California's New TOU rates based on Income and CA Solar future

[DanS26]

Well yeah.....unwinding the unintended consequences of bad policies in the past is a real b$tch and very difficult to do......just don't touch my subsidy or make me pay more with "additional BS costs".

It is a true mess and going forward it is going to get messier.

[Reid1boys]

Two significant processes are involved here.



How do we fix this?......get rid of the subsidies and pay the homeowner the wholesale cost of excess power produced on a real time basis, There is a big difference between selling power to the grid at 10am versus 4pm.....and yes if you want to buy power from the grid at night then you have to pay a fixed cost to pay for the transmission infrastructure that you are attached.

Whatever rules they propose and pass from today moving forward is what it is. So as a possible solar owner, i could do the research and decide whether those rules make it worth it to me to invest in solar.

But what they are doing is a bait and switch. In 2017 I looked at the rules put forward to us, researched costs and decided to agree to their deal. Now, 6 years later they say... well hold on a minute. They have already increased my monthly fixed charge to be hooked up to the grid to $30 dollars per month and now they are essentially admitting defeat in past attempts to change the rules for people on NEM 1.0, so they approached it from a different angle. They say... yea, ok, we will not change the rules for how you are credited for each KwH you produce, but we want to charge you a flat monthly fee, based upon your income to make things more 'Equitable," on for low income.

Huh.... no, you mean since you failed to go back on the deal you made, you are gonna add some additional BS costs that will impact solar owners far more than any other customer. Lowering the per KwH cost for electricity will help those who buy YOUR electricity, but it will crush those that dont.... which is exactly what they wanted. They wanted solar owners to start paying again since many dont pay much at all and that hurt a large source of revenue for them.

Total BS and I look forward to seeing how the lawsuit plays out.

[bcroe]

I think I keep hearing, price paid to private PV owners for kWh is
way less than they can buy them for, to cover the transmission
costs. EXCUSE ME, but the power I send to the grid goes directly
down the street, SAVING the Po Co the cost of sending from their
plant. Therefore the transmission argument is invalid.

Of course I am getting 1:1 price on our plan, since there is direct
kWh trading, no purchase money involved. Bruce Roe

[DanS26]

Two significant processes are involved here.

First, consumers, from the early days of electrification, were not informed nor charged for the difference of the cost of produced power versus the cost of delivering power. Two very different cost structures...one is variable cost and the other fixed cost. In the simplicity of charging one cost of a kWh the seeds of our current problems were sown.

Second, the idea that to subsidize and encourage solar production at the residential level the regulators required POCOs to pay retail for a kWh instead of wholesale for that power. That ruling aggravated and exposed the difference in cost of producing power power versus the cost of transmitting power.

How do we fix this?......get rid of the subsidies and pay the homeowner the wholesale cost of excess power produced on a real time basis, There is a big difference between selling power to the grid at 10am versus 4pm.....and yes if you want to buy power from the grid at night then you have to pay a fixed cost to pay for the transmission infrastructure that you are attached.

[Reid1boys]

I think it will lead to more zero-export systems and/or grid abandonment, and utiltiies will be effectively shooting themselves in the foot.

For years the rallying cry for both utilities and anti-solar people has been "solar is for the rich and it just moves the cost onto the poor! Now the poor have to pay for all the transmission lines/transformers/generation! UNFAIR!" Their solution (at least here) has been NEM 3.0, which disincentivizes grid tie unless it has storage associated with it, and has means-based fee structures.

Problem is that the utility (currently) has no way to disallow zero-export systems, and these will become more and more commonplace under NEM 3.0. If utilities try to make up for a further drop in income due to these systems by charging more of a flat rate, we are going to see more and more grid abandonment, where customers effectively run off grid, This used to be illegal, but laws are changing to allow it. It's now legal in California (albeit with a huge set of permitting requirements) although it is still illegal in most of Pennsylvania.

As more people do this it puts utilities into a death spiral, where grid abandonment requires higher prices for everyone else (to pay their fixed costs) which leads to more abandonment.

At every solar show I've been to in the past ten years there are talks about how the current utility model doesn't work any more and there has to be a change. I have yet to see a promising solution.

I agree with everything you said..... and grid abandonment might cost me more, but I would do it before I let those clowns tax me for not being poor.

