Solar Discussion

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Tuesday night the municipal council voted to take another look at the solar fee issue. I’m not sure if I remember an issue that has had so much agreement about the goals and so much disagreement about how to reach them.

At the risk of confusing all of us even more, I’ll try to explain the problem in bite-sized pieces. It’s worth understanding even if you need to read this post several times.

Where does my money go after I pay my power bill?

All of the residents of Provo buy power from Provo Power. For many reasons when we pay our power bill we all pay a portion to items that are not directly related to the amount of power we use. Your power bill includes a portion that pays for iProvo, roads, street lights and even items in our general fund such as police and fire. In addition when you pay for power you’re paying for the power grid that delivers the power to your home. This is a fixed cost that does not vary as you use more or less power. The reason we have these other costs associated with your bill is complicated but it validates how much of a value your power is in Provo. Even with these additional costs, Provo Power provides energy to our homes for less than surrounding cities who buy theirs from other sources.

How is the growing population of solar users impacting the power grid?

When solar users dramatically lower their power bill they are also lowering their participation in other power grid costs. The great concern is that as solar users grow, fewer and fewer people will be carrying the burden of paying for the grid. In a recent survey, 75% of our residents stated they might invest in solar in the next 5 years. Imagine if 75% of our residents were not paying for the grid and yet at the same time were reliant on that grid to power their solar system and provide power when the sun wasn’t shining.

I read the controversy but exactly what passed the council a few weeks ago?

The original proposal of the council was to add a surcharge to the bill of solar users to help cover the cost of the grid. For the average solar user, the fee would have been approximately $18 per month. Understandable, this caused great concern to those who had invested large amounts of money in solar and to those who hope to invest in solar in the future.

Where do I fall on the issue?

I appreciate those who are willing to invest in solar. Some do it for economic reasons, some to be green and others because they want to be self reliant. Regardless, I want to encourage those who are willing be be early adopters and invest large amounts in solar so that it paves the way for others to follow in the future. That said, I’m not willing to sacrifice the long-term sustainability of Provo Power to obtain this goal. We need to find a way to do both.

Should I look to invest in solar now?

The council’s actions of this recent Tuesday night pushed a restart button on the discussion. They gave themselves and the community 90 days to see if we could come up with a better solution. The goal is to put together a commission to study the issue and make a recommendation to council. It’s important that residents considering investing in solar understand that the council is debating fee increases and that they factor the likelihood of changes into their decision.

Part of the council’s actions added this to the Provo City application for solar, “Fees, charges, and rates described herein are subject to change at any time by action of the Provo City Municipal Council. Such changes include, but are not limited to, increasing, reducing, or eliminating established fees, charges, or rates; modifying or removing existing rate classes; adding new rate classes; and adding new fees, charges, or rates, whether such fees, charges, or rates are applicable to all Provo City Power customers or only to customers in a defined group or class that includes Customer. Changes to fees, charges, and rates may reduce or eliminate any return on investment (ROI) anticipated by the Customer when installing an electrical generating system.”

Some may worry that this warning will put a chill on solar sales but the council is not willing to have residents make a decision without a notice that these issues are under consideration.

No doubt, many of our residents will want to follow this discussion during the next several months.

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  1. Jamie

    It seems to be that if you’re using the grid, you need to take part in its upkeep. It Shouldn’t matter whether that use is taking power from the grid, or giving power the grid. But one question I have is, how does Provo feel about homes going completely off grid? If folks want to install solar, add a battery system, and disconnect from the power grid, how would the city feel about that? I’m less inclined to see those folks paying a maintenance fee for the grid. They might still have other bills to help support police, fire, sewer (as much as I like the idea of people also engaging greywater systems and compost toilets, that could go south really fast), garbage, etc.

    I hope that in my lifetime all homes have their own power systems, the same way they now all have toilets and running water (still usually supplied externally, but you know what I mean).

    This still leaves a question about how we avoid a broken-down ghetto grid for those who cannot afford the transition…

    1. David Bailey

      Agreed.

