Question about electricity costs


Tracy Wallace
 

Good afternoon,

 

I have heard that when folks in north Dallas (more affluent areas north of I-30) get solar that somehow that pushes a higher cost to electricity buyers in southern Dallas (lower income areas south of I-30).  Can someone explain this to me? I’m in a cohort with Texas Energy Poverty Research Institute (TEPRI) and I brought this up thinking someone in the group could speak to it.  Now, I hope to report back what you all teach me.

 

Thanks!
Tracy Wallace


 

Hello Tracy,

Can you please provide some context for where what you heard came from?

For instance, is it referring to the cost of residential or commercial solar installation in general; the cost of interconnecting systems to the grid; the competition for limited incentives; inequitable cost shifting due to utility rate structures; competition for grid upgrade & modernization resources; issues around curtailment of "excess" solar; or something else/any of/all of these?

I'm not trying to be picky, but just want to point out this is a complicated question and that there are different answers depending on the context.

Regards,
James Orenstein


From: main@NTREG.groups.io <main@NTREG.groups.io> on behalf of Tracy Wallace <tracy@...>
Sent: Tuesday, May 17, 2022 2:23 PM
To: ntreg@groups.io <ntreg@groups.io>
Subject: [NTREG] Question about electricity costs
 

Good afternoon,

 

I have heard that when folks in north Dallas (more affluent areas north of I-30) get solar that somehow that pushes a higher cost to electricity buyers in southern Dallas (lower income areas south of I-30).  Can someone explain this to me? I’m in a cohort with Texas Energy Poverty Research Institute (TEPRI) and I brought this up thinking someone in the group could speak to it.  Now, I hope to report back what you all teach me.

 

Thanks!
Tracy Wallace


Tracy Wallace
 

Residential. Inequitable cost shifting.  That’s all I can remember.  And it is always possible that I am misremembering ;)

 

From: main@NTREG.groups.io <main@NTREG.groups.io> On Behalf Of James Orenstein via groups.io
Sent: Tuesday, May 17, 2022 2:51 PM
To: main@NTREG.groups.io
Subject: Re: [NTREG] Question about electricity costs

 

Hello Tracy,

 

Can you please provide some context for where what you heard came from?

 

For instance, is it referring to the cost of residential or commercial solar installation in general; the cost of interconnecting systems to the grid; the competition for limited incentives; inequitable cost shifting due to utility rate structures; competition for grid upgrade & modernization resources; issues around curtailment of "excess" solar; or something else/any of/all of these?

 

I'm not trying to be picky, but just want to point out this is a complicated question and that there are different answers depending on the context.

 

Regards,

James Orenstein


From: main@NTREG.groups.io <main@NTREG.groups.io> on behalf of Tracy Wallace <tracy@...>
Sent: Tuesday, May 17, 2022 2:23 PM
To: ntreg@groups.io <ntreg@groups.io>
Subject: [NTREG] Question about electricity costs

 

Good afternoon,

 

I have heard that when folks in north Dallas (more affluent areas north of I-30) get solar that somehow that pushes a higher cost to electricity buyers in southern Dallas (lower income areas south of I-30).  Can someone explain this to me? I’m in a cohort with Texas Energy Poverty Research Institute (TEPRI) and I brought this up thinking someone in the group could speak to it.  Now, I hope to report back what you all teach me.

 

Thanks!
Tracy Wallace


 

This most likely refers to cost shifting from generally more financially well off residential solar customers to those that can't participate in distributed solar system options such as customers with on-site solar & "Community Solar" where available in general. You can do an internet search for "solar cost shift" or "value of solar" & get explanations from various points of view. In particular I recommend adding Austin, CPS Energy, Pedernales Electric Coop, Minnesota, & "Ca. NEM 3.0" (net energy metering) for more specific results. 

