Posted By pbrane on 03 Dec 2014 09:07 PM
For anyone interested in the subject, Wisconsin Public Radio is doing a show on Thursday. Listen live or via archives on their website wpr.org
01:00 PM - The Kathleen Dunn Show - Are Energy Companies Penalizing Solar Customers?:
Rooftop solar panel use is on the rise across the country, which has forced some energy companies to raise rates. Many renewable energy users are saying utility companies are waging "war" against them. Kathleen's guests will discuss these energy trends and try to forecast where the industry is going.
In many cases that is exactly true. Vertically integrated utilities with sunk costs in their own generating assets view solar (rightly) as competition.
Many states have "decoupled" generating services from the local utilities, where the utility compensation is not based on kwh sales, but on other factors. In some states (MA inlcuded) decoupling basically separated the power generation biz from the distribution grid operation biz, and the local utilities typically buy power from generating companies and passing that cost to their customers, but many smaller utilities still own & operate some of their generating assets, which still puts them at competitive odds with privately owned PV.
Wisconsin is a decoupled state, but not all of the utility operators (or even the state regulators) have fully adjusted to that reality.
The corporate mindset of utilities comes from a history of being a
regulated monopoly with guaranteed returns on their capital assets-
their decisions around building generation & distributions assets
are on 30-50 year basis, with some assumptions about demand growth etc.
But in the current US environment demand is NOT growing while
unanticipated competition from PV
is growing, which puts their existing
assets (and shareholders) at financial risk. It is not irrational for them to want to protect those assets from having to be written off, but they don't necessarily "deserve" profit guarantees on every asset purchase decision ever made.
It's up to their regulators to sort this out, but in many cases (as would seem to be the case in WI), the regulators may be a bit too clubby with the entities they are supposed to regulate. It's up to the voters (and press) in WI to fully sort THAT problem out.
On the subject of failing utilities succumbing to competitive threats from renewables,
Hawaiian Electric Industries just cut a deal to sell out to
NextEra Energy, an investor owned company vested in renewable energy, with backing from CitiGroup. This is particularly interesting because Oahu is one of the few places in the US that has already run into mid-day backfeeding & overvoltage conditions due to the sheer size of the privately owned PV hooked onto their grid. It's hard to think of a more appropriate buyer, since NextEra has a strong interest in developing the grid controls necessary for managing massive but intermittent renewable sources. HEI's grid area is the right sized test bed for getting those kinks worked out.