Kansas utility targets solar customers for higher rate

westar-energy-officeAs utilities around the U.S. have sought to increase fixed charges in response to growing numbers of customers generating their own power, a Kansas utility is taking a more targeted approach.

In a case now pending before the Kansas Corporation Commission, customers of Topeka-based Westar Energy with their own solar, wind or other generation will pay a higher fixed chargethan other ratepayers.

“We just want to make sure it’s fair to any customer, whether they decide to generate some of their own power or not,” said Jeff Martin, Westar’s vice president for regulatory affairs.

Opponents see the proposal as another effort to fend off competition from residential solar after Westar’s effort to kill net metering ended in a compromise last year.

“This is another attempt by the utility to kill solar in Kansas,” said Aron Cromwell, co-owner of Cromwell Environmental, a Lawrence-based solar installer.

‘Somehow the rules are different’

Over the past year, utilities across the country have been hiking – or attempting to hike – the fixed portion of their bills.

Last fall, three Wisconsin utilities won increases in fixed-cost recovery from the utility commission there. More recently, Kansas City Power & Light and the Empire District Electric Co., in southwest Missouri, filed requests with Missouri’s Public Service Commission to substantially increase the fixed portion of customer bills.

Westar, which serves about 600,000 customers in eastern Kansas, has crafted three billing options. Two would require customers to pay a $50 monthly fee along with other charges, while the fixed charge for other customers would rise from $12 to $15. Rates for energy consumption would vary depending on the plans.

Customers with their own generation would be required to pay the $50 monthly fee. According to Martin, a typical residential solar customer could end up paying something like $100 a month in fixed costs. Existing solar systems would be grandfathered in.

Cromwell predicts that the billing options outlined in Westar’s rate proposal will increase payback time from 12 years to more than 20 years, thereby creating a powerful disincentive to solar installation.

“It’s discriminatory to say that (solar customers) can’t have ‘this’ rate, they can only have ‘those’ rates,” Cromwell said. And he pointed out that “there are all kinds of ways to use less power,” like turning up the thermostat in July, or replacing incandescent lightbulbs with CFLs or LEDs.

“Is there a reason these people are not being forced into these rate structures?” he asked. “When it comes to solar, somehow the rules are different.”

Martin said the 280 solar generators in Kansas typically offset about 90 percent of their bill, whereas even Westar’s most energy-conserving non-solar customers generally consume at least 300 kilowatt hours in a month.

And although solar customers can produce a good deal of power, Martin said, there are plenty of times when their panels aren’t producing, meaning those customers draw on the utility’s system to get power.

‘Fixed’ costs

Martin said that for the purposes of the rate plan, Westar estimates its fixed costs at 73 percent of the cost of delivering power to customers.

However, the notion of “fixed” costs is more nuanced than Westar and other utilities often portray it, according to Karl Rabago, a former Texas utilities regulator who is now the executive director of the Pace Energy and Climate Center. As an example, he pointed to a California project done 20 years ago.

In an experiment, a utility installed a 0.5 megawatt solar array next to a transformer in Kerman, California and found that it added 4.6 years to the life of that transformer, resulting in a $398,000 reduction in “fixed ” costs.

Although utilities generally would classify a transformer as a fixed cost, Rabago said that in the Kerman experiment, “by changing the pattern of use, they got it to be variable.”

Along the same lines, he said, “If I got everybody to reduce their use of electricity at the hottest time of day, the transformer wouldn’t get as hot. Not getting as hot means they last longer.”

Brad Klein, a lawyer with the Environmental Law & Policy Center, said, “The problem is one of timing and perspective. Over the long term, all costs are variable. Costs ‘vary’ based on customer behavior over the long term.”

Solar a cost, or a benefit?

Cromwell concedes that solar customers – like all utility customers – are tapping into the infrastructure for generating power and getting it to customers. But how much should a solar customer pay for that privilege?

“They have made no effort whatsoever to justify their rates,” he said of Westar. “No study has been done to prove that solar is a cost to ratepayers.”

In fact, “every independent study done on that point has shown exactly the opposite,” said Bryan Miller, vice president of public policy at solar developer Sunrun. Studies in Vermont, New York, Texas, Nevada and, most recently, Missouri, have concluded that solar customers are a net benefit to the power system.