  2. Samie

    An earlier report I read said there are only 160 solar users thus far in Provo, perhaps there is a way to grandfather in those who have already invested in solar without realizing Provo City was thinking of adding a fee to those with solar. There is definitely a precedent for that in Provo in land use issues and it seems like the fair thing to do. Future customers will go into solar use knowing up front there will be a charge to be hooked to the grid and can make their decision accordingly.

    1. John

      Samie – Thanks for posting. This will part of the discussion. Stay tuned.

      John

      1. Adam

        Agreed. Grandfathering existing solar users is fair and logical, considering the terms of our net metering agreements we signed with the City. We really appreciate the thoughtful approach your office is taking in making this decision.

  3. shawn miller

    Thanks for the clarifications, Mayor.

    This should be a partnership between users and Provo Power, cooperating to make grid-tied systems work for everyone who wants to install one. The reality that Provo Power should keep in mind is that we may soon see battery technology cheap enough that those who face heavy fees will simply decide to go off-grid, which would not just reduce demand for power but would eliminate customers entirely.

  4. A.J. Bobo

    As a (soon to be) solar customer, everything surrounding this fee concerns me. The original proposal of a $3 per kilowatt/hour fee sounds simple on the surface, but feels unfair since it is applied only to solar customers and does not take into account how much their systems actually produce. Now I am concerned that something worse will be put in place. I have a lot of thoughts on this issue, please bear with my rather long post here.

    – Payments and Charges –
    I don’t know everything happening in the background, but my view of this is fairly simple: all customers should be charged for three things: 1) Infrastructure access and maintenance, 2) How much electricity they actually buy from Provo Power 3) Extra Provo charges (fire, police, general fund, etc). (Side note: why is #3 part of my power bill and not happening through some other system like property taxes?) As I understand it, these charges are rolled together in my current bill.

    I understand and support the need to pay for infrastructure. I have no problem with that, provided the cost is equitable for all Provo Power customers, and does not target any single class of customer unfairly. Unless the infrastructure cost for a solar customer is considerably higher than the cost for a non-solar customer, I feel that everyone should be charged equally, regardless of the amount of electricity used.

    Now, regarding usage, this is where net meters come in. My solar panels will create some amount of electricity. This electricity will be sent to Provo Power’s grid and not counted against how much I use. In other words, if I produce X kWh of electricity and I use Y kWh, then I expect to be charges for only Y-X, which is the difference between what I took out of the grid and what I put back in. As I understand it, this is how net metering works, but has the side effect of reducing how much solar customers pay for infrastructure. Other low energy customers (people that used low power bulbs, etc) are also not paying as much into the infrastructure. Why are only solar customers being targeted? The existing system is already unbalanced, and the solar fee doesn’t address that.

    – Future plans –
    I think that before any new charges are added to bills, Provo Power needs to provide the following information:
    1) How much does infrastructure cost per year?
    2) How much extra does it cost to hook up and support solar customer? Are solar customers really requiring that big a change to the infrastructure?

    If, in the next 90 days, the City Council and Provo Power are not able to determine exactly how much financial strain solar customers are putting on the system, then I feel that they should not change the current system. If they don’t have enough information to change the pricing structure in a truly fair and equitable manner, then any choice they make will be a shot in the dark and will be seen as hostile towards solar customers.

    As I understand it, the $3 fee was the result of recommendations from a consulting firm that really didn’t look into all options. In the next 90 days, the City Council and Provo Power need to look more closely at finding a solution that isn’t nearly as extreme and isn’t as heavy-handed.

    – Provo Hypocrisy –
    Earlier this week, Provo Power had the grand opening of their new building. That’s excellent. There’s a post on this very blog about it: http://provomayor.com/2016/10/17/provo-power-grand-opening-celebration/ This is a quote from that post about the new building: “Our new state of the art facility is LEED GOLD certified, which includes a large array of solar panels, and portrays our dedication to our customers that being energy conscious is important to us and adds value to our community.”

    I can’t help but feel betrayed. This sounds to me like both Provo City and Provo Power are saying that they can use solar, but they don’t want anyone else to. Why wouldn’t they want us to use solar? Simple. They want the money.