I would also add that the way the Texas ERCOT market works under deregulation makes the situation here even more complicated, since Transmission and Distribution (T&D) Utilities like Oncor incur most of the costs of electric infrastructure but have different capabilities to benefit from the value of distributed generation than do vertically integrated utilities that control generation, storage, and customer purchasing options as well as distribution. El Paso Electric outside of ERCOT and Municipal Electric Utilities and Electric Cooperatives inside ERCOT are examples within Texas.

To oversimplify: the current fixed charges that cover transmission and distribution infrastructure for residential electric customers in Texas are regulated by the Public Utility Commision and it is generally agreed that they do not cover all of these costs. The rest of these costs are included in the "per kWh" (volumetric) charges, which also cover the cost of the energy itself. Customers who use less electricity pay less through "per kWh" charges, but still require the same grid connection infrastructure. As the percentage of these customers goes up, the lost revenue becomes significant enough that something has to change. If the costs for distributed generation customers are not increased, this results in a cost shift to other customers.

The controversies come up when proposing what to change. Increasing fixed charges for all customers is generally not considered an equitable solution. Reducing the buyback rate for electricity sent back to the grid below that charged for energy used from the grid, as with "value of solar" based rates, is another option. Special charges for customers who own solar systems is another.

All opinions here are my own.

James Orenstein


From: main@NTREG.groups.io <main@NTREG.groups.io> on behalf of Tracy Wallace <tracy@...>
Sent: Tuesday, May 17, 2022 3:37 PM
To: main@NTREG.groups.io <main@NTREG.groups.io>
Subject: Re: [NTREG] Question about electricity costs
 

Residential. Inequitable cost shifting.  That’s all I can remember.  And it is always possible that I am misremembering ;)

 

From: main@NTREG.groups.io <main@NTREG.groups.io> On Behalf Of James Orenstein via groups.io
Sent: Tuesday, May 17, 2022 2:51 PM
To: main@NTREG.groups.io
Subject: Re: [NTREG] Question about electricity costs

 

Hello Tracy,

 

Can you please provide some context for where what you heard came from?

 

For instance, is it referring to the cost of residential or commercial solar installation in general; the cost of interconnecting systems to the grid; the competition for limited incentives; inequitable cost shifting due to utility rate structures; competition for grid upgrade & modernization resources; issues around curtailment of "excess" solar; or something else/any of/all of these?

 

I'm not trying to be picky, but just want to point out this is a complicated question and that there are different answers depending on the context.

 

Regards,

James Orenstein


From: main@NTREG.groups.io <main@NTREG.groups.io> on behalf of Tracy Wallace <tracy@...>
Sent: Tuesday, May 17, 2022 2:23 PM
To: ntreg@groups.io <ntreg@groups.io>
Subject: [NTREG] Question about electricity costs

 

Good afternoon,

 

I have heard that when folks in north Dallas (more affluent areas north of I-30) get solar that somehow that pushes a higher cost to electricity buyers in southern Dallas (lower income areas south of I-30).  Can someone explain this to me? I’m in a cohort with Texas Energy Poverty Research Institute (TEPRI) and I brought this up thinking someone in the group could speak to it.  Now, I hope to report back what you all teach me.

 

Thanks!
Tracy Wallace


Mark Witte
 

So if those same affluent utility customers decided to drastically improve the energy efficiency of their homes, instead of installing solar, and caused their energy consumption to decline by half or 3/4, what would that do for cost shifting to lower income customers? Whether the lower electricity consumption is from onsite electricity production or much improved efficiency, how is the net result to the utility company any different?

Mark

On Tuesday, May 17, 2022, 06:07:11 PM CDT, James Orenstein <jorenstein@...> wrote:


This most likely refers to cost shifting from generally more financially well off residential solar customers to those that can't participate in distributed solar system options such as customers with on-site solar & "Community Solar" where available in general. You can do an internet search for "solar cost shift" or "value of solar" & get explanations from various points of view. In particular I recommend adding Austin, CPS Energy, Pedernales Electric Coop, Minnesota, & "Ca. NEM 3.0" (net energy metering) for more specific results. 