Solar customers create costs, he said, but benefits as well, such as avoided investments in transmission and distribution, and reductions in the amount of power lost in the course of moving it long distances.

There is some overlap between when solar panels are producing and when system demands are at their highest, according to Martin. He said rooftop solar panels, which generally face south, tend to produce maximum power at about 2 p.m.

Peak demand on the system, however, is from about 5 to 7 p.m. And because peak demand, rather than total demand, is what really drives utility costs, he said that customers with south-facing solar panels reduce demand at a time of heavy use, but generally are pulling energy from the system when it’s producing its costliest, peak-hour power.

Distributed generation engenders both costs and benefits, Cromwell said. As to how those compare, and just how much solar customers should pay for using the system, he said, “That’s something the KCC needs to look at.”

 

california solar

Here Comes the Sun: How California is Bringing More Renewables to the Grid

california solarAsk most people what the Beatles and California have in common and they might very well be at a loss. However, the answer is pretty simple: they are both unabashed trendsetters in the face of resistance – the former in their musical style and the latter in its clean energy policies.

Not content with setting a Renewable Portfolio Standard that ends at 2020, Governor Jerry Brown and state legislators are pushing for the Golden State to get 50 percent of its energy from renewable resources by 2030.

To meet this ambitious target, California must build a system that is largely based on renewable electricity, like wind and solar. This is not an easy task. The primary reason? Sunshine and wind are only available at certain times of the day and can be variable during those times.

Traditionally, managers of the electricity grid have relied upon dirty “peaker” power plants – usually fossil fuel-fired and only needed a couple of days a year – to balance the grid during periods of variability or when electricity demand exceeds supply. But, in a world where 50 percent of our energy comes from renewable sources as a means to achieving a clean energy economy, we can’t rely on these dirty peaker plants to balance the variability of wind and solar.

Luckily, technology is available today that can help fill the gap of these peaker plants – and the California Public Utilities Commission (CPUC) is starting to embrace it.

This technology, also known as demand-side resources, is defined by the CPUC as:

  • Energy efficiency
  • Demand response, an energy conservation tool that pays customers to save energy when the grid is stressed
  • Distributed generation, like rooftop solar PV
  • Energy storage, including electric vehicle batteries
  • Smart grid, which utilizes technologies like two way programmable thermostats, to gather energy use information to improve efficiency and enable other resources like demand response
  • Water-energy measures, which address the inextricable effect of water use on energy use, and vice-versa
  • Strategic electricity rate design, such as time-of-use pricing, a voluntary program that enables people to choose when they power up appliances based on electricity prices and make decisions that can both save them money and reduce harmful pollution

By encouraging customers to use energy more wisely through demand-side resources like these, utility companies can avoid the need to produce more energy as the state’s population increases. This will also cut down on infrastructure costs, as fewer power plants and transmission lines will need to be built, and those savings can be passed on to customers. Further, by leveraging the ability of electric vehicles to charge at times when there is an abundance of clean power available, as well as distributed generation, California will be able to use increasing amounts of renewable energy.

Currently, there are a number of these innovative, demand-side solutions available in California. In order to bring them together, the CPUC, under the direction of Commissioner Michel Florio, initiated a new proceedingto, “create a consistent regulatory framework for the guidance, planning, and evaluation of integrated demand side resource programs.”

EDF would like to make sure the CPUC advances the following outcomes, as stated in our formal comments:

  1. Ensure Californians are an integral part of the solution. Resources on the customer side of the meter should be given due consideration and incentivized by properly structured rates and ensuring these customer-side resources are properly valued.
  2. Target demand-side resources geographically. The CPUC should focus on the placement of demand-side resources where they will have the most benefit – i.e., in those areas hit hardest by air pollution. This will ensure communities historically and disproportionately burdened by dirty air benefit from these improvements.
  3. Consider how to link utility revenues to the outcomes California wants. Rather than allowing cost recovery as a matter of course, the CPUC should develop principles for a utility business model that rewards utilities and Californians for integrating cost-saving, well-targeted demand-side measures on both sides of the meter. Successful resources will be those that contribute to the reliable operation of the grid and advance state environmental goals, such as AB 32 (California’s Global Warming Solutions Act of 2006, a landmark piece of legislation that set an absolute, state-wide limit on greenhouse gas emissions) and the Renewable Portfolio Standard.
  4. Link closely with distribution and reliability planning. By requiring the consideration of demand-side resources in utility planning, the CPUC can help to defer or avoid the need for more costly or environmentally damaging investments.

