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Who’s Afraid of Retail Electricity Rate Reform?

fromport

fromport

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southern california (NW of LA)
energyathaas.wordpress.com

Who’s Afraid of Retail Electricity Rate Reform?

Even solar losers like me can see a big win in California rate reform. Note: An earlier version of this post reported proposed electricity prices taken from PG&E testimony filed on April 7. The…
energyathaas.wordpress.com energyathaas.wordpress.com

Who’s Afraid of Retail Electricity Rate Reform?

California just moved one step closer to changing the way households pay for electricity. If all goes according to these newly proposed plans, Californians will be paying lower electricity prices and an “income-graduated” fixed charge by 2025. The impetus for electricity rate reform? California’s retail electricity prices are high and rising
 
Q-Dog said:
So, the retail per kWh cost of electricity goes down but the total cost on your bill goes up?
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My understanding is rates are high due to large amounts of red tape and emissions reduction mandates from CA government. Billions in costs from poor vegetation management and ensuing fires. Plus corp greed (Enron anybody?).
 
fromport said:
energyathaas.wordpress.com

Who’s Afraid of Retail Electricity Rate Reform?

Even solar losers like me can see a big win in California rate reform. Note: An earlier version of this post reported proposed electricity prices taken from PG&E testimony filed on April 7. The…
energyathaas.wordpress.com energyathaas.wordpress.com

Who’s Afraid of Retail Electricity Rate Reform?

California just moved one step closer to changing the way households pay for electricity. If all goes according to these newly proposed plans, Californians will be paying lower electricity prices and an “income-graduated” fixed charge by 2025. The impetus for electricity rate reform? California’s retail electricity prices are high and rising
Click to expand...
The article in the above link discusses a proposal California's for-profit utility corporations put on the table more than a year ago. The CPUC has moved away from that proposal and now is recommending charging most utility customers a monthly flat fee of $24. Poorer customers would pay less. In return, kWh rates would be reduced slightly, at least until the next rate increase. https://calmatters.org/housing/2024/04/california-energy-commission/

The latest proposal is catching a lot of flack from the legislature and solar advocates, but I expect the CPUC to adopt it soon.
 
Energy Institute at Haas is right on the money, the only organization currently looking at the residential electricity market with clear heads and a serious understanding of the system.

Of course this got watered down to $24 already that will do basically nothing. It's a nudge in the right direction though.
 
All Rate design involves cost shifts between customer classes and the CPUC has focussed on making sure that higher income earners that have the capital to install solar and batteries do not continue to shift costs to lower income customers (hence the change in NEM3.0). Therefore the IOUs believe that a larger fixed grid connection charge can even out this cost shift...30% of SDGEs customers are on a subsidized care plan and another 30% of customers are delinquent in paying their energy bills.....Ironically, the reason that many folks have installed solar/batteries is to cushion themselves from the exorbitant electric rates from the three IOUs. High electric rates are the biggest barrier to CA state policies related to electrification and merely shifting energy charges into fixed charges will not do anything to enhance affordability.Furthermore, there is no guarantee that either the fixed charge or the energy charge will remain "fixed." SDGEs TOU peak rates from 4-9 were 0.83227c per KWh beginning last June. I believe that they are set to increase again soon based on the recent CPUC decisions related to extending Diablo Canyons .2c per KWh life under Senate Bill (SB) 846, signed into law in September 2022, and incremental Wildfire Mitigation and energy storage projects that were not contemplated under the GRC. With rates sky high, solar + battery energy storage is a no brainer, esp. for homeowners that use a large # of KWs.
 
hellosf said:
All Rate design involves cost shifts
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That doesn't make an argument to maintain them, especially when you are trying to get people to act rationally which they cannot do under an irrational rate scheme.

Approximately half of a typical customer's bill, $120 or so, goes into fixed costs of the grid, and would be more realistically reflected in a fixed fee, and without reducing their bill this would still incentivize electrification because they could increase their electric consumption at half the per kwh rate, getting a better value out of their increased consumption.

Only when a bill accurately reflect reality can people make accurate energy choices. But there's no hope of that, so we'll piss into the wind with the $24 and keep spiraling.
 
AntronX said:
Sure as long as it comes with right to disconnect and not pay fixed fee.
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It does or should, but you would have to prove to the AHJ that 1. You have enough power in winter and 2. You have it without having to routinely run a generator in an urban area.

I'm open to a libertarian argument that society should not force point 1 on an individual homeowner, but thus far it is generally accepted that the AHJ has a vested public health interest in not allowing homes to be occupied without adequate power and water.
 
Generator is a good point. Would not want to live next door to one. But exactly how much power they consider enough for winter can get murky and they can set the bar artificially high.
 
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AntronX said:
But exactly how much power they consider enough for winter they can get murky and they can set the bar artificially high.
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I have been pleasantly surprised at reports of rural counties at least setting quite reasonable bars, like just 24 hours of battery storage.
 
dougbert said:
yet GREAT sound suppression is possible
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Emissions though. California despite being so strict has never achieved federal ozone compliance in most populated areas, so will probably continue to be legally granted permission to enact our extra controls.
 
hwy17 said:
Emissions though. California despite being so strict has never achieved federal ozone compliance in most populated areas, so will probably continue to be legally granted permission to enact our extra controls.
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being EX californian now for 32 years, I forget that, I run mine on propane, but usually Nat Gas
 
hwy17 said:
That doesn't make an argument to maintain them, especially when you are trying to get people to act rationally which they cannot do under an irrational rate scheme.

Approximately half of a typical customer's bill, $120 or so, goes into fixed costs of the grid, and would be more realistically reflected in a fixed fee, and without reducing their bill this would still incentivize electrification because they could increase their electric consumption at half the per kwh rate, getting a better value out of their increased consumption.

Only when a bill accurately reflect reality can people make accurate energy choices. But there's no hope of that, so we'll piss into the wind with the $24 and keep spiraling.
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If cost shifts were eliminated, and grid connection/energy service charges were structured based on a cost of service model. Rural (often lower income, higher usage customers) would pay significantly more $$$. Fire hardening (WMP) costs including undergrounding are already well into the billions and based on the approved programs, billions more will be spent. There are very few meters to support these costs; I was told that there around 10k meters east of Alpine in SD county, located in the high wildfire threat districts. SDGE has already spent $4B on these costs and socializes all costs to the 1.5M customers. City of San Diego residents and other coastal Cities have strong incentive to municipalize to avoid having these delivery costs be shifted to their bills.
 
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