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The Iniquity Of Utilities Asking People To Pay For Their Power

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The Guardian gives us one of those lovely, deliberate, misrepresentations of an economic situation. The way this story is written the evil capitalists are determined to stop good hones folks from saving the planet by generating green electricity. What is actually happening is that someone, somewhere, has to pay for the grid.

Solar pushback: how US power firms try to make people pay for going green
In states like Kansas, energy companies want to impose charges on people who produce their own power with rooftop arrays

No, that’s just not right. No one is trying to charge people for going solar. What they are trying to do is charge people for being connected to the grid:

Evergy’s senior vice-president, Chuck Caisley, said environmental advocates are unfairly painting the company as anti-renewables and that he just wants rooftop solar generators to help pay for the grid they use. Utility companies argue that when customers opt out, they will be forced to charge the remaining pool of users more.

“From an issue of fundamental fairness, we just don’t believe that because you put a solar array on your house, [your neighbor should] have to pay more,” he said. “It was never our intention to try and hurt the solar industry.”

But utilities remain monopolies, meaning their customers typically don’t have other options. They are typically regulated by elected or appointed state officials, who determine how big of a profit they can make from running plants and power lines.

You can be self-sufficient in your power generation and never pay the utility a penny. But you’d better actually be self-sufficient.

Ah, OK, so you want to have solar and use your own electricity. And when you generate more than you’re using you want to use the grid to shuffle it off elsewhere? And, then, when you’re not generating but want to use you want to be able to draw on the grid?

OK, fine, that’s really entirely fine. It’s just that you’ve now got to make a useful economic contribution to the costs of that grid that you desire connection to.

The way this is normally done is that some fraction of what you pay for each unit of electricity pays for the electricity. Some other fraction pays for the grid. But when your electricity consumption from the grid declines there’s a problem. Your former 100 units x price of electricity x %ge for the grid paid for the grid. Now you’re generating electricity and feeding it to the grid. Plus drawing from the grid. Your net payment for the grid might be 0 units of electricity x price of electricity x %ge for the grid.

Which is a problem because the grid still has to be paid for. And yes, you my little chickadee, howsoever green you are, are one of those people using the grid and who therefore have to pay for it.

The other way to put this is that the price of electricity used to subsidise the grid. Now you’re using the grid but less – on nett – electricity that cost hasn’t changed. So, you’ve got to pay more in some other manner.

This is a common point in the US where the grid operator often is the owner of power plants. The Greens insist that charging people for the grid connection is subsidising the power stations. You know, The Man, and ‘e is Baaad. When actually the problem is still there. The grid has to be paid for and if you’re connected to the grid you’ve got to be one of the people paying for it.

The actual answer is simple enough. Do what we English did. Separate the grid from the power stations. The people who transport the power to you never are the people who generate it. At which point it is possible – without argument – to separate out the costs of the grid and the generation.

Of course, the Greens will still complain but who cares about them?

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2 COMMENTS

  1. My neighbour has complained that they’re now going to charge him for the electricity his solar panels feed to the grid. Whereas previously he never paid anything, and some money was left over to pay his ex-wife’s bill as well.

    Since I was too terrified about what might happen to my 65 odd years old fibro-asbestos cement roof if I had panel installers tramping around on it putting in the panels, I’m afraid my sympathy was rather limited. And of course I’d also argue that someone has to pay for the staff and fuel of the generators on standby for when the wind doesn’t blow and the sun doesn’t shine.

  2. If you believe that anything generated by a crap chinese solar panel on your roof (or a toy windmill) can actually go onto the grid and can power anything the other side of of your meter, I’ve got a bridge to sell you.

    This bridge by the way, is made of unobtanium and crosses multiple dimensions. Not sure if it can span the gap between “green” and reality though.

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