This new effort by the CPUC is a terrific opportunity for more coordinated, cost-effective deployment of demand-side resources that can better address California’s energy needs, improve customer choice, and reduce carbon pollution from our energy system. It’s a chance to make real, lasting change in California. Similar to the transformative effect “Beatlemania” had on music and popular culture, California’s clean energy policies can transform how we make, move, and use electricity.

 

SolarCity sues Arizona utility over solar anti-competitive practices

520-solar-city-SRPThe solar financier and installer chaired by Elon Musk, SolarCity, has filed a lawsuit in Arizona federal court claiming that the Arizona utility Salt River Project is using anti-competitive practices to maintain a monopoly around energy and solar power and unfairly block competition.

Last week the board of directors of Salt River Project approved a new monthly average $50 “demand charge” fee for solar customers that live in the utility’s footprint. The charge is based on their peak energy use, and all solar customers would have to pay the fee even if the amount of solar energy that they produce on their roofs offsets the amount of energy they take from the grid. Most solar panel rooftop systems aren’t connected to batteries, so solar customers still use grid power at night or during non-sunny days.

The utility says the new monthly fee is fair because it needs to maintain the grid for these solar customers even if they are paying the utility less for energy. SRP says solar customers have a unique relationship with the grid and are actually shifting grid maintenance costs onto non-solar customers.

 

time of use

If Time-Variant Electricity Pricing Offers So Many Benefits, Why Don’t We Have More of It?

Time-Variant Electricity PricingToday, most residential electricity customers are charged the same price regardless of when the electricity is actually being used. Charging customers a uniform price for electric service looks a bit like buying groceries by the cart instead of by the items purchased (e.g., apples versus filet mignon) – simple, to be sure, but so riddled with inefficiencies that no one would actually propose operating a supermarket that way. A cartful of filet mignon may weigh the same as a cartful of apples, but the value of these items and the cost of bringing them to market is drastically different. Similarly, electricity costs differ depending on the time of day power is produced and delivered.

Time-variant electric pricing addresses this issue by charging customers different prices depending on when electricity is used, reflecting the true costs of producing and delivering electricity. This gives customers greater control over their electricity bills by allowing them to reduce their energy use at higher-cost times. A recent blog post by my colleague, economist Beia Spiller, explained how time-variant electricity pricing can benefit customers, utilities, and the environment, and described several different types of time-variant pricing.

Given its compelling economics, one would think time-variant pricing would be widespread. Part of the reason it’s not is sheer inertia, but there’s more to it than that.

What would it take to fix this? 

Changing the paradigm, first and foremost, requires technology that supports a more specific pricing signal. The most straightforward approach entails widespread introduction of advanced, or smart, meters, which collect detailed electricity use data.

Traditional electricity meters measure the gross amount of electricity that passes through them from the time they are plugged in until they are taken out of service. Typically, about once a month, a reading is taken and the difference between each reading and the prior reading is deemed to be the amount of electricity used for the billing period. The bill is calculated by multiplying this amount by rates that stay consistent throughout the billing period. In order to apply different prices during different times within the same billing period, you need a meter that can distinguish among these sub-periods, or ‘intervals.’ The more targeted you want the pricing to be, the smaller the intervals need to be. Simply put, time-variant utility rates cannot exist without this technological prerequisite.

The good news is we’re making progress. According to a recent federal report, slightly more than 30 percent of residential customers have advanced meters. The bad news is that having the right meters is not enough. As discussed in a blog post on Energy Exchange and a recent article in the Washington Post, the presence of smart meters doesn’t automatically mean time-variant pricing is available. Introducing time-variant pricing requires the utility company to have complementary technology, such as modern billing systems capable of calculating and delivering complex bills to residential customers.

But, we’re still not there yet. Even if we have all those components in place ­– advanced meters and related technologies, complex billing systems, and time-variant prices – adoption of time-variant pricing might still remain low. Customers are often given the opportunity to opt in to time-variant pricing programs, rather than being charged time-variant prices with the opportunity to opt out. This type of choice structure invariably leads to low adoption rates of the non-default option – not just with time-variant pricing, but with a host of other types of decisions, such as organ donation. This structure makes design and deployment of time-variant pricing much more challenging.