[Reid1boys]

What's your source of information ? Reliable and recognized or some scattershot, half-baked, semi-informed social media slug ?
Also, who's doing the voting ?
Latest I heard/read about from an established source was from PBS back in Sept. and the wording was full of "mays", "maybes " and "proposed" statements.

Get informed. There's a probability that this, or something like it may happen some day, maybe soon, but no one - including the CPUC, the I.O.U.s, the solar lobbies, you, me or anyone else knows what form - if any - such a change might take.

.

Have you read Ca assembly bill 205? It has already passed. The bill required the utilities to come up with income based utility bills. The three main utilities have done so. The cpuc is to vote on this in the near future and the LAW is to go into affect.... I think I read in summer of 24. This isnt posturing, this isnt ramblings, this is already law. So go get informed as you said and read the bill.

[SunEagle]

It seems to me that the CA government got everyone excited to go solar only to let the PUC then make changes in their favor. No wonder people are leaving that state to go somewhere else.

[Reid1boys]

The utility monopolies want to maintain control by eliminating competition from small solar systems owned by private citizens. For 400 years the process is one of having those in power making the rules to privatize the public commons (in this case power from the sun and wind). The California PUC is controlled or captive with regard to the utilities it is supposed to regulate but never has.

What has been surprising and disappointing is how the somewhat progressive Governor Newsom has allowed the NEM 3.0 and monthly charge to go into effect when the net result will be less solar power available to the grid. A homeowner can install a solar power system in a matter of months and no new transmission capacity is needed. The massive solar and wind farms take years to get into operation and new transmission lines (and sources for wildfires along their paths) which is of no concern to the people who own and operate the utility companies.

Gov Newsome was stuck. The utilities came up with the BS argument that the wealthy, mostly WHITE upper class solar owners were being subsidized and not paying those charges that were used to upkeep the grid. as a result, those costs were being passed onto to lower income MINORITES, meaning people of color. So how could you possibly vote for something that was not fair at the expense of minorities? The utilities were smart in how they framed their arguments.... even though I say it is all BS.

Bottom line was the state gave me a 20 year deal to buy solar. I did what they asked, now they want to go around that deal by charging me a flat fee, essentially another tax based upon my income. They know that those owning houses in certain areas that have solar are going to be on the upper end of the income scale, so they know exactly who will and who wont be paying this tax.

I will be a part of any lawsuit suing the state over these new rules.

[Reid1boys]

This isn't any more popular than it was the last time it came up and died.

This has already been passed by the state legislature. Only the details are to be determined by CPUC. This IS HAPPENING. There will no doubt be lawsuits filed the day this goes into effect. Imagine going to the movies and having to slide a card into a reader that shows your yearly income. Then imagine the price of the movie being determined based upon your ability to pay. So some may pay 35 dollars to get in, while others only pay 5 dollars to get in. Yea... that sounds fair.....smh.

If they do in fact do this, they are going to suffer some unintended consequences in the future. Fact is, anyone living in san Diego that owns a home and put solar on the roof is going to be placed in the upper income tier and be required to pay the max TAX. Watch how many owners buy batteries and try like hell to completely get off the grid.

I currently have NEM 1.0 so i get a 1 for 1 credit nd have no need to get a battery. if they start taxing me based upon my income, I might look into getting a battery to ensure I never export a single KW of pwer into the grid. Would it be foolish from a financial standpoint? yes, but Im like that. i would do it just to make a point and screw over the utility companies wanting to use my power. Watch a boatload of solar users do this and they will be right back where they were a decade ago.

[J.P.M.]

Exactly. That's what we are going to be facing.

Utilities sit in a strange in-between land between corporations and public services. They are private companies, and so want to make as much money as possible. But because of their government-enforced monopoly status they get saddled with a lot of rules, often made by unelected public utility commissions. It has gotten so bad that, years ago when we were working with SDG+E, one person there said "honestly there are some great ideas out there, but unless someone passes a law that requires us to do it, we can't."

So another option is to go all the way in one direction or another.

One option would be to go all in on privatizing things. Have one right of way that can be shared three ways, in a similar way that high voltage and medium voltage shares poles today. Government auctions off right-of-way for big $$ which supports the regulatory apparatus. Then let the market decide.