I would also add that the way the Texas ERCOT market works under deregulation makes the situation here even more complicated, since Transmission and Distribution (T&D) Utilities like Oncor incur most of the costs of electric infrastructure but have different capabilities to benefit from the value of distributed generation than do vertically integrated utilities that control generation, storage, and customer purchasing options as well as distribution. El Paso Electric outside of ERCOT and Municipal Electric Utilities and Electric Cooperatives inside ERCOT are examples within Texas.

To oversimplify: the current fixed charges that cover transmission and distribution infrastructure for residential electric customers in Texas are regulated by the Public Utility Commision and it is generally agreed that they do not cover all of these costs. The rest of these costs are included in the "per kWh" (volumetric) charges, which also cover the cost of the energy itself. Customers who use less electricity pay less through "per kWh" charges, but still require the same grid connection infrastructure. As the percentage of these customers goes up, the lost revenue becomes significant enough that something has to change. If the costs for distributed generation customers are not increased, this results in a cost shift to other customers.

The controversies come up when proposing what to change. Increasing fixed charges for all customers is generally not considered an equitable solution. Reducing the buyback rate for electricity sent back to the grid below that charged for energy used from the grid, as with "value of solar" based rates, is another option. Special charges for customers who own solar systems is another.

All opinions here are my own.

James Orenstein

From: main@NTREG.groups.io <main@NTREG.groups.io> on behalf of Tracy Wallace <tracy@...>
Sent: Tuesday, May 17, 2022 3:37 PM
To: main@NTREG.groups.io <main@NTREG.groups.io>
Subject: Re: [NTREG] Question about electricity costs
 

Residential. Inequitable cost shifting.  That’s all I can remember.  And it is always possible that I am misremembering ;)

 

From: main@NTREG.groups.io <main@NTREG.groups.io> On Behalf Of James Orenstein via groups.io
Sent: Tuesday, May 17, 2022 2:51 PM
To: main@NTREG.groups.io
Subject: Re: [NTREG] Question about electricity costs

 

Hello Tracy,

 

Can you please provide some context for where what you heard came from?

 

For instance, is it referring to the cost of residential or commercial solar installation in general; the cost of interconnecting systems to the grid; the competition for limited incentives; inequitable cost shifting due to utility rate structures; competition for grid upgrade & modernization resources; issues around curtailment of "excess" solar; or something else/any of/all of these?

 

I'm not trying to be picky, but just want to point out this is a complicated question and that there are different answers depending on the context.

 

Regards,

James Orenstein


From: main@NTREG.groups.io <main@NTREG.groups.io> on behalf of Tracy Wallace <tracy@...>
Sent: Tuesday, May 17, 2022 2:23 PM
To: ntreg@groups.io <ntreg@groups.io>
Subject: [NTREG] Question about electricity costs

 

Good afternoon,

 

I have heard that when folks in north Dallas (more affluent areas north of I-30) get solar that somehow that pushes a higher cost to electricity buyers in southern Dallas (lower income areas south of I-30).  Can someone explain this to me? I’m in a cohort with Texas Energy Poverty Research Institute (TEPRI) and I brought this up thinking someone in the group could speak to it.  Now, I hope to report back what you all teach me.

 

Thanks!
Tracy Wallace


Paul Westbrook
 

It's another tactic by the entrenched fossil industry to cast doubt on solar. There are a couple of good articles that refute the claims:
https://www.solarunitedneighbors.org/learn-the-issues/value-of-solar/why-rooftop-solar-is-not-a-cost-shift/
https://solarrights.org/white-paper-how-the-utilities-use-tricky-math-to-vilify-rooftop-solar/

Bottom line: Solar on any roof benefits everyone.

Paul


Tracy Wallace
 

Thank you!!