What stands in the way of getting all the pieces in place?

As discussed above, smart meter saturation is insufficient to transform the marketplace, but there are other barriers as well. For starters, utility regulators may not be convinced advanced metering and related technologies would be cost-effective. The widespread rollout of smart meters might make the most economic sense in the long run, by making the entire energy system more efficient and avoiding use of the most expensive power, but not all regulators are certain about this outcome before the transformation has begun to occur.

In addition, developing a menu of time-variant pricing challenges the longstanding utility business model. Traditionally, electricity rates are set by regulators in a way that gives the utility the opportunity to profit on infrastructure investments it makes, while also ensuring safe and reliable electric service. With time-variant pricing, utilities and regulators find it difficult to fairly allocate the costs of earlier infrastructure investments among customers with different usage habits, while still providing prices that reward customers who use energy at less costly times. Moreover, since time-variant pricing may reduce a utility’s future infrastructure costs, and thus squeeze its opportunity to earn profits, utilities may be reluctant to move in this direction without other opportunities to profit.

Do customers want to fix this?

Customers who have never had access to time-variant pricing may not know how to begin to think about this prospect. However, one of the most encouraging harbingers for change is that in the areas where customers have actually experienced robust time-variant pricing regimes, they have responded quite favorably. A time-variant pricing pilot conducted by the Sacramento Municipal Utility District showed not only do study participants report high levels of satisfaction with the programs, but in some cases, they are more likely to perceive the prices they are charged as fair compared to those customers who have flat pricing. Moreover, low-income participants, who are often thought to be at greater risk from a change in rates than other communities, showed higher-than-average acceptance of time-variant pricing.

In a world where flat electricity prices are the default, achieving even moderate levels of time-variant pricing adoption requires prices be designed, deployed, and communicated in a manner that makes them so attractive people will overcome inertia and choose them over more familiar offerings. Better pricing is key to a better functioning electricity market, paving the way to a low-carbon future.

 

SRP solar tax

SRP votes to impose new fees on solar customers, SolarCity fights back

SRP solar taxSalt River Project (SRP) has voted to impose charges on new solar customers, while at the same time giving their current customers a break from charges — at least for now. However, the move appears to bring the company one step closer to the threat of a lawsuit.

SolarCity threatened to sue SRP for implementing the new charges, alleging the company is attempting to remove customers’ choice of how they receive electricity.

“Customers are smart,” said SolarCity CEO Lyndon Rive in a letter to the SRP board. “A 96 percent drop in demand is compelling evidence that the price plan is an unabashed penalty on customers who want to go solar and a deliberate effort to stop new solar installations in SRP’s territory. Customers know the new plan leaves them with no real choice. As a result, solar workers in SRP territory face serious uncertainty as to how long they will be able to earn a living.”

 

customers demand utility's support for smarter homes

Can Utilities Evolve to Meet Customers’ Demand for Greener, Smarter Energy?

customers demand utility's support for smarter homesA new world is coming into focus, as the connected home arises from the ashes of utilities who once just had to keep the lights on. Millennials and minorities, soon to become the American majority, want to lead zero-net lives in solar homes — and they want utilities to work it all out before they move in. And if the utilities don’t get on board, then consumers will find someone who will. Because it is inevitable: someone else will.

That about sums up the well-connected Shelton Group‘s annual Energy Pulse study, its 10th. By the time its 20th comes in, consumers will likely have all of the aforementioned amenities — and utilities will have learned to live and perhaps even capitalize upon it.

I spoke with the Shelton Group’s vice-president of research Lee Ann Head about how both producers and consumers of this solarized, internetworked future can work together to make it happen even faster, as uncertain elections and regulated emissions draw near. It’s all good news — unless you’re a utility circling the wagons.

What do you think is the greatest takeaway from this year’s Energy Pulse study?

The greatest takeaway is that consumers in the U.S. are not satisfied with their electrical utilities. The energy industry is in a state of flux. There are pretty dramatic changes coming down the pike in, at minimum, the next five to 10 years. Alternative energy and the connected home are going to change things quite rapidly. So utilities really need to be focusing on adopting new technology, improving customer engagement, communication channels and interaction options — or they could lose customers.