    Once again, I think that if all customers are paid a flat fee for Provo infrastructure, and then charged separately for power usage, this issue would go away.

    – Contract changes –
    The new notice added to the solar application is true and accurate, but is also openly hostile to solar customers. I’ll admit, most customers probably won’t read it, and Provo Power is probably counting on that. However, if Provo Power is going to say something this antagonistic to solar customers, they should simply put a moratorium in place for new solar installs until they can figure out a reasonable and fair way to charge customers.

    If I had known this was coming (and it all happened about a week after my panels were installed, but before they were turned on) I never would have jumped into solar. As it is, I have panels that have been attached to my house for 3 weeks, while I wait for Provo Power to install a net meter. They are in no hurry to do this, or to return phone calls about it.

    – Additional Conversations –
    When the fee was announced, Facebook, at least, blew up with conversations about this. Here’s a link to a summary of one such conversation that I was involved in with several of my neighbors and at least one City Council member: http://provodistrict5.blogspot.com/2016/10/solar-thoughts.html

    – Summary –
    In short, I am asking the Mayor and City Council to do the following:
    1) Determine whether or not Provo residents will actually be encouraged to invest in solar. If they don’t want residents to have solar, just say so and don’t accept solar applications.
    2) Determine a truly fair and equitable way to charge customers for infrastructure and city fees. This should include low usage customers, regular customers and solar customers.

  5. shawn miller

    Sorry. Just one other thought.

    One way the city could better work with solar producers in a straightforward, transparent way is vary the rates at which we both pay and get paid for electrical use and production over the course of the day. The main problem with solar is that its peak production is usually well before peak consumption, especially in summer. South facing panels produce the most overall, but they produce best from 11-1. But peak demand comes later in the afternoon and in the evening. If the city paid higher rates for power produced during peak demand, solar installers would be putting more panels on west facing roofs. In the summer, a west-facing roof can produce most of its electricity from 2pm all the way to 9pm in the summer month. And users should be paying higher rates as well at peak times. Many utilities offer much lower rates for off-peak use. In Texas, some are giving away power free to any house in the middle of night, so everyone is running the washers, dryers, dishwashers, and etc when they are free. In the end, we could all be paying the same overall for power, but our utility could take substantial benefits in spreading out the load and the supply.

  6. Aaron Burgemeister

    Disclaimer: I use solar for power generation on my home, and have attended both of the recent Municipal Council meetings on the topic.

    Mayor Curtis, I appreciate the government’s (both branches) willingness to look at this again, hopefully with a few more perspectives than seemed to be involved last time (perhaps that perception is wrong, but I heard no refutation at the October 4th meeting). Some additional questions/answers, as I understand them, follow. Please feel free to correct anything that is incorrect. These were questions I had, and now are answered based on the council meetings, so they may be questions others have, or may help them better understand the accounting issues.

    Q. Infrastructure costs are relatively fixed regardless of actual power used by the city, meaning my meter, lines, and “grid” will be the same regardless of whether I go on vacation for a month turning everything off, invest in solar, or buy a dozen freezers and run them full time in the middle of the summer with two A/C units. Why are fixed costs being billed based on variable power usage?
    A. I believe the answer is basically to help encourage conservative power usage, as well as to help those who perhaps cannot afford $27/month in fixed costs that would otherwise be there regardless of power usage. This means that people who use less power cover a smaller portion of the fixed costs, and those who use a lot (net) cover a larger portion. Solar users clearly use less than they would otherwise when able to generate power (ceteris paribus), and based on the statements at the meeting it is also assumed that those who can afford less consequently use less power. Consequently, non-solar users are viewed as covering fixed costs of solar users just like higher-power users have always been covering fixed costs of lower-power users of any kind.

    Q. With net metering is it possible for the Provo Power to pay money back to those with solar if they generate more power than they use? Can I invest in solar for supplementary income?
    A. No, though it is possible for somebody with solar to amass a credit to cover future months’ expenses should they not cover their own power needs in a future month, but only until early in the year (March/April) when that credit is wiped away financially. As a result, it is possible for generators of solar power to provide power for free to the rest of the community should there remain a credit at the end of the fiscal year (March/April). Some of those with solar at the original Council meeting were in this situation, though only Provo City Power probably has a comprehensive list of which owners provide how much.

