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Austin Energy Rate Increase re:Solar
posted by Jeffrey Dwyer on September 16th, 2013 7:19 PM
Hello All,This is my reply to a post in a similar thread:Hi Hellojustice,I have surpluses nearly every month of the year except December and January. That is because I have electric heat, which uses a fair amount of energy at a time of year when the solar production is lowest. My home is truly zero energy in that I produce more electricity than I consume and use only $5 worth of natural gas annually to run my cooktop and burn no wood for heating. So, there are pros and cons for a reset date for different solar customers. A reset date of March 1 would benefit me the most. I could generate surplus from March through October, turn off my inverters and rest my system from November through February, restart my system in March and thereby preserve my investment in my inverters while still achieving net zero dollars on my electric bill and leaving no surplus.BUT THERE SHOULD BE NO RESET DATE!!!Austin Energy electric customers contribute to the rebate programs as part of the Community Benefit Charges which include the Energy Efficiency Services fee of .289¢/kWh which "recovers the cost of energy efficiency rebates and related costs, solar rebates, and the Green Building program offered by Austin Energy throughout its service area." This quote is from the City of Austin Electric Rate Schedules. This fee is charged to all AE electric customers.Rebates are to encourage and reward responsible behavior and consumption of resources. Rebates are not loans and should not have to be reimbursed by the recipients in addition to the EES fees described above.Here are the facts:1) Austin Energy is paying 16.5¢/kWh to the Webberville Solar Farm.2) Austin Energy is paying solar customers who use much more power than they generate 12.8¢/kWh.3) Austin Energy is paying those who generate nearly as much as they consume to slightly more than they consume less than 12.8¢/kWh.4) Austin Energy is incurring additional expense in printing, postage and payment processing by billing solar customers through two totally separate bills for electric and other services. The cost of this program may even exceed the revenue the utility would realize by confiscating solar surpluses! And the only apparent reason for the two bill system is to prevent the return of the surplus to those most responsible consumers who generate it.5) The most responsible residential consumers of electrical resources in our community are being treated worse than those who consume much more power than they produce.I think the solar surplus should be handled exactly as it was before the rate change. Any surplus at that time was simply credited to the Water/Wastewater/Garbage Collection/Street Cleaning portion of the bill. This was much fairer, continued to incentivize building the most efficient building envelope, continued to incentivize conservation, eliminated the need to generate two sets of bills for solar customers, and exercised the most common sense.
ATTENTION: SOLAR OWNERS!
posted by Jeffrey Dwyer on September 16th, 2013 11:34 AM
Hi Hellojustice,I have surpluses nearly every month of the year except December and January. That is because I have electric heat, which uses a fair amount of energy at a time of year when the solar production is lowest. My home is truly zero energy in that I produce more electricity than I consume and use only $5 worth of natural gas annually to run my cooktop and burn no wood for heating. So, there are pros and cons for a reset date for different solar customers. A reset date of March 1 would benefit me the most. I could generate surplus from March through October, turn off my inverters and rest my system from November through February, restart my system in March and thereby preserve my investment in my inverters while still achieving net zero dollars on my electric bill.BUT THERE SHOULD BE NO RESET DATE!!!Austin Energy electric customers contribute to the rebate programs as part of the Community Benefit Charges which include the Energy Efficiency Services fee of .289¢/kWh which "recovers the cost of energy efficiency rebates and related costs, solar rebates, and the Green Building program offered by Austin Energy throughout its service area." This quote is from the City of Austin Electric Rate Schedules. This fee is charged to all AE electric customers.Rebates are to encourage and reward responsible behavior and consumption of resources. Rebates are not loans and should not have to be reimbursed by the recipients in addition to the EES fees described above.Here are the facts:1) Austin Energy is paying 16.5¢/kWh to the Webberville Solar Farm.2) Austin Energy is paying solar customers who use much more power than they generate 12.8¢/kWh.3) Austin Energy is paying those who generate nearly as much as they consume to slightly more than they consume less than 12.8¢/kWh.4) Austin Energy is incurring additional expense in printing, postage and payment processing by billing solar customers through two totally separate bills for electric and other services. The cost of this program may even exceed the revenue the utility would realize by confiscating solar surpluses.5) The most responsible residential consumers of electrical resources in our community are being treated worse than those who consume much more power than they produce.I think the solar surplus should be handled exactly as it was before the rate change. Any surplus at that time was simply credited to the Water/Wastewater/Garbage Collection/Street Cleaning portion of the bill. This was much fairer, continued to incentivize building the most efficient building envelope, continued to incentivize conservation, eliminated the need to generate two sets of bills for solar customers, and exercised the most common sense.
