Selected category: Electricity Pricing

Utilities’ Rate Designs Can Help or Harm Solar Adoption

Solar_panels_on_house_roof_winter_viewA recent study by the Lawrence Berkeley National Laboratory (LBNL) concludes that the way a utility charges customers can greatly influence whether they will install solar panels. It is a timely analysis because utilities across the country are redesigning their rate structures to accommodate our changing electricity system, which is becoming cleaner and more efficient than ever before.

What’s unfortunate is that some utilities are intentionally trying to destroy customers’ incentive to install solar panels. Why? Because rooftop solar reduces shareholder profits and revenue for utilities.

Solar Electric Power Association (SEPA), a solar industry trade group, reports that in 2014, residential customers installed solar panels at an astounding 36 percent growth rate compared to 2013. But the LBNL study says the rate design changes now being proposed by utilities across the country could slash solar panel growth up to 60 percent. Clearly, poorly designed rate changes could devastate the potential for solar panels to help transform the electricity sector. Regulators should not let this happen.

Utilities have the opportunity to change their rate design to provide incentives for more solar adoption while also recouping investments and properly balancing their books. Read More »

Also posted in Solar Energy, Utility Business Models| Comments are closed

A Stealth Tool to Modernize the Electric Grid

Electricity regulators, clean energy innovators, and rappers have all lamented poor communication. And some have pushed for cleaner, cheaper, more reliable solutions for meeting our energy needs. This is particularly so with the much anticipated emergence of a new kind of non-event based, price-responsive demand response (DR), or flexible DR.

Whereas traditional DR signals customers to voluntarily and temporarily reduce their energy use at times when the electric grid is stressed, this type of DR does that and more. The big difference? It signals customers, their appliances, and their electric vehicles to increase their energy use when electricity is clean, plentiful, and cheap.

For example, electric vehicles can be programmed to charge at mid-day when the sun is bright and solar energy is at its peak, and use that stored energy when the sun sets. Better yet, many of our cars, homes, and appliances can be programmed to monitor grid conditions in real time, via the Internet, and respond accordingly by charging or defecting. Also known as a “set-it-and-forget-it” feature, this function enables the seamless integration of flexible DR while also supporting the full potential of energy efficiency measures and distributed energy resources (DERs), like rooftop solar and energy storage.

The seamless and stealth nature of this type of DR, which can be largely automated by tools and service providers, is something neither the customer nor the utility have to think about. It’s like a secret agent, operating behind walls and wires to find the greatest energy (and cost) saving-potential. Regulators need to unleash this “secret agent DR” by rewarding it fairly and efficiently in the energy marketplace, giving it a “license to thrill” in households and businesses across California. Read More »

Also posted in California, Clean Energy, Demand Response, Energy Efficiency, Energy Storage, Renewable Energy, Smart Grid, Time of Use| Read 1 Response

Ohio’s FirstEnergy Buys Customers’ Electricity Using a No-Bid, Self-Dealing Contract…It’s Déjà vu all over again

CaptureitIn a long-awaited hearing which began last week, Ohio’s largest utility is seeking approval for a rate hike of $3 billion. FirstEnegy is asking the Public Utilities Commission (PUCO) to force customers to pay for its old, dirty, uneconomic coal plants and a nearly-expired nuclear plant.

Although there are many reasons to oppose the bailout proposal, one key objection is that FirstEnergy’s sister company – FirstEnergy Solutions – owns these power plants. Rather than undertaking a competitive bid to find the best deal and most affordable prices available, FirstEnergy agreed to buy the power from FirstEnergy Solutions. Imagine if the owner of your company forced you and every employee to buy expensive health insurance from their cousin, even though you could easily get a better price if you shopped around.

If this sounds bad, it gets worse – this isn’t the first time FirstEnergy has tried this tactic. The utility did the same thing in 2013, and the PUCO slammed FirstEnergy for doing so. This is just a case of déjà vu all over again, and FirstEnergy should expect the same result. Read More »

Also posted in Clean Energy, Ohio| Comments are closed

How Energizing Renewables can Spur Carbon Pricing

Photoy Jürgen from Sandesneben, GermanyTo avoid the worst effects of climate change, we must do more to reduce our greenhouse gas emissions. Yet, we still do not have a price on carbon, one of the most prevalent greenhouse gases in the world and the biggest contributor to climate change. Despite knowing that a carbon price creates broad incentives to cut emissions, the current average price of carbon globally (which is below zero, once half a trillion dollars of fossil-fuel subsidies are factored in) is much too low relative to the hidden environmental, health, and societal costs of burning a ton of coal or a barrel of oil.

Policies that comprehensively reform the energy sector—a sector designed around fossil fuels—are necessary even as the price of renewable energy declines. The cost of solar photovoltaics, for example, has declined 80 percent since 2008. Prices will continue to fall, but not fast enough to make a dent in the climate problem.

Policymakers are more likely to price carbon appropriately if renewables are competitive with (or cheaper than) fossil fuels. But reducing the cost of renewable energy requires substantial investment, and thus a carbon price. The best hope of resolution is through controlled policy experiments designed to drive down the cost of renewable power sources even further and faster than in the past five years. Read More »

Also posted in Cap and Trade, Clean Energy, Climate, Energy Storage, General, Renewable Energy| Tagged , | Comments are closed

Finding a Balanced Solar Policy in Kansas

Black_&_White_Handshake_-_Still_from_the_film_Colour_Blind_(2009)How does a utility company structure charges for the electricity it sells? That depends on where you live, and across the country, utilities are filing for rate increases with state agencies and commissions. The utility’s charges may be some combination of a fixed monthly fee, a fee based on the volume of electricity used, and a fee connected to the customer’s peak energy use.

Westar Energy in Kansas is one example of a utility company filing for rate increases. The company recently asked the Kansas Corporation Commission for permission to increase the fixed monthly charge for residential customers. That’s not unusual in itself, but the amount of the fixed charge increase was shocking.

Westar also proposed a special rate structure squarely aimed at residential customers with solar panels, essentially penalizing them for using clean energy and discouraging more people from installing solar panels.

Environmental Defense Fund disagreed with Westar’s approach, and we filed expert testimony with Kansas regulators explaining why. Westar finally reached a settlement with the other stakeholders – and our recommendations were instrumental in eliminating the utility’s proposal to impose discriminatory rates on solar customers. Last week the Commission issued the order to approve the settlement. Read More »

Also posted in General, Smart Grid| Tagged , , , | Read 1 Response

Timing is Everything: How California is Getting Electricity Pricing Right and Bringing Clean Power to the People


Anybody managing a household budget knows it pays to plan ahead. With advanced thinking we can buy favorite items with coupons, when they’re on sale, in bulk, or at the cheapest store in the area. Similarly, we know that buying under duress, or in the touristy spot, will likely mean higher prices. Using the same smart shopper skills, new changes to the way utilities charge for electricity are going to give Californians another way to save money on energy bills.

In the current system, most California households’ electricity prices don’t change throughout the day. There is no option for lower prices when system demands are lower and electricity is cheap in wholesale markets. But that’s about to change, thanks to a recent 5-0 decision by the California Public Utilities Commission (CPUC).

Starting January 1, 2019, after a period of study, public outreach, and education, California’s large investor-owned utilities (Pacific Gas and Electric, San Diego Gas and Electric, Southern California Edison) will switch households to time-of-use (TOU) electricity pricing. Read More »

Also posted in California, Time of Use| Read 4 Responses
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