Another option is to go all government. The government provides power, period, paid through via taxes. A lot of downsides to this, but one upside is that there is no conflict between a government that wants X and a private corporation that wants Y (where Y is usually "more profits.") And of course people can vote for leaders who tout specific power policies.

A third is to have the government maintain just the transmission system; let anyone draw from it (customers) and let anyone feed to it (generators.) A billing system lets you purchase X kilowatt-hours from generator Y, with concatenators offering power purchase plans with specific deals.

Well, from what I think I might know, maybe getting closer to gov. run might be worth a shot.

A short tale:
I've got 2 homes. One in N. County San Diego with power from SDG & E - an I.O.U.
That home has a 5 STC kW PV system.
If I was on T.O.U. rates with that home and without the 5 STC kW PV system, my average per kWh rate for electricity would be ~ $0.42/kWh.
My second home is out in the desert in La Quinta and served by Imperial Irrigation District (IID), a non-profit municipal utility.
The average cost to me for a kWh from IID is mostly/semi-flat at ~ $0.20 with a $10.00/mo. service charge.
I believe those numbers and their relative magnitude speak for themselves.


IID has a net billing (not net metering) program but it's not as lucrative for residential PV owners as the NEM programs that are mandated for the I.O.U.s. But the IID rates are lot lower and a whole lot easier to make sense of.
IID's buyback rate per residentially generated kWh is essentially the same as the rate they buy power from their regular sources/suppliers.
All the energy delivered/bought by all residential customers including connected PV owners is at that ~ $0.20/kwh rate.
All the energy sent to the grid is currently bought at $ 0.0698/kWh.
What's used on site offsets electricity not bought at the $0.20/kWh rate.

There isn't a lot of residential PV in IID territory. My guess as to why is 3-fold with the biggest reason being with buyback rates that low it isn't cost effective.. The other two are that most folks in IID territory too poor to afford PV or rich enough so that the otherwise relatively cheap rates don't affect their budgets too much.

[jflorey2]

Added to that will be increased per user share with remaining users less well-heeled to be able to bear that increased share of infrastructure which probably won't be decreasing in proportion to the customer abandonment of the grid by the rich.

Exactly. That's what we are going to be facing.

Utilities sit in a strange in-between land between corporations and public services. They are private companies, and so want to make as much money as possible. But because of their government-enforced monopoly status they get saddled with a lot of rules, often made by unelected public utility commissions. It has gotten so bad that, years ago when we were working with SDG+E, one person there said "honestly there are some great ideas out there, but unless someone passes a law that requires us to do it, we can't."

So another option is to go all the way in one direction or another.

One option would be to go all in on privatizing things. Have one right of way that can be shared three ways, in a similar way that high voltage and medium voltage shares poles today. Government auctions off right-of-way for big $$ which supports the regulatory apparatus. Then let the market decide.

Another option is to go all government. The government provides power, period, paid through via taxes. A lot of downsides to this, but one upside is that there is no conflict between a government that wants X and a private corporation that wants Y (where Y is usually "more profits.") And of course people can vote for leaders who tout specific power policies.

A third is to have the government maintain just the transmission system; let anyone draw from it (customers) and let anyone feed to it (generators.) A billing system lets you purchase X kilowatt-hours from generator Y, with concatenators offering power purchase plans with specific deals.

[J.P.M.]

I think it will lead to more zero-export systems and/or grid abandonment, and utiltiies will be effectively shooting themselves in the foot.

For years the rallying cry for both utilities and anti-solar people has been "solar is for the rich and it just moves the cost onto the poor! Now the poor have to pay for all the transmission lines/transformers/generation! UNFAIR!" Their solution (at least here) has been NEM 3.0, which disincentivizes grid tie unless it has storage associated with it, and has means-based fee structures.

Problem is that the utility (currently) has no way to disallow zero-export systems, and these will become more and more commonplace under NEM 3.0. If utilities try to make up for a further drop in income due to these systems by charging more of a flat rate, we are going to see more and more grid abandonment, where customers effectively run off grid, This used to be illegal, but laws are changing to allow it. It's now legal in California (albeit with a huge set of permitting requirements) although it is still illegal in most of Pennsylvania.

