The rapid cost reductions in renewable energy, particularly solar photovoltaic and wind, are threatening the business model of traditional electric generators around the world, promising much greater capacity for individuals and businesses to self generate power, and prompting a brilliant rebranding of renewable energy initiatives at the state level, under the banner of “Energy Freedom”.
A recent move by Wisconsin utility We Energies to not only raise electricity rates on all consumers but also to add an additional charge on those who produce their own energy and sell it back to the grid has sparked outrage within the state and beyond. Theplan would raise the “fixed charge” on all customers’ electric bills from $9 to $16 a month, as well as reduce net metering — a policy that enables customers with solar panels or other forms of distributed generation to sell their excess electricity back to the grid — and add a new charge on these electricity-generating customers.
The result of such a policy, said Matt Neumann, owner of Wisconsin-based SunVest, would be dramatic: “It would not only end solar but remove the economic viability for any renewable energy in Wisconsin.” Neuman, whose company is the largest solar installer in the state, said the demand charge of $3.80 per kilowatt (kW) per month works out to about $220 per year for a 5 kW system, a deterrent for potential solar customers and an unfair penalty for those who have already chosen to go solar.
And by increasing fixed charges by 75 percent, Neumann said the utility is punishing everyone, even those who have taken steps to reduce their electricity consumption. The proposal also seeks to ban third-party ownership of renewable energy systems, meaning those customers who rent or lease, rather than owning the entire system outright.
Jess Williamson, We Energies spokesperson, said the company is “requesting modest increases that will help us to continue to make improvements to improve and modernize our grid, to meet environmental standards” and cover costs associated with maintaining a reliable electricity system. As for the additional charge and reduced compensation for customers who produce their own energy, Williamson said it’s simply a matter of fairness. “Under the current rates, they really don’t pay their fair share of grid operating costs,” she said. “We’re asking for a demand charge and also asking that instead of buying excess energy at a premium rate, that we pay a comparable market rate.”
Bryan Miller, co-chair of The Alliance for Solar Choice (TASC) and Vice President of Public Policy and Power Markets for Sunrun, said the idea that solar customers, who make up just a fraction of one percent of We Energies’ total customer base, are a serious cost to the company is “another reason this is such a frivolous case.” Miller pointed to recent testimony by the Public Service Commission’s own analyst, Corey Singletary, stating, “in light of the fact that the short-term sales risk to the utility appears fairly low, and given that the utility has not presented any evidence as to why such a dramatic increase in customer charges must be undertaken in this proceeding … I believe the Commission may wish to consider holding off on any large increases to fixed charges in this proceeding and instead open a separate generic investigation.”
We Energies’ current rate request comes as its customers already pay the second-highest electric rates in the state. “Since 2005, We Energies’ residential bills have increased 51 percent, while inflation is up 22 percent,” the Milwaukee Journal Sentinel reported. The utility’s parent company, Wisconsin Energy Corp., is currently seeking approval for a $9.1 billion acquisition of Integrys Energy Group — a move that has raised suspicion well beyond Wisconsin.
Meanwhile, Tea Party Activist and Renewable Energy Activist Debbie Dooley is touring the state, urging citizens from the left and right to rise up and defend their freedom to generate their own power, both electrical and political.
Is it strange for you being so outspoken on this topic since solar and distributed generation advocates are usually seen as liberal or environmentalists?
A lot of companies with fossil fuel interests try to spin it that way. It’s totally ridiculous. If you can’t discredit the message, you go after the messenger.
This is not a liberal issue, it has become a national security issue for our country. The grid can be attacked. Look at the Silicon Valley attack – they opened fire on some of the substations with AK-47s, took them down, and they just vanished into the night. Our grid is so centralized, it’s a national security issue.
When I started doing research and seeing what We Energies is trying to do in Wisconsin, I was appalled. Here you have a giant utility to trying to protect their profit margin by taxing the sun and taxing manure. You can call it whatever you want to, it is a tax. I think that is totally ridiculous.
Do you think your support of solar has extra significance since you are a high-profile conservative activist?
I do, I believe conservatives who believe in the free market would be receptive to the right message. If you go out and say we need solar because of climate change and you hate coal, that’s the wrong message. If you go out and hold elected officials accountable for supporting these monopolies, that’s something conservatives will respond to.