    Q. Do those with solar benefit our air or environment?
    A. Sure, though maybe not as much as they may believe at first. This really depends a lot on the owner’s lifestyle, home, etc. For example, if the owner drives an electric vehicle, then offsetting vehicle emissions can be done by charging at home as many do. If the owner’s home is heated via electricity (vs. natural gas or wood-burning fire places) then the benefits also apply there, causing their homes to generate fewer carbon emissions that directly impact our air quality. Since the bulk of our city power is not generated locally, the fumes from the power plants probably impact somebody somewhere else, and those who decrease their net usage (via solar or conservation) may benefit those living closer to those power plants in some way. Where are those plants? I do not know.

    Q. I do not have solar, and I cannot afford solar today, but I want to be “green” in some figurative sense. What are my options?
    A. For a couple years now, Provo City Power has provided the ability to voluntarily increase your bill by a few dollars per month to opt in to “green” energy sources. Basically you choose to pay $1 per unit of power above what you would normally be charged, and Provo City Power uses that money to buy power from greener sources (solar, wind, etc.). The idea is that by letting people send their money to greener sources, they are doing good for the environment, and possibly helping the economics that make those sources more-efficient play out faster, meaning they get cheaper and can someday become the primary method of powering our city/state/country/world. Check your power bill online, or call 311 for more information.

    Q. Why is a change back to the normal so hard for those solar people t handle?
    A. Solar’s photovoltaic technology is expensive. Many invest in solar, as the Mayor mentioned, to be self-reliant (potentially providing power during a prolonged outage, or just supplementing power on a day-to-day basis), to be “green” (helping the environment), but many do so in order to save money in the long run. The “long run” is measured in decades. From a financial point of view that may not seem like a great investment when compared with other alternatives, but it is within reach for some, where other items like real estate may not seem feasible, or stocks may be seen as too risky. At the end of the day, if a system will be paid off in little savings of $50/month (via offset power costs) then $600/year ($50/month * 12 months) will pay off a $12,000 system in twenty (20) years ($12,000 / $600 == 20).

    Q. If it takes twenty years to pay off the solar investment by offsetting power costs, how does the addition of $3/kW capacity impact that house with solar in a way that would matter?
    A. For the system above, the $3/kW would amount to something like an additional $10.70 / month in fees, and this is a relatively small system that generates a mere 3.5 kW at a time. To the owners with solar only, they are now saving not $50/month in offset costs when solar generation is working at full capacity (sunny days, long days in the summer), but are now saving just $39.30 per month. The $12,000 investment then requires 25.4 years to pay off, instead of “just” 20. The biggest problem for some is that the decision to invest in solar was made based on the ability to pay it of in a certain time period, and now that time period will be significantly extended because of the changes currently proposed by Provo City Power. The numbers above are just examples, and generally get worse for larger systems (bigger investments) due to the decreased likelihood of grandfathering (the original ordinance grandfathered the first 2 kW capacity), increased chance of having a yearly credit donated to Provo City (no benefit to the solar owner), etc. Back in 2009 Provo City’s Municipal Council was recommended to make the change to Net Metering, and as a result a couple hundred households have implemented solar, likely depending on a return on that investment within a particular period of time. That same council is now, long before any investment could have been “paid off” by power savings, proposing changing the rules in such a way that the investment makes less sense, or may never make sense. The deal may be the best for those who invested right away since they were able to start saving money right away, but for those investing this year, or last year, the numbers are grim.

    Q. Could those who invested in solar under the current model have the promises made to them by the city maintained by grandfathering the net metering agreement?
    A. Yes, the Council could vote to include grandfathering for enough time to make the investment’s conditions remain the same for those who have already invested in solar. During the October 4th meeting, they did so for a limited number of kW capacity. One problem with that method is that is does not cover the majority of the investment for the majority of those who invested in solar counting on Provo’s Net Metering policy. Another problem is that it does not fully address the underlying problem of infrastructure costs that the city claims it needs to maintain its fixed costs for infrastructure.