As more people do this it puts utilities into a death spiral, where grid abandonment requires higher prices for everyone else (to pay their fixed costs) which leads to more abandonment.

At every solar show I've been to in the past ten years there are talks about how the current utility model doesn't work any more and there has to be a change. I have yet to see a promising solution.

Jeff: Interesting thoughts, most of which I have some agreement with.

There might be some grid abandonment for the reasons you state and others, but it I'd suggest it'll start with a trickle the same way residential PV started as something of a rarity/hobby/darling for tree hugging weird and the rich.

But to gain widespread public acceptance off grid residential electricity will need a lot of bells /whistles added to it before it becomes as safe, carefree and reliable as grid power has generally become.
That can and may happen, but my guess is it won't be soon and it won't be cheap, pushing the implementation further into the future and also, because of added costs and complexity, farther out of reach of Joe and Jane 6 pack.
Added to that will be increased per user share with remaining users less well-heeled to be able to bear that increased share of infrastructure which probably won't be decreasing in proportion to the customer abandonment of the grid by the rich.

So, I'd agree that the current utility model probably won't work any better than it does now.

I'm not sure how promising it is (or was) but one idea I had many years ago (and probably too late to have any viability now) was for the POCOs to get into the alternate energy generation business on the ground floor both as manufacturers of equipment and as lessors of equipment on a residential scale. That would have eliminated the POCO's current competition from the PV industry (which seems to be abandoning its customers at a somewhat alarming rate anyway, either by going out of business or dumbing themselves down to the point of being useless. They never were that professional or reliable IMO anyway)
There would have been some added standardization to the equipment, the process and the implementation, and all that most likely would have decreased or at least shifted some infrastructure costs. In the meantime, those who wanted to go off grid could still do it but in a way that conformed to better and more organized (read safer) standards.

[jflorey2]

What does everyone think about this?

I think it will lead to more zero-export systems and/or grid abandonment, and utiltiies will be effectively shooting themselves in the foot.

For years the rallying cry for both utilities and anti-solar people has been "solar is for the rich and it just moves the cost onto the poor! Now the poor have to pay for all the transmission lines/transformers/generation! UNFAIR!" Their solution (at least here) has been NEM 3.0, which disincentivizes grid tie unless it has storage associated with it, and has means-based fee structures.

Problem is that the utility (currently) has no way to disallow zero-export systems, and these will become more and more commonplace under NEM 3.0. If utilities try to make up for a further drop in income due to these systems by charging more of a flat rate, we are going to see more and more grid abandonment, where customers effectively run off grid, This used to be illegal, but laws are changing to allow it. It's now legal in California (albeit with a huge set of permitting requirements) although it is still illegal in most of Pennsylvania.

As more people do this it puts utilities into a death spiral, where grid abandonment requires higher prices for everyone else (to pay their fixed costs) which leads to more abandonment.

At every solar show I've been to in the past ten years there are talks about how the current utility model doesn't work any more and there has to be a change. I have yet to see a promising solution.

[Ampster]

I have seen a letter to the CPUC signed by some Assembly members opposed to this fee. That may delay it long enough to give the Legislators time to pass a bill reversing the fixed fee language in AB 205.

[J.P.M.]

From what I've gathered. I'm pretty sure they are voting on this in a few days and some form of it will most likely go into affect in 2026. Likely their will be constitutional challenges in court against it.

What's your source of information ? Reliable and recognized or some scattershot, half-baked, semi-informed social media slug ?
Also, who's doing the voting ?
Latest I heard/read about from an established source was from PBS back in Sept. and the wording was full of "mays", "maybes " and "proposed" statements.

Get informed. There's a probability that this, or something like it may happen some day, maybe soon, but no one - including the CPUC, the I.O.U.s, the solar lobbies, you, me or anyone else knows what form - if any - such a change might take.

Having seen a lot of rate proposals and jiggling since moving to CA, I'd expect a lot of changes, jaw-jacking and backroom shenanigans to take place before the final form of any such legislation gets signed into law.
What's going on now is mostly posturing to set extreme positions. I'd expect a long and drawn out fight in the courts if such a situation as this (possible ?) rate reform becomes law and if so, it probably won't look much like either side's current extreme position.
Such is regression toward the mean.