Austin Energy Rate Increase re:Solar
posted by ineoeni on October 10th, 2012 12:14 AM
Hellojustice, I totally missed the Winter tab (obviously), in my late night stupor. An alternative way of managing the credit has been on a rolling 12 month period. To the extent you generate a credit in a given month, it expires a year later, regardless of what month it was generated. If it's easily administrated, maybe that'd be a simple solution. This solution doesn't help people like Dusty, however. That being said, Dusty's point was, while he's "losing" $300 annually, he's still better off than he was under the old plan in it's entirety (net metering on lower rates).THAT BEING SAID, my guess is that when Dusty (and I know, me) underwrote our investment in solar, we assumed there would be some amount of energy inflation, so this rate increase would be in line with that expectation. The difference is the change from net to gross metering - if he had known we would be moving to this system, he probably would have opted for a smaller system - although, he might have wanted to go ahead and max out the system size given special incentives and unknown future energy consumption (what if his daughter picks up pottery and buys a kiln?!).My point is, we could cut this 100 different ways, but in the end, I personally believe that the move to gross metering is a positive for the AE rebate program. Even though it does improve the "payback" or "ROI" for most Muellerites, it certainly would have been nice to have known at the time of purchase.I'm going to run some more numbers on the "solar credit". To the extent we think a certain type of customer X consumption & X production is getting the shaft, it might be worth lobbying AE through Solar Austin or even as a neighborhood. They are trying to figure this out just like we are, so I'm sure they'll be receptive to feedback.
Austin Energy Rate Increase re:Solar
posted by ineoeni on October 9th, 2012 1:20 AM
Hi everyone, I'm sorry it's taken a while to get this out to everyone, but I hope the analysis below helps.First, let me address some of the concerns brought up in earlier comments.1) Resetting "solar balances annually is pretty common and makes sense for the utility because they don't want to incentivize people to build larger than necessary systems. Smittyhoo - Changing the reset date really doesn't change anything - for one, the vast majority of the neighborhood (90% or so) doesn't produce more electricity in the winter than they consume). It's probably worth looking at some more data, but I'm 95% sure that with the increased fixed charge and rates, it's highly unlikely that a lot of people are offsetting in winter months when you take into account the fixed charge.2) When we get rebates from Austin Energy - we agreed to play by their rules. AE isn't charging you for electricity you produced - they are charging you for electricity you use from the "system" and paying you for sending electricity into the "system". It's obviously semantics, but this is the way they look at it.Alright, it's late, so I'm not going to say this elegantly. It is important to note that there are TWO changes that occurring at the same time, making it harder to evaluate the change. (1) Rates are going up across the board and (2) AE is changing how they compensate solar owners. As far as (1) goes, rates are going up - that sucks, but they are going up for everyone, so regardless of whether you have solar or not, the rate increase will cause our bills to go up.So, in order to get a handle on whether the change to gross metering is helping us, OR if we'd rather have net metering on the new rate structure, I've done two analyses (attached). The first is a modified version of HelloJustice's spreadsheet. I took the liberty to add another scenario (old rates w/ gross metering) and also added some scenario analysis which will show you the "benefit of solar in dollars" in each difference scenario. Only change the cells at the top highlighted yellow.This analysis makes it apparent that your preference for gross vs. net metering has a great deal to do with whether you consume a lot, or a little electricity. Based on the average system size in Mueller, and about an average of 1,000 of excess consumption, you essentially don't care (it's the breakeven). Said another way, the spreadsheet shows that the AE changes make ALL OF OUR investments in solar better (increases ROI & Payback), but depending on how much electricity we use above our solar, we may or may not have benefitted MORE with net metering.Conclusion, having gone solar was the right financial decision and got even better due the changes. The second sheet is an update to my original analysis from 2011.This should make it pretty clear that the recent rate changes make solar more attractive. We can argue about whether or not AE should have kept net metering, but the reasoning (as I understand it) is sound. For solar to be sustainably structured, the fixed costs in the system need to be paid for by everyone - this change makes AE better incentivized solar projects because they'll always be compensated for the infrastructure they provide. Changes like these make it easier for AE to increase the solar budget without concern about the stability of the entire system (they just increased the total budget to $7.5mm from about $4mm, so maybe these types of changes matter).Anyway, it's late, so I apologize for the verbosity.Please let me know if this is helpful or if you have additional questions.Aman amankj ...at...gmail.com
Austin Energy Rate Increase re:Solar
posted by GP on October 6th, 2012 7:46 PM
Hellojustice,You are correct that AE is now going to a whole-consumption model. When I ran my home for the past year, there were some months where I paid less, and some where I paid more.The new Solar rate structure is detailed here: http://www.austinenergy.com/about us/rates/pdfs/Residential/Residential.pdf, on page 4.There is an important additional consideration as well. The last paragraph of the PDF I mentioned above talks about the Solar credit carry over: "Any amount of solar credit in excess of the customer's total charges for electric service under the residential rate schedule shall be carried forward and applied to the customer's next electric bill. The customer's carry-over credit, if any, shall be reset to zero in the first billing month of each calendar year."
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