How has the solar industry changed the utilities in the last few years, and how do you see that evolving in the years to come?

Well, consumers love renewable energy. We ask the question every year in our Energy Pulse study: If you were President of the United States, and you could provide financial support for the exploration and development of one form of energy, which would you choose? And 40 percent chose solar, out of all of the varieties of energy generation, so Americans love the concept. Solar significantly beat coal and natural gas even when we asked people to name a form of energy they favored off the top of their heads: 54 percent of Americans, unaided, think of solar when they think of energy generation. But the reality is, as a percentage of their overall portfolio, most American utilities aren’t producing solar energy, even though it is Americans’ preferred form of generation. So if their utilities aren’t providing it, and new methods of solar ownership or leasing become available to bring its price point down, consumers are going to find someone else who can provide it for them.

Do you see utilities moving quickly enough into the solar space to address this disconnect, or remaining intransigent until they can’t any more?

I think there is intransigence on the part of utilities. But from a regulatory policy standpoint, there is also discomfort with the idea of electrical utilities installing solar panels on roofs and then owning, leasing, managing or renting them. There is interesting pushback from a lot of states, which hasn’t been doing anyone any good. Obviously, there are a lot of utilities out there that have investment in coal-power generation and nuclear power plants, and are reluctant to shift them.

But I think some are definitely interested in adding solar to the mix, because they are seeing a huge consumer demand for it. As solar costs come down for consumers, they come down for the utilities as well. It has become a more cost-effective alternative, especially over the last few years. And who knows what is going to happen now with a Republican Congress, but the Environmental Protection Agency’s new carbon dioxide emissions regulations are definitely changing things. As utilities begin to comply with the EPA’s new rules, solar and other renewable energy generation will begin to look even more cost-effective.

It seems pretty clear from your study that consumers want change. Did you get a sense that their pressure is working?

Consumer pressure is certainly influencing the speed at which utilities adopt renewable energy. Sixty percent of consumers feel it is important for their utilities pursue renewables. Yet when we ask if their utilities are doing this, only 30 percent say it is happening. On a related note, less than half of U.S. residents feel their utilities are environmentally responsible. I think those two things together are driving actions on the part of utilities. Certainly, there is growing demand for change on the part of consumers.

Let’s fast forward to 2016. Do you see this growing demand for solar and renewable energy playing a part in the presidential election?

Well, we don’t know if the Investment Tax Credit will be renewed, which would certainly help the solar industry. But with the Republican Congress, we don’t know if that will happen. If it doesn’t, I’ve read pundits on both sides of the issue wonder if renewable energy will be able to maintain its growth without incentives. That’s definitely an electoral unknown. From a regulatory perspective, what happens with carbon dioxide emissions and the utilities is also an unknown, and could swing momentum either way. And I also think there are environmental issues in play.

Is there a sense that the American majority has turned the corner on solar? That even if Congress kills off popular tax credits, private players will step up?

Maybe, and while I don’t have the answer to that, a lot of people are wondering about it. I think a case can be made that growth in the solar industry will happen even if the tax incentives aren’t in place. I will say this: I think utilities are beginning to see the business case for getting more directly involved with distributed generation. We’ve done recent work for a couple utilities and what we’ve seen is that consumers have given them permission to play in that space. I think there is a lot of money being left on the table. In the end, what I think a lot of state public utility commissions need to understand is that renewable energy is what consumers want. There is a protectionist mentality among the utilities that is holding back a lot of market activity in the industry.

This was your 10th Energy Pulse study, so let’s timewarp to your 20th. What does 2025 look like?

I think what is happening in the connected home is a game-changer. Technology-assisted energy efficiency and consumption reduction, distributed generation and battery storage: It’s going to be a whole new game, in a decade. I think an awful lot of the effort that the energy industry has traditionally put toward consumption reduction — trying to get consumers to adopt conservation behaviors and invest in energy-efficient home improvements — is going to be unnecessary, as new high-performance, zero-energy homes are built and become a much larger percentage of the housing stock. What we’re hearing now over and over from Americans is that they already want energy-efficient homes powered by renewable energy — but they don’t want to work hard for it and spend a ton out of pocket. They really have a strong do-it-for-me attitude — and in 10 more years, much of it is going to be done for them.