Do you have solar panels or would you like to get them?
I went through a divorce two years ago so I’m renting a house, but you can bet when I purchase a home it will have solar panels. You would be really surprised about conservatives, how many are asking me about solar panels. It empowers the individual and it’s good for the environment. To me conservation is conservative.
How do you feel about wind energy, since much wind is generated by these large companies?
I would support wind energy as well, though wind does not empower the individual like solar does. You can put solar panels on your rooftop, as long as you have daylight and a battery you can power yourself. It’s harder for the individual to do that with wind.
I was at the gym yesterday, watching TV on the treadmill, looking at a report on the History Channel that talked about sugar cane in Hawaii that was used to generate electricity. Anyway we can be energy independent, I’m all for it. An all-of-the-above approach.
Does Republican opposition to taking action on climate change complicate your mission with this message?
It does. I don’t believe in excessive regulation, like all these regulations we’ve seen with EPA the past few years. I would prefer to allow energy to compete in the free market on a level playing field and let the consumer decide what is best.
I fully believe energies that hurt the environment should be taxed. I don’t believe in a carbon tax, I believe in a cleanup fund like with the BP spill in Gulf.
I’ve advocated from the beginning to cut out massive subsidies that all energy forms have received. Some of the same conservatives that point a finger at Solyndra, they failed to point out the massive subsidies coal and nuclear have been receiving since the 1930s. That smacks of hypocrisy. If you’re going to complain about subsidies for wind or solar, why are we still subsidizing nuclear and coal? Subsidies are government’s way of picking winners and losers.
How have such statements been received when you talk to Tea Party or conservative audiences?
I talked at the Tea Party convention and said government should stop picking winners and losers. I got thunderous applause. People are really receptive to the right message when you lay the facts out.
I’ve been attacked by Koch brothers-affiliated groups. [Some] said I was a fake Tea Party person. I just laughed. I am a conservative. There is no way they can paint me as a liberal, even as a moderate – I am a right-wing conservative.
But I’m extremely passionate about alternative energy. I’m a grandmother, I became a grandmother in 2008 with the birth of a grandson who is the light of my life. I want him to have a clean world, I want him to have parks and green space. I don’t want him to have to worry about terrorist attacks. I want him to be able to breathe clean air. I want him to be able to generate his own electricity if he so chooses.
If he says, “I want to generate my own power and be self-sufficient,” I want him to have the ability to do it.
What makes utilities nervous is that the contagion has spread beyond the obvious intense-solar-resource regions of the south and west .
A bipartisan group of Michigan lawmakers has introduced a bill package meant to encourage renewable and distributed energy development for utility customers.
The four-bill package, dubbed “Energy Freedom” by its sponsors, tackles issues like net metering, microgrids, fair-value pricing and community renewable-energy gardens.
Its sponsors, which include 12 Democrats and five Republicans, say it’s a different approach to expanding Michigan’s renewable energy portfolio, doing so on a small-scale level rather than a statewide mandate to be achieved by utilities. Utilities here are on track to meet the state’s 10 percent renewable standard by 2015.
After being considered for roughly a year between legislators and experts, both of the bills were introduced in mid-June and have been referred to the House Committee on Energy and Technology.
“I just want to make sure we do everything we can to promote renewables and clean-energy development in Michigan,” said state Rep. Jeff Irwin, a southeast Michigan Democrat who is either sponsoring or co-sponsoring all four of the bills. “An (RPS) number isn’t the only thing I’m looking at. I’m particularly interested in fighting for some consumer-side benefits, making changes to the law that make it easier for citizens and business owners to plug into the grid and make it work.”
Such small-scale, distributed forms of generation make the state more “economically and otherwise secure,” Irwin added.
Michigan’s laws for small-scale energy generation “stifle innovation,” he said.
“…Williamson said it’s simply a matter of fairness. “Under the current rates, they really don’t pay their fair share of grid operating costs,” she said.”
Curious concept. If they use less electricity, but still buy some from the utility, how are they not paying their fair share? Are grid operating costs not included in the cost of electricity?
If they use no electricity from the utility, then they are not using the grid – so why should they pay the utility anything?
If they make enough electricity to resell some of it back to the utility, the utility is still making a profit on that transaction, because what they pay customers is never the true value of their cost savings.