From: main@NTREG.groups.io <main@NTREG.groups.io> on behalf of Paul Westbrook via groups.io <pwestbrook@...>
Sent: Wednesday, May 18, 2022 6:30:23 AM
To: main@NTREG.groups.io <main@NTREG.groups.io>
Subject: Re: [NTREG] Question about electricity costs
 
It's another tactic by the entrenched fossil industry to cast doubt on solar. There are a couple of good articles that refute the claims:
https://www.solarunitedneighbors.org/learn-the-issues/value-of-solar/why-rooftop-solar-is-not-a-cost-shift/
https://solarrights.org/white-paper-how-the-utilities-use-tricky-math-to-vilify-rooftop-solar/

Bottom line: Solar on any roof benefits everyone.

Paul


R. Michael Martin
 

…and I see it as our obligation to call out this biased practice wherever we encounter it as advocates for distributed, clean, accessible power for all.


On May 18, 2022, at 06:30, Paul Westbrook via groups.io <pwestbrook@...> wrote:

It's another tactic by the entrenched fossil industry to cast doubt on solar. There are a couple of good articles that refute the claims:
https://www.solarunitedneighbors.org/learn-the-issues/value-of-solar/why-rooftop-solar-is-not-a-cost-shift/
https://solarrights.org/white-paper-how-the-utilities-use-tricky-math-to-vilify-rooftop-solar/

Bottom line: Solar on any roof benefits everyone.

Paul


axisdesign@...
 

Thanks for the article links Paul. Quite informative. Obviously Utilities are concerned about efficiency when it comes to production & transmission, because that affects their profit margins and ROI.  But they make money by selling more electricity, not less. So there are no incentives or rewards for consumers coming from Utilities to use less electricity, whether it comes through conservation, using more efficient electrical equipment, or distributed generation.
There's an analogy in healthcare: selling cure comes before incentivizing prevention. There's an analogy in waste management: trash and recycling receptacles should be weighed, and those who produce less should be rewarded. We have to change the way consumption is incentivized to get to the bottom of this problem.


Jim Duncan
 

Oncor began considering offering incentives for solar PV [also industrial lighting, HVAC and other commercial & residential energy savings strategies] during their their former anti-competitive and unprofitable business relationship that included TXU and Luminant because of violations of air quality regulations. After their breakup, their choice of penance was to offer those incentives, residential & commercial.
In the meantime that vertically integrated TXU was broken up and the finally profitable stand-alone Oncor continued with the incentives, having discovered that it made sense and was apparently profitable to not have to expand their T&D infrastructure quite so fast.
The first year was 2009 and the incentive amount was a healthy $2.40-something per DC Watt. It took a year or so to catch the public's attention but meanwhile so-called solar installers came out of the woodwork. Fortunately most disappeared without a trace.
Steven Weise and his Austin based Clean Energy Associates administrated the Oncor program the first year or two until they figured it out for themselves and it continues to this day.

Jim....

Jim Duncan
Solar Acres Farm
817.917.0527
solarguy2004@...
On 5/19/2022 4:13 PM, axisdesign@... wrote:

Thanks for the article links Paul. Quite informative. Obviously Utilities are concerned about efficiency when it comes to production & transmission, because that affects their profit margins and ROI.  But tbecause hey make money by selling more electricity, not less. So there are no incentives or rewards for consumers coming from Utilities to use less electricity, whether it comes through conservation, using more efficient electrical equipment, or distributed generation.
There's an analogy in healthcare: selling cure comes before incentivizing prevention. There's an analogy in waste management: trash and recycling receptacles should be weighed, and those who produce less should be rewarded. We have to change the way consumption is incentivized to get to the bottom of this problem.


axisdesign@...
 

Thanks Jim, and I met Steven Weise years ago at a conference and we had an interesting conversation. Unfortunately Oncor's incentive program is quite small, and had gotten smaller when we investigated it recently for Bill Byrom's house in Irving. It also has A LOT of restrictions. Although I know they have to be detailed, and have to insure compliance, ONCOR is definitely not making it easier for more people to participate.