capacity is,this kind of load control simply can't track the noise in realtime that is ACE. The realtime RE problem is all about ACE correction. I.e. Right now the only real solution is to have a portion of generation set to correct ACE which is a bit costly because it is like having a sports car with the driver "jazzing" the accelerator and brake all the time. Some utilities have or are building pumped hydro storage which is a kind of artificial dam/reservoir. The idea has been around for a while. The industry is leaning toward using this as part of the solution by filling the reservoir when energy is cheap (at night?) and utilizing it during periods when it is needed for cost (and maybe for ACE control in some cases). In terms of using those for controlling ACE, they need to have approval to dump water in an uncontrolled way into whatever waterway is at the bottom of the dam.

Tim D.
Melbourne, FL