As your study said, millennials and others becoming the majority expect innovation and efficiency as a first principle. 

That’s right. If the utility industry does not offer the technologically advanced renewable energy products and services these consumers are looking for, then they will find competition from other players in the market who will give it to them. Comcast already has a pilot program selling energy to consumers as a third-party retailer, in markets where that is allowed, and also provides demand response services in partnership with a utility in Texas. They’re getting into this pocket right now because they’ve got the platform. If they can lock consumers into connected home and energy management services, it creates more stickiness for them. Adding a Nest thermostat to their package means they’re able to sign contracts with customers who are less likely to switch to, say, Netflix. The business proposition for them is to get a bigger piece of the whole pie.

 

Desert Sunlight Solar Farm

California Opens the World’s Largest Solar Plant

Desert Sunlight Solar FarmCalifornia has been at the forefront of solar energy in the United States in the past few years, thanks to some pretty strong clean-energy policies that have encouraged many businesses and homeowners to install solar power systems in order to increase the amount of energy received from renewable sources. Now, with a new large scale solar project officially underway in South California, the state is bound to further strengthen its position as a solar energy leader, and give a major boost to its production of electricity through clean sources.

Earlier this week, Governor Jerry Brown, accompanied by several other state officials and Sally Jewell, U.S. Secretary of Interior, opened the Desert Sunlight solar farm in the Riverside County desert, which is said to be the world’s largest solar plant.

It is a 550-megawatt solar farm that was built by First Solar, one of America’s leading manufacturer of photovoltaic systems, and it has the capacity to meet the energy needs of up to 160,000 households in California. The project was supported by the government, through its federal loan program, which gave California a loan of about $1.5 billion. The plant is built on federal land of about 4,000 acres, and it is owned by GE Energy Financial Services, NextEra Energy Resources and Sumitomo Corporation of America. It is comprised of about 8 million photovoltaic panels. According to the Department of Energy, the plant is expected to make a profit of about $5 to $6 billion.

“Solar projects like Desert Sunlight are helping create American jobs, develop domestic renewable energy and cut carbon pollution,” Interior Secretary Sally Jewell said in a statement.

This project comes after Governor Jerry Brown has asked on several occasions for an increase in production of green electricity by up to 50% by 2030, a considerably more ambitious target than the current one, calling for 33% by 2020.

The Desert Sunlight farm will have a significant environmental impact, as it is expected to cut greenhouse gas emission by 300,000 tons, which would have the same effect as taking about 60,000 cars off the road.

This is the latest in a series of projects launched in California recently, aimed at accelerating the growth of solar energy in the state. In late 2014, the Topaz Solar farm was built in San Luis Obispo County, which just like Desert Sunlight, has a capacity of 550-megawatt and was also built by the same company – First Solar. Before Desert Sunlight was formally opened, the Topaz farm was officially the world’s largest solar plant, spanning on a surface of 9.5 square miles.

With so much investment in solar energy and other clean sources, California has become the nation’s leader in renewable energy adoption, and produces more electricity from renewable sources than any other state. In the future, utilities are expected to ramp up investments in solar projects, as they try to comply with federal mandates that require more energy to be produced by solar panels and other green technologies, in an effort to reduce electricity generation through coal.

san antonio solar

San Antonio takes different tack on solar energy

san antonio solarSan Antonio is one of the leading cities for solar energy in the United States, with photovoltaic systems on nearly 2,500 roofs and a solar farm in the works that will power the equivalent of 70,000 homes.

Leading the effort is Doyle Beneby, the CEO of the city-owned utility, CPS Energy, which not only instituted a rooftop solar program that provides rebates for homeowners installing PV systems, but also negotiated deals with companies such as OCI Solar Power, the developer of the 400 megawatt solar farm.

That arrangement with OCI Solar Power is the largest economic development agreement between a municipal utility and a private company in the U.S., one that promises to create 800 permanent jobs once it’s completed in 2016.

 

distributed energy

How utilities think they will make their money in the future

distributed energyFacing an evolving power industry and Americans’ changing relationship with the electric grid, utilities have been forced to alter traditional ways of thinking and are increasingly seeking growth in new areas.