    Q. What happens if people go completely off-grid in Provo?
    A. Currently that is not legal. If it were legal, those people, though still residents of Provo, would also not be paying to make Provo City Power profitable, which would also mean a decreased bit of money to Provo City’s general fund, etc. This also, perhaps, underscores a fundamental accounting and money management problem where profits are relied-upon from one activity to fund other activities. Either way, right now it is not legal so should never happen.

    Q. How do I get on the commission to help work this out in a way that aligns with my views?
    A. Not sure, but count me in too. 😉

  7. Doug Jenkins

    Is it true the power-generating customers (with personal wind/solar production infrastructure) are paid retail rates for reverse metering?

    If so, wouldn’t this issue all go away if they were paid the same rate as any other wholesale contributor to Provo’s power supplies?

    Just call reverse-metering Provo residents a supplier and pay them the same wholesale rate as any other supplier. I believe that supplier rates already cover Provo’s infrastructure costs, don’t they?

    1. John

      Doug, You are correct. We pay retail rates for the solar. We are in the process of installing new meters but the current meters don’t give us the details we need to charge a different rate.

  8. S Lewis

    Solar isn’t sustainable. Our federal tax dollars are being used to subsidize every installation (in the form of tax credits that are often inflated due to the appraisal/FMV basis and then used to benefit large corporations rather than consumers).

    A consumer can only claim the credits if they purchase the system outright but companies like Vivint Solar push their lease and PPA options because the tax credits are used by Vivint Solar to sell to the corporations I mentioned before.

    Mayor I think this is misstated/confusing: In addition when you pay for power you’re paying for the power grid that delivers the power to your home. This is a fixed cost that does not vary as you use more or less power.

    I believe you are meaning to say that the fixed cost that’s part of our bills is to pay for the other things while a portion of what is paid for each kWh is used to cover maintenance of the grid. Is that correct?

    I hope to see Provo be forward thinking to protect all of us from those trying to save a few dollars and not pay their fair portion of grid maintenance costs.

  9. John

    The environmental benefits of solar are something that prompted me to install solar, and it has been much more of a finacial burden than a benefit so far. I am not sure it will ever really break even after watching the system’s performance after the first year. If it does, it will take 17-18 years if the panels operate at the same efficiency the entire time (which I understand is not the case). Currently solar power barely makes financial sense, but I am proud of my contribution to reduce the speed of global warming. My system as it stands still only produced approx 75% of the power I consume, so I still have a power bill, especially in the winter. If you added 18 dollars to my January power bill for my 7 kW rated system (which only generated 200 kWh last January), then my power bill would be nearly the same as if I didn’t even have solar panels. Please consider very carefully these issues as you make public policy going forward.

    Also please announce any meetings regarding this so we can attend.

    1. Samie

      This has been true of us as well. After the solar company assessed out last years electric consumption, we were given a optimum solar panels we’d need to install in order to “break even”. Their assessment was that our electric bill would average about $4.00/mo. Our last electric bill was $45.00. While that is still lower that what it had been and I feel good that we’re producing more than half of the electricity we’re consuming, it definitely wasn’t the result we were expecting. We haven’t gone through a winter yet with solar so an additional fee of $18.00 could make whatever “gains” we’re seeing almost nil. While I am glad we were in a position to install solar panels and make our small contribution to reversing climate change, as stated above, we are not going to see any financial gain for years and years. As I’ve driven around, I’ve seen homes that have only a few panels, hardly enough to produce all the electricity their home needs (in my layman opinion). An additional fee (and $18.00 is a SUBSTANTIAL fee!!) seems like a punishment to those who have, or want to, install solar panels!

  10. Will

    In my opinion, the biggest problem with the bill that was passed was that it was imposing a tax/fee/whatever you want to call it based upon the theoretical maximum capacity of your system. Whether it actually produced it or not, whether you used it or not, it also didn’t state if that was the AC or DC power it could theoretically generate. Converting the DC power of solar panels to AC loses power. So if you bought too many solar panels, that generated more than you needed… not only did Provo get that extra power to sell to it’s other customers free of charge, they effectively taxed you for the privilege of giving them extra power. Other issues is Solar panels degrade over time yet the tax did not get reduced as well as panels don’t actually produce what they advertise… the companies advertise them with having a potential of being within %5 or %10 within advertised capability.

