Comment by tathougies | Hacker News Reader

Comment by tathougies | Hacker News Reader

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> we have an overabundance of "green" energy here in California, yet energy prices are through the roof, we are looking at potential, rolling blackouts this summer, and we have to sell excess power to other states each month. why?

You're absolutely right.

Here in Marin county, you can opt in to using renewable energy, which my wife and I have. The public renewable utility rate is significantly cheaper than the standard PG&E rate. However, I am forced to pay more than the actual cost that the public renewable utility charges, because -- due to California state law -- my electric bill comes from PG&E, who -- despite not making the electricity -- has responsibility to charge the consumer. Of course, PG&E charges a 'convenience and distribution' fee that eradicates the difference in pricing between the renewable resource and their own electricity. Note that, if I opt in to using PG&E generated electricity, they kindly 'waive' the fee. Thus, despite the renewables being cheaper, I do not get the benefit as the consumer.

I have contacted my state senator and representative, and they sent me back a form e-mail about how they are 'standing' up to PG&E. Give me a break.... this is something that is easily legislated.

> PG&E, who -- despite not making the electricity -- has responsibility to charge the consumer. Of course, PG&E charges a 'convenience and distribution' fee

I understand your frustration that the amount of the fee cancels out the cheaper cost of renewables in your case, but providing local distribution has a cost (maintenance of poles, wires, etc) over and above the actual energy generation cost, so there will always be a fee for this, unless you figure out a way to get the renewables to your house without the local distributor (and assuming that you don't put solar/batteries on your house).

Also, there is a cost (for storage, load dispatching, frequency regulation, etc) to turning the variability of renewables into the steady stream of available power that consumers expect.

Again, it's possible even including the cost of all of these necessary services, the renewables should still be cheaper than the non-renewables, but it's never going to be zero.

This all makes sense, but why then is the "standard" (coal-fired?) electricity the same price as the "renewable" electricity? Why does the utility "waive" the distribution fee?

In fact, passing it on to the consumer as an option doesn't make any sense to me. The utility negotiates bulk price and averages it out for consumers. If anything the conversation with the utility should be entirely about matching behavior to supply and/or dynamic pricing, and not at all about renewable vs non-renewable voltage.

I think the post I answered was referring to PGE's Solar Choice program, which I agree is not a good deal for a consumer.

But it's marketed specifically as a program where you pay a premium to fund the greening of the grid [1][2]. It actually states that you will pay a premium for this plan.

1. https://www.pge.com/en_US/residential/solar-and-vehicles/opt...

2. https://www.sfgate.com/business/article/PG-E-s-eco-friendly-...

I am not referring to PGE's solar choice program. Marin county runs its own green energy, independent of PG&E. PG&E owns the wires. I get it costs money to run the wires. However, it is wrong to waive the fee for those using PG&E services. It's anti-competitive and bad for the state.

Mostly because of the historical way the business model worked - the portion of your bill that varies based on energy usage is all out of proportion to the portion of the cost to the energy company that comes from varies based on energy usage. Basically, the electric companies' business model is like the cell phone companies' - build infrastructure, charge by usage - which means that low-cost energy sources, especially out of PG&E's control, are disastrous for their business model. It's a serious problem I've heard a lot of talk about in renewable energy policy circles, and the generally accepted idea of a functional market structure in this new world is to have a grid company, which charges only that distribution fee, and a generation company, which charges you for the cost of generation.

But we're not there yet, so PG&E needs to find ways to not lose money on the grid hookup for customers who buy cheap forms of energy (or are, godforbid, energy-neutral with relation to the grid).

Grid companies are tricky because there’s no market there. It is almost the textbook definition of a natural monopoly.

You’re either hooked up or you’re not. Or you run multiple “grids” somehow which seems more economically wasteful and is legislatively tricky in terms of rights (to run lines, overhead or underfoot).

It seems like the cost of maintaining poles and transformers goes up a lot every year...

How to keep them honest?

It seems like you would have to regulate to the point of ($pure distribution company) being essentially a government enterprise in all but name.

Yes. I mean, for those reasons, PG&E is already a highly-regulated natural monopoly; they just happen to bundle in the more normal generation market with the naturally-monopolist grid market. (Which is part of what makes their lobbying work so problematic, since they're so regulated that they're almost a government branch themselves.)

Splitting the company into a 1) a government or quasi-government enterprise to handle the parts not suitable to the market, and 2) a much-less-regulated company handling the more market-amenable activities, could give the system as a whole a lot more of the efficiencies of a market system.

And if you don't do it right things can get all screwed up in a hurry. California tried to do this with some really bad rules (power companies must by power in an unregulated spot market but sell into a regulated market for some number of years) in 2000 and ended up with the bankruptcy of PG&E, rolling blackouts, $40 billion lost by the state of California due to manipulated inflated prices, and the only successful recall of a California Governor in history. [1] for the gory details.

[1] https://en.wikipedia.org/wiki/California_electricity_crisis

Yeah, designing a market is hard and needs professional economists involved, not just politicians riddled with conflicts of interest and taking all their information from lobbyists.

That's because solar usage has created a "duck curve" I would imagine it would be even more unfair to make normal energy users pay for that: https://youtu.be/YYLzss58CLs

There's really nothing special there. Grid operators balance generation and demand, and need to continually update their models. E.g., generate less during midday and more in the late afternoon. It's a hard job sure. That's why we hire experts to do it.

The problem is that utilities want it both ways. They want to charge you peak usage despite the fact that "peak" generation is actually becoming one of the cheapest times for power.

If they allowed free-market pricing in that power they could easily find a use for "curtailment" -- people would crank their ACs or charge their cars if the price kWh dropped below a certain point.

And the use of air conditioning is what causes the annual peak (which is what the transmission and distribution systems are built to serve). Is it unfair for people who don't have air conditioning (or live in more temperate areas) to pay a premium so that others can have air conditioning?

This is why California is moving to Time of Use rates (TOU) in late 2019/2020 (depending how they push off the date due to IT challenges).

Nope, you can smooth that out by moving power east to west. 1000 miles is ~two time zones and has minimal transmission costs. Get their solar in the morning and give them some solar in the evening and you can kill off one bump at each end. Continental US is 4 time zones wide so you only have a morning bump on the east coast and an evening bump on the west coast to deal with. Extra cheap wind capacity in the middle of the US can provide power for either bump.

It's really more about corruption than anything else. PG&E still charges vastly increased rates in California despite huge drops in wind and solar prices.

>Nope, you can smooth that out by moving power east to west. 1000 miles is ~two time zones and has minimal transmission costs.

That is probably a bit more complex and a bit harder than you are implying. Attempts to interconnect the main grids are large projects that take many years to do. The Tres Amigas SuperStation is an attempt to unite the Eastern Interconnection, Western Interconnection) and the Texas Interconnection). First announced in 2008. It will carry 5 GW of power which seems like a lot until you consider that the US uses about 4,000 terawatt hours per year,

https://en.wikipedia.org/wiki/Tres_Amigas_SuperStation

>...It's really more about corruption than anything else. PG&E still charges vastly increased rates in California despite huge drops in wind and solar prices.

PG&E gets maybe