That’s one of the main takeaways from Utility Dive’s recent report, the State of the Electric Utility 2015. A survey of more than 400 industry professionals, the report reveals utility executives see distributed energy and the customer relationship as their biggest growth opportunities over the next five years.
That represents a radical departure from distributed resources viewed as a disruptive, death-spiral inducing technology. And while utilities have always had to deal with consumers, they tended in the past to view them as a monolithic group of ratepayers, and the “customer relationship” has traditionally been one based around billing and outages.

pathways to grid evolution

The Shift Toward a Decentralized, Distributed Electric Grid Is Already Underway

pathways to grid evolutionThe electricity sector is headed for a dramatic transformation at the edge of the grid, where utility meets customer.

Like the evolution of markets such as telecommunications and computing, the phases of change will be varied and complex. Successful companies — be they utilities or third-party service providers — will recognize and adapt to market-specific drivers of change as they move toward enabling tomorrow’s electricity system.

In a new white paper, Evolution of the Grid Edge: Pathways to Transformation, GTM Research identifies three pathways that different states will follow in their transition to the emerging grid-edge and distributed electricity system. To get there, they will follow one of three pathways: “The Advanced Energy Consumer,” “The Innovative Regulator,” and the “Proactive Energy Provider.”

 

electric retailers map

Will a Gulf in Energy Services Become the Next Digital Divide?

electric retailers mapConcerns over the Digital Divide are widespread. As described by Internet World Stats:

“The Digital Divide, or the digital split, is a social issue referring to the differing amount of information between those who have access to the Internet (especially broadband access) and those who do not have access.”[1]

Similarly, significant attention has been paid to the lack of access to reliable grid power in certain regions of the world. [2] But here in the United States, another divide may be coming — the gulf between energy services available in competitive retail markets as compared to utility services available in markets where the utility company is the only retail provider.

 

stress on Hawaii's grid

Hawaii’s Solar Push Strains the Grid

stress on Hawaii's grid

Kauai’s utility takes a second stab at battery storage as solar heads toward 80 percent of peak power.

The prospect of cheaper, petroleum-free power has lured the Kauai Island Utility Cooperative (KIUC) to quintuple utility-scale solar capacity over the past year, building two 12-megawatt photovoltaic arrays. These facilities are the biggest and a significant contributor to the island’s 78-megawatt peak power supply. When the second plant comes online this summer, peak solar output on Kauai will approach 80 percent of power generation on some days, according to Brad Rockwell, the utility’s power supply manager.

That puts Kauai on the leading edge of solar power penetration, and KIUC has bruises to show for it. Power fluctuations from a first large plant installed in 2012 have already largely burned out the big batteries installed to keep solar from destabilizing the island’s grid.

Now KIUC is taking a second try with batteries and hoping energy storage technology has progressed sufficiently to keep the same problems from recurring. The new system, installed beside the solar farm nearing completion on Kauai’s northeast shore, is one of the first commercial installations of grid-scale lithium-ion batteries manufactured by the French battery giant SAFT.

 

arizona solar

Arizona Utility SRP Proposes Rate Changes For Solar Lease Customers — Potentially Trapping Customers With Uneconomical Leases

arizona solarThe Arizona-based utility SRP recently proposed new rate changes/fees that will potentially see 12,000+ customers who use solar power systems stuck in leases that are no longer necessarily economical.

While the addition of $50 in new monthly fees for new customers who use a solar leasecertainly isn’t something to cheer for, the real issue here is that existing customers (most whom are already locked into decades-long leases) aren’t exempt from the fees for their full lease terms.

What’s been proposed by SRP is that existing customers can keep their current rate structure for another 10 years — but after that they’ll be subject to the new $50-a-month fees. What this means is that those locked in for 20-year leases could see the total costs of their systems rise substantially, undoing any potential savings that the lease might have provided.

 

Solar, efficiency drive demand falls in Australian grid

3.difference-in-generationThe growth of rooftop solar and the increased uptake of energy efficiency account for nearly all of the reduced demand in the Australian electricity grid in the last year, according to a new report.

Falling demand has become the Trojan horse of the conventional, fossil-fuel driven electricity industry, with networks, generators, retailers and regulators framing business models and tariff policies in the last five years around the assumption that demand growth was unstoppable.

But the emergence of rooftop solar and energy efficiency has turned those assumptions on their head, explaining why many of the incumbent utilities are fighting so hard to have policies that encourage solar and energy efficiency measures overturned.