    I signed a contract for solar panels in September before I even heard the city council was going to change things. I agree that solar panel customers need to pay for the service that Provo Power provides. With net metering, Provo Power is effectively acting as a battery for solar customers.

    I believe with any compromise the following items need to be taken into consideration, and we may need the new AMI meters that will show power usage at what time of day to truly take some of these into consideration:

    1) The power that solar panel customers provide to Provo Power is consumed locally which reduces the loss of power by having it transmitted over long distances. That effectively makes the power provided by solar panel customers worth more than power purchased from UMPA at the time when the panels are generating more than needed.

    2) I believe power costs different amounts at different times of day. During peak hours which, according to the Dave Berg Consulting Report is between 2PM-8PM when solar panels aren’t generating as much power. This difference in cost could make it so when Provo gives the power back to the solar panel customer it costs Provo Power more than what they got out of the power that the customer over-generated.

    3) The energy credits that get wiped out on April 1st represent extra power the customer gave to Provo Power that Provo Power sold to another of their customers. That represents money Provo Power made off of the solar customer that does help paying for upkeep. The only time this is not the case is if Solar Panel customers generate more power than all of Provo uses at any point in time. We are a long ways off from this.

    4) There is a limit to how many solar panels can be installed in any local neighborhood. The local transformers for each neighborhood needs to be able to support the extra power generated. When that limit is reached, the transformer has to be upgraded before they can safely support more solar panels. This effectively means while 75% of the people may want to install solar panels, the city couldn’t let them without spending a lot of money to upgrade the transformers.

    5) If I understand correctly, residential customers are already being subsidized by business Provo Power customers. Also, the rates are designed so that the heavy power users subsidize the low power users. We need to be careful about targeting a specific small group of people saying they shouldn’t be subsidized while all the other residential customers and low power users are being subsidized.

    6) Even installing a battery system to go completely “off the grid” isn’t necessarily a viable option. If your only power generation source is solar, what do you do if you generate little to no power for a long period of time, thus not replenishing your batteries. I remember a period of time when there was heavy cloud cover and rain for two weeks straight about fifteen years ago. Serious snow storms could have the same effect. Unless someone is ok having no power sometimes because of weather conditions, they probably will still want to be connected to have a backup just in case.

    I believe that the AMI meters will be needed to make any sort of compromise truly fair. I do not believe that we should be taxed on the extra power credits we generate that we never get back because they are wiped out on April 1st. I also do not believe that we should be taxed for the power we generate that never goes back on the grid that we consume ourselves; that is effectively taxing someone for reducing their carbon footprint. To me that is similar to taxing someone for installing energy efficient appliances or light bulbs or taxing them for turning off their air conditioner end enduring the heat so they don’t use as much energy.

    I do believe that if Provo City is not getting money to support the infrastructure costs, then they ought to consider raising the $6.44 they already charge everyone (I am not including the telecom debt charge because that is supposed to go away when the fiber optic network debt is paid off).

    When AMI meters are finally installed everywhere they may want to make power cost different amounts at different times of day based upon how much UMPA charges for the power. Instead of getting credited in kilowatts for putting power back on the system, maybe the customers should get credited in cash for putting power back on the system.

  11. Deren Hansen

    The question of residential solar energy systems is actual the tip of the proverbial iceberg, and actually obscures the deeper issues.

    The fundamental problem is that PROVO NEEDS TO RESTRUCTURE ITS ENTIRE ELECTRICITY RATE PLAN.

    Because it will take time to develop and approve a new rate plan, THE INCREASING RATE OF SOLAR INSTALLATIONS IS A PROBLEM.

    What is needed now:

    1) AS A MATTER OF CONSUMER PROTECTION, is a REDUCTION or moratorium on NEW SOLAR INSTALLATIONS UNTIL THE NEW RATE PLAN IS APPROVED because owners cannot accurately determine the rate of return on their investment.