Ironically, one does not see homeowners, who sell excess electricity to the utility, demanding that the utility also pay them a fee for the upkeep of their own infrastructure, do they? No, they just get paid pennies on the dollar for the electricity they sell back. Their “grid” doesn’t exist, according to the utilities.
Meanwhile, back at the ranch, this all goes to show why a business model built on fossil fuels simply makes no sense for renewables.
“If they use no electricity from the utility, then they are not using the grid – so why should they pay the utility anything?”
Like insurance, you pay for its availability if needed, unless you can truly go off-grid.
Contributing something to maintain the grid is to be expected, but it should be fair and reasonable, not the extortion that WE is trying to push through.
Since when is a utility like the insurance industry? How about a corner store – should I pay them for their upkeep if I don’t shop there?
What I would like to do is pay my utility with my tax dollars.
We should all be owners of a National Renewable Energy Utility, whose mandate is to start building nothing but large-scale renewable energy projects until all our energy needs are met by it. We will spread out the repayment of those infrastructure costs over a couple of decades, and then when they are payed off, we can all enjoy all the electricity we could possibly want for the price of sunlight – basically zero.
See, THAT is a business model that works for renewable energy. Well for me, at least.
I triple that!
Then you are also going to have to find a way to either consume or store that energy as it’s made, and deal with periods of slack production. You’ll find that this is a lot harder and far more expensive than you think. The grid operators do things the way they do for good reasons. It helps to understand them before you decide to turn everything upside-down. Mixing the wrong things in the chem lab can get you injured or killed. Have you looked at the fatality projections for a widespread grid outage from e.g. a Carrington-level solar flare? Ripping things up based on faulty assumptions is equivalent to doing it deliberately.
So, building the renewable energy infrastructure we all agree we need is so dangerous, we should think of it like a chem lab explosion?
Building more of the same successful technology that has been in use around the world for decades is going to “turn everything upside-down” is it?
Renewable energy requires fatality projections now – who knew?
Dreaming about free public electricity is the same as deliberately “ripping things up”, is it?
Please tell us all you are joking?!? Please tell us you are not an industry shill?
Re-parented the reply to GingerBaker for readability: http://climatecrocks.com/2014/09/15/wisconsin-utility-moves-to-block-energy-freedom-tea-party-star-takes-exception/comment-page-1/#comment-63167
Some states are considering value of solar ( VOS). Minnesota did and came up with a rate higher than the retail rate because solar displaces expensive peak daytime generation from gas turbines. The most significant effects of solar are to reduce blackouts, increase reliability, lower rates, and reduce transmission and distribution costs. Utilities in Arizona switched from opposing solar to selling it recently. They simply don’t want the competition and they want to protect their bad investments in large coal plants which are now underutilized. Wisconsin energy is one of the worst offenders. Hardly surprising in a Scott gov, Koch controlled state.
http://www.midwestenergynews.com/2013/05/10/commentary-time-to-reconsider-baseload-power/
Extortion? $3.80 per kW is less than a third of typical industrial demand charges ($12.55/kW) around here! Look at the rate schedule I posted below.
If you don’t know what it costs to run a utility, you have literally no idea what’s reasonable or fair.
Grid operating costs for residential and small-business consumers roll fixed grid costs into the per-kWh charge, assuming typical usage patterns. If you have a radically different consumption pattern, you could pay a lot less than your fair share.
Larger grid customers are billed in a way which measures, rather than assumes, their usage pattern. Here is an example from near me: $12.55 per peak kW during the month, plus 4.3¢/kWh. So as you can see, supplying 1 kW 8 hours a day for a whole year (8760 hours) costs about $125. Being ready to supply that 1 kW costs another $150.
Yes, they are using the grid. They’re keeping it on standby; the equipment has to be there and running in case they start pulling power. If they were using batteries instead, they’d be paying for those too.
If the utility is made to pay more than about that 4.3¢/kWh for power fed back to the grid, the consumer is being paid for the part of being on standby—which the consumer is manifestly not doing. The consumer is absorbing standby services, not supplying them.
Would it “kill solar” to put grid-tied PV users on a peak-demand/energy billing scheme? If so, then solar wasn’t truly economic in the first place.
