Solar energy customers are worried a new fee proposed by Xcel Energy would punish new customers for getting solar panels.
The monthly fee, which would pay for distribution and transmission of energy, would go into effect in April 2010 and would have to be paid to Xcel, regardless of whether the solar customer used any electricity that month….
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or Paperback
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Links to books and other items on this page and elsewhere on Greg Ladens' blog may send you to Amazon, where I am a registered affiliate. As an Amazon Associate I earn from qualifying purchases, which helps to fund this site.
In theory, perfectly reasonable. Being hooked up to the grid, even if you end up producing more net energy than you use, is a huge benefit. Building and maintaining the infrastructure is far from free.
On the other hand, it is very easy to abuse. I assume the precise charge mechanism and the fact that previous hookups don’t have to pay for it is due to standing regulatory rules. Electrical utilities are very heavily regulated for good reason, though they are often regulated poorly.
All that said, I’m going to be all socialist and just favor government ownership of electrical utilities. Why should we trust companies with such incredibly vital infrastructure? Especially infrastructure which is the textbook example of economies of scale and natural monopolies (which is why they are so heavily regulated BTW)… simpler and almost certainly more efficient just to have them owned by the people. (Yeah, running the utility will likely fall to a contracted company… but at least make it a not-for-profit answerable to the people not shareholders.)
@ travc:
Agreed completely.
Further, this strikes me as an anti-competitive move to discourage people from generating their own electricity hence taking revenue away from the electric company. People talk about how government cannot be trusted. It is private enterprise with profit motives that cannot be trusted far more so than public entities. People just do not seem to get that.
One of my clients in Portland, owns a “cabin” in southern WA (read, very large, luxurious house) that is ideally situated for geothermal power production. He spent far more than would see any savings for at least fifteen years, installing geothermal generators. He was producing 25% more power than would be used when they were actually out there and they were only out there for about eight weeks out of the year – including when they made it available to friends (and me, for a wonderful weekend with the family).
They were initially still connected to the grid and constantly sending excess into the grid, most months a substantial amount. He had no problem with the idea of being taxed and paying fees based on the amount of power produced, in comparison to what he was paid for it. He would even accept not actually getting paid – though I’m sure that would be rather irritating. But the power company actually wanted to charge him more than they would pay for the actual power produced, for use of their infrastructure. The fees were the same fees that would be charged for commercial production.
In the end he got a few of his neighbors to help cover the cost of enough generators to power all of them, with an excess. They all disconnected from the grid and shoved a huge spike into the ground, to get rid of the excess power. They did have batteries to charge and use in town, but they were still generally grounding enough power to keep a few more houses powered at an average consumption level.
I am not entirely sure how I feel about socializing it, but I am definitely open to discussing it. In such a case, I would tend to think that rather than getting “paid” for production, people who generate power in that fashion should get tax credits for doing so, even if they end up with a negative liability and get a check from the IRS. Problem solved.
And actually, it occurs to me that this would be a solution now. Companies that want to charge like fees like this should be taxed for that amount and that same amount should be reflected in the power producer’s taxes…
…..no. Energy production is federally subsidized. You’re already paying for that.
On top of that you’re likely making more power than you use during the peak hours, and as such selling power to them at their rate (which includes infrastructure and profit). You trade for this by buying a little back during off hours at the discount rate. You’re helping them out by making the production requirement more even across the board, and ultimately requiring a lighter infrastructure as more people join you.
People producing their own energy are improving our GDP. They should be rewarded, not fined for it.
Deregulation of the power market with the ability to choose your power supplier from anyone on the net seems to have worked for Norway to some extent (there are caveats to this, including that you will hear endless complaints about having to pay close to market price for your power rather than the almost free ride they used to have compared to Europe).
@1 To be honest, trusting the government with anything vital seems like a ridiculous proposition. The constant shifting of priorities and short term ‘get elected’ mentality prevents them from actually making rational decisions on funding of infrastructure. Until we stop seeing pork, bureaucratic budget hogging and ‘crisis mentalities’ I’d rather trust someone with a profit motive, at least they give a damn about the infrastructure.
rsm, you complain that governments have short cycles that act against consistency, but public companies (which most utilities are) work on a much shorter cycle. The way our financial system is set up, it rewards results on a quarterly basis. Energy companies have an interest in their stock price much more than they have an interest in the infrastructure. There is no reason to believe that they would be less likely to delay investment than the government would.
If reducing the draw from the power company’s generation systems during peak production hours actually helps their infrastructure, e.g. by alleviating demand from some areas that are more distant, is it not reasonable to expect that this infrastructure will need less maintenance as transformers are less likely to blow out, etc.?
And since the infrastructure is already pretty well subsidized by the government, doesn’t this mean they’re getting away with double-charging to maximize their profits, charging the government for the infrastructure then the end users for the same infrastructure again?
I feel that all infrastructure-related services, e.g. military, police, fire depts., roads, water, electricity, health care, and I’d even argue phone and internet, are so fundamental to society today that when they are compromised the country as a whole suffers — its populace, its businesses, even its GDP. As such, all of them should be handled by the government as essential services. Especially power. How much of the country is brought to its knees without power these days?
And having power under governmental jurisdiction might allow government to address issues that the free market isn’t willing to do — e.g. finding alternatives to oil. Plus it’ll dry up all the subsidization that the government has to do to these industries, lowering costs overall, since most of the time these subsidies go to greasing palms and lining pockets.
We’ve seen what happens when profit motive intersects public need in the health care sector, and in deregulated power industries, and in these recent net neutrality issues where companies are more concerned with maximizing profits than maintaining a public service. Profit motives are a disincentive for providing quality product at a reasonable price. Yes, you free market loons, even in areas with good competition.
In Alberta we’ve had semi-deregulated power for years. You pay a transmission fee to the electric utility, and you buy your power from whoever you like.
It makes sense to me that you should be charged separately for net consumption and distribution (based on total energy, both on and off the grid). But distribution is far cheaper the production, and that should be reflected in the fees. I really don’t see why this model should be any different whether the utility is private or public.
Seems to work with SMUD, for instance.
This is too bad. Already solar expense is so high.
If we think about solar product users, Most of the solar products users are complain that their solar panels have stolen so. Stealing solar panels too one of the reason for not preferring solar products