    2) A firm TIMETABLE FOR DEVELOPING AND APPROVING THE NEW RATE PLAN, including ample opportunity for public participation so we can develop a broad consensus.

  12. James Ollerton

    Why doesn’t the city develop it’s own solar field so that we are all taking advantage of solar power and we are all paying for it together?

  13. Scott Froerer

    As a solar energy producer, I have two concerns. 1st, using Provo Power billing to pay for “iProvo, roads, street lights, and even items in our general fund such as police and fire” is a hidden tax and should not continue. 2nd, future technology (perhaps within 5 to 7 years) will create such power efficiencies and production levels as to eliminate the need for a homeowner to purchase any additional power.

    Tax fund sources should be adjusted. Provo Power should immediately prepare for this near-future reality.

  14. Rob

    I agree with Scott. It seems like currently the city views Provo Power as a way to raise general funds instead of an efficient way to deliver a needed commodity to its residents. In that light it seems pretty clear that the two, recent, large electricity rate increases were non voter approved tax increases. I am getting tired of tax increases.

  15. Jerry Chadwick

    Seems simple to me. Separate fixed costs for infrastructure, police, fire, etc. from the variable/consumption-based costs. Then everyone is charged equitably.

    However, one thought. What are other municipalities doing? I know one individual here at work who has solar. He gets to “store” power in the grid from the Summer months to carry through the Winter months. Then, in March (or, maybe it’s May, I forget), he sacrifices any power left “stored” in the grid that he didn’t consume and his tally resets for the upcoming year. I assume that, that is to cover cost of using the grid as his storage. Seems reasonable to me.

    1. Angela

      I agree with many of these comments but reply to Jerry’s because he aptly states that this is simple. Separate fixed costs (including the metering fee since everyone is on the meter) from consumption-based costs. Otherwise, you penalize people for using solar but ignore those with low usage for other reasons. That’s not particularly just.

      I’d like to add that, rather than dealing with the “problems” associated with residential solar use, the City should be a little more forward-thinking and do what’s necessary to make renewable energy affordable and our primary source of power. It’s good for the planet; it’s good for residents’ pocketbooks; it’s good for progress.

      1. John

        Yes, what you have said here makes the most sense and seems very simple. I feel the need to add a “+1” here or something because it seems like the absolute best idea.

        Simply charge everyone a fee to be hooked up to the grid. Do some research to see what that price should be and charge everyone that price. Separate electrical consumption from grid connection, and charge what needs to be charged separately. If you try to target solar as a problem now, you are only going to be pushing the issue down the road if some other source becomes popular and widely adopted (think wind power for example), or if people just installed gas powered electrical generators to their homes or something else we cannot imagine right now.

  16. Jeff sanford

    Charging solar homes a fee will never fly. I agree with those advocating the restructuring such that each home pays for the services each home uses.

  17. Brent

    I currently reside in California, but have a home in Provo and likely will relocate there when I retire. I have solar here and am considering solar on the Provo home, so I ran across this in researching. In California, we are on an annual billing, so that usage in Winter months is offset by production in Summer, assuming that the a/c in the Summer doesn’t use the offset. Currently, we may a very minor fixed cost to be hooked up to the grid. It would be very impractical for me to have battery storage capacity to accomplish this. My initial research shows that at the sun angles for Provo and the cost of power from Provo City Power, solar does not make sense other for environmental reasons. The system has to be designed to turn off if the grid goes down, so it doesn’t provide any back for self-sufficiency in case of a power outage. A lot of the decision comes down to the question is the City wants to continue to produce and/or buy additional power if the demand continues to grow, or if they want to make it viable for residents to internally generate that capacity. Whatever the decision, I consider it unfair to to change the rules mid-term and not grandfather, as investment decisions are made on the cost structure at the time.