It really goes to show you that naïve appraisals based on tariffs written using conventional consumption patterns fail when you change those patterns. When you break things down to the basic elements (peak demand vs. energy, ramp rates, reactive power, etc.) wind and PV leave a lot of external costs. Yes, it’s really a great deal to get paid for something you’re not doing, bu that’s no way to run a railroad. Like lending huge amounts of money to janitors on the assumption that real estate prices can only go up, it’s going to break down sooner or later.
“If you have a radically different consumption pattern, you could pay a lot less than your fair share.”
My fair share? Explain to me how using less electricity by having solar panels is qualitatively different than using less electricity because of conservation?
By your logic, anyone who replaces incandescent light bulbs with LED’s should pay a penalty to the utility, because they are not paying their fair share.
Wow.
I am going to make two contentions:
1) Your understanding of the proper role of utilities in society is skewed. Here in Burlington, VT, our power comes from our municipal utility. They are the largest driver for conservation in the county. Evidently, their mission is self-destructive according to you?
2) Any utility business model for our renewable future that needs to penalize customers for using less electricity, or which stymies the installation of new renewable energy infrastructure, is a business model still based on a fossil fuel paradigm, and must be discarded.
A renewable energy future demands a flexible system dependent on interconnectiveness, where power may or may not be generated anywhere near where it is consumed. It demands a huge up front investment in infrastructure, but then has almost no costs besides maintenance.
This is completely different than a FF generation system, where fossil fuels were moved around to feed local generation plants supplying only local or regional consumption, and huge amounts of cash had to change hands to fund fuel purchases from corporations.
I can not see how a renewable energy system can work without it being a public utility, organized as large regional entities, or, to make more sense, as a single Federal utility.
But then, I am naively trying to blow chem lab technicians’ legs off.
Pardon me, but this is going to be long. Refuting embedded assumptions requires explanations.
Different relationship of peak vs. average. There’s also the “what if everybody did it” issue: what if everyone is trying to feed power back to the grid at noon, and everyone wants peak power to run the A/C and TV and stove at 7 PM?
Straw man. Replacing incandescent with LED cuts consumption what, 85%? It cuts it when it’s dark out as well as when the sun is shining… and mostly when it’s dark out. PV only cuts net load in the hours around noon, and can drive it negative.
Come into my parlor, said the spider to the fly. (rubs hands)
In Burlington, VT, the biggest single part of the municipal power purchases are “short term” (about 45%), much of which come from out of state. Out of state power will be most of Vermont’s power, after Vermont Yankee shuts down in a little over 2 months; at that point, the carbon emissions from Vermont’s purchases will rise significantly. Burlington’s total wind and PV are less than 10% of the total.
BED’s peaking gas turbine (simple cycle) runs on fuel oil. Hardly renewable.
The capacity factor of the Sheffield wind farm appears to be a mediocre 23%. GMCW appears to have run at less than 0.1% capacity factor in 2012.
They’ve based their philosophy on “green”, and failed to accomplish anything close to what they could have. Buying 100% of the city’s base load from Vermont Yankee would have de-carbonized it completely. Then they could have used the wood-burner for peaking (it appears to run about 4400 hr/yr). Frankly, it appears that you don’t understand your own municipal utility.
The example I cited priced peak demand at $12.55/kW per month, and energy at 4.3¢/kWh. Use less energy, pay less. Yet you’re characterizing this as “penalizing customers for using less energy”. It is the exact opposite of the unambiguous meaning of the words I wrote.
WTF is wrong with you? Can’t you read?
What bugs you is that $12.55/kW peak, and the relatively tiny 4.3¢/kWh for energy. Like it or not, just sitting ready to supply power to you costs money. There’s the wires and transformers and the powerplants that MUST be running if you’re going to get power when you flip a switch. Yeah, so you supply 2 kW back to the grid around noon. It’s still going to take the same 12 kW when you turn on your electric clothes dryer (5 kW), central air conditioner (3.6 kW), induction stove top (1800 W per burner) and the plasma TV simultaneously when you get home from work, and your PV won’t be doing very much then. Without 12 kW of generator to devote to you, that power won’t be there. Keeping that 12 kW on tap for you costs about $150 a month in addition to whatever fuel it consumes when you’re actually using it.