    1. I was very disappointed in the city council’s initial decision. I’m hopeful the commission working on a recommendation will come up with something smart, not just a higher fee/tax. I started an online campaign to encourage the city council to take the issue seriously: https://www.change.org/p/winterton-gary-gmail-com-provo-city-for-technology-jobs-and-growth

      Hopefully more people will reach out to their city council member and express their desire to do this right.

  18. Jim Sandoval

    Sometimes I wonder what if the telephone company had done something similar to this and when cell phones were coming and had asked for a fixed amount of money if you cancel your land line. The only difference I see is that the electric carries taxes that the city does not want to lose.

  19. William Taylor

    It is all about marketing. Solar on every rooftop would benefit the city greatly, but by creating a fee (whether that fee is just a tax for other services), it doesn’t come across that way when people look into buying solar. So lets separate, on a permanent basis, those fees from peoples power bills and tack them on somewhere else. This way when people look into solar, it doesn’t de-incentivize them into getting an alternative energy and taking control of their power needs.

    Potential solutions:

    1. Get rid of the extra fees on all power bills
    2. Move extra fees into another area, sales tax, etc and gather it there.
    3. Move extra fees into the permitting process
    4. Besides, any extra power generated the city gets the credit for having renewable energy and doesn’t have to ruin land somewhere with a solar farm. Rooftop solar is the most environmentally friendly way to go green.

  20. Chris

    I’ve thought about this for a long time. I agree with many of the comments above. Here’s some of what I’ve come up with.

    The electrical rate system needs to be re-structured.

    Fixed costs need to be separated from the variable ones. These fixed costs should only include those costs directly related to the electrical distribution system, including infrastructure. The actual cost of the electricity must be kept separate. However, there should be two elements to the fixed costs. First, there should be something like a connection fee, where any residence or business with an electric meter has a fixed, constant monthly fee, whether or not any electricity is used. There would probably need to be at least two different rates, one for a residence, and another for a business. What percentage of the total fixed costs this element should be would need to be determined.

    The second element of the fixed costs would be included as part of the electric rate. It should be a fixed “x” amount for every kWh. Those who use more electricity would pay more towards this portion of the fixed costs. And, those who use less pay less. The biggest reason to have a portion of the fixed costs tied to electric use is to have high-use customers (those who use more, and as a consequence put a higher strain on the system) pay more towards the fixed costs.

    It could even get more complicated through a tiered use system where electrical customers pay “x” if their use is less than “y”, but then pay x+x1 when electrical use is between y and y1. The x-rate would continue to increase with increased electrical use. Obviously, the high-use electrical customers (those who use the infrastructure the most) will be faced with paying more towards infrastructure costs, and/or look for ways to reduce their electrical consumption.

    Smart metering, where rates are increased during peak hours and decrease during low-demand times, could also be implemented.

    Solar users with net metering should be paid wholesale rates. Getting the retail rate would be nice, but if they are providing power to the grid they shouldn’t be receiving more per kWh than the main electrical power provider. And since the power provided from their solar power isn’t as reliable and constant (for example, much less solar power is generated on cloudy days) as the electricity the city receives from its providers, the rate should definitely not be more than what the city pays its main providers.

    Like others, I am not a fan of the non-electrical-system fees and taxes that are added into the power bill. Ideally these would be separate. It really doesn’t make sense for revenue from electricity to be used to fund non-electric projects, such as roads, but finding a revenue path that relates more specifically to the use of those services can be challenging. So, it may need to be that these other fees/taxes be included with the utility bill, as a constant fee that all customers with meters connected to the grid would pay each month.

    I’m not a supporter of increasing property taxes. Property tax is, in my opinion, unfair. It means you never own your property, you just rent from the government. Politicians like property tax because it is reliable, convenient, and easy. After all, you can identify how many parcels there are, what their rates will be, and you know that real estate isn’t going to move, so the amount of tax revenue is fairly reliable from property tax. And if, as a politician, you can convince enough people (mostly non-property owners) to support property tax increases, it doesn’t matter what the property owners want, the taxes will be increased.

    Other taxes are always a challenge. Sales tax imposed by a city can result in people taking their business to a city with less or no sales tax. Same thing for income tax imposed by a city–people could just move so they are no longer residents and not subject to that tax.

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