Because measuring kWh takes just one meter and isn’t the subject of many disputes, residential customers pay a rate that assumes a typical usage profile and rolls the peak demand cost into a higher per-kWh tariff. But that’s not the real cost structure of electric power delivery. If you decide to consume (or produce) power on a completely different profile, your billing should be different too.
If you’re willing to stagger and limit your usage to keep your peak load down to, say, 3 kW, keeping the generators on-hand would only cost about $38/month. If your PV could generate at the same time that you want your peak power, you could offset that charge with your PV. But it’s most likely that you can’t, unless you use batteries or something like an ice-storage air conditioner.
The actual source of your complaint is that utilities don’t want to pay PV owners the full, combined (energy PLUS averaged cost of peak power) tariff for energy that may be worth little or nothing when it’s actually being generated. Utilities don’t want to PAY PV owners for the privilege of keeping generators spinning to serve them whenever they decide to hit the grid for power they aren’t generating themselves. What you don’t want to admit is that the utilities are right, because net metering isn’t fair. Yes, net metering was intended to promote PV. It did that. But it’s certainly not fair, and it may not even be a good idea. Capisce?
If you want to talk about actual cost structures and ways to cut carbon emissions, I’m game. But if all you want to do is wave a placard declaring “RE GOOD, CARBON BAD” you could be replaced by a trained monkey. I don’t talk to monkeys, or their internet equivalents.
Gingerbaker – you have spotted the logical fallacy in the utility argument. It can be used to argue that those that use less should pay more, because of fixed charges. Really, the utilizes are saying they are a monopoly and they expect payment no matter what they do. Time to de monopolize. Make the grid public and generation open to market competition, IMO. The U.S. grid is a mess. Up to now, Texas was its own grid, with little connection to anywhere else. Hardly modern compared to the inernet. The whole mess goes back to Insull. The fixed charge policy is schizophrenic. At the same time, peak usage is discouraged by time of use metering. The utilities are resisting inevitable change. Not too smart.
No, Arcus. It’s the logical fallacy in your strawman. The utility argument is that there is a fixed cost associated with peak demand, which is true. No matter how low you cut your average, serving that peak costs about the same and you should be made to pay for it. If you don’t want to pay for such a high peak, cut the peak.
If you insist on being billed a flat rate per kWh, expect your per-kWh rate to go up as your peak/average ratio goes up. Lying to yourself about what things actually cost doesn’t change a thing except your blood pressure.
If you really want cheap power, find a way to schedule your loads when there’s plenty of power on the grid and lots of other users don’t need/want it. If you can get interruptible/wholesale rates in the hourly market, you could get a lot of energy for cheap. The question you should ask yourself is, how would this work out for me? Getting a lot of energy in the spring and fall when you don’t need much isn’t such a great deal. Having to stay out of the market in the summer when A/C is a really good idea, and in the winter when heat is essential, seems uncomfortable at best.
I know reason is hard for you, but if you keep with it it’ll eventually get easier.
Re-parenting the reply to GingerBaker (comment-page-1/#comment-63152) for readability:
Two false premises there:
1. “Renewables” as defined by most of the commenters here are unable to perform the tasks required within our resource constraints. That’s physically impossible, not just politically.
2. Given (1), I cannot agree that we need it. On the contrary, I claim that to make the attempt is to guarantee failure (thus both social and climate disaster).
Not knowing what you’re doing is dangerous. Consider another analogy: you’re stranded on a small island. You have small areas suitable for growing the handful of edible plants presently there. If you mess up and try to grow them in the wrong places or at the wrong time, you starve to death.
Define “success” in this context. The global fraction of carbon-free energy stopped increasing around 1995, and today’s “renewables boom” has not produced a clear positive trend. Even Denmark still burns coal for 48% of its electricity, and is barely crawling toward 35% from wind. Aruba’s “Vater Piet” wind farm hasn’t noticeably cut fuel-oil demand independent of the new generators installed recently. Multiple wind farms on Hawaii, with both favorable winds and high-priced oil-fired grid competition, failed outright.
If you define “success” as 80% decarbonization of a fossil-fired electric grid over 5 GW average load (about 1/90 of the USA’s average load), I see exactly zero renewable successes in the world to date. There are CARBON success stories, but they rely on hydro and nuclear. They do not have “renewable energy infrastructures” as you define it.
“Renewable portfolio standards”, forcing all grid users to assume the costs of transmission lines for distant wind farms, and the like are “ripping things up”, yes. The Energiewende amounts to a policy of putting the must-run generators on the grid out of business by forcing them to run at a loss. Turn them off, the grid blacks out. Yes, that is DELIBERATELY “ripping things up”. And if you slap a band-aid on the problem by paying those generators extra to do their essential job, they’re still burning fuel and emitting carbon.
The cynic in me says the Energiewende, RPS’s and all the rest are financial scams. They don’t get the carbon out of our electricity because they weren’t intended to.
We can dream about all sorts of things, but if all you have to build with is wood and glue, you’re just not going to be able to do the things you could do with carbon fiber. We most certainly do have the means to de-carbonize our electric generation, and most of our other energy afterward. The problem is that the successful methods aren’t “renewable”, so we are at a political impasse.
We in the USA were on a fast track to de-carbonize our electricity in the late 60’s and early 70’s, until politics got involved. Here we are 40 years later, and politics is still the problem.
I am as serious as a heart attack, and my only connections to industry are (a) in the past, and (b) ones with no interest in these issues. I am currently looking for work.
Semi-OT: I re-read Poul Anderson’s 1950 short story “Snowball” the other day (included in a 1991 anthology). The balonium invention “capacitite” sounds enough like the EEStor scam that I have to wonder if it wasn’t EEStor’s inspiration. But some of the plot elements made me want to laugh. Re-working an old mill to charge energy accumulators is all well and good, but a mill wheel is typically a few horsepower at most. That’s not enough to run a single suburban block, let alone an entire town’s electric and vehicular loads. The hypothetical town would not have been able to go independent; without grid power, it would have been in dire trouble immediately. And that’s the problem with a lot of the “green” schemes out there: they would be great if the necessary resources were available in anything like the required quantities and such, but they just aren’t.
Worse, we had 60 years to screw up a couple of times until getting it right. That was around 1970. Well, it’s 2014 and we’ve wasted all our time for screw-ups and then some. It’s time to get serious and go nuclear, because the job really needs to be done by 2035 and we don’t have time to invent something new. The record from 1995-2013 proves that “renewables” are not the solution.
Yes, I am serious. My connection is zero. Even the one utility I own stock in sold its reactors years ago.
“The record from 1995-2013 proves that “renewables” are not the solution.”
Worst argument ever. Renewables can’t work because they haven’t been adopted.
Wow.
Once again, I would urge you to read Jacobson & Delucci. They have published peer-reviewed (I believe) studies projecting costs and resource allocations which conclude that not only can renewable sources provide 100% of our energy needs, but we could have 80% of that in place by 2030, and 100% in place by 2050 – and it would *save* us a ton of money.
Suggest you take your nuclear blinders off for a few hours, and read the literature:
http://web.stanford.edu/group/efmh/jacobson/Articles/I/WWS-50-USState-plans.html
Haven’t been adopted?! My sign-shaking simian, they don’t work where they’ve been pushed with enthusiasm for decades; in 2012, Denmark still got 51% of its electricity from fossil fuels! From the same page, Denmark’s CO2 emissions were 14,076,363 tons over total generation of 28920 GWh. That’s a whopping 487 grams of CO2 per kWh.
Sweden scored about 1/20 of that. Of course, Sweden is not “green”; it’s nuclear/hydro.
Are you going to tell me that Denmark hasn’t adopted renewables? Come on, I can use a really good laugh today; the morning was a loss.
Jacobson and Dellucch are frauds. The paper you link to has no journal publication listed. Peer review? They don’t need it to get people like you to push it uncritically, and that’s what it’s for: propaganda.
They don’t assign the carbon emissions of deforestation to “renewables”, they don’t calculate the amount of required storage or its costs, losses and the cost of making up those losses… then they invent a carbon impact of nuclear war out of thin air and assign it to nuclear energy.
Tell me, how many nuclear wars has Sweden’s nuclear power program caused? France’s? Heck, even the USA’s? The only nuclear weapons fired in anger came twelve years BEFORE the first nuclear generation fed the US grid.
Says the guy who denies the only true climate success stories on the planet. This much irony needs the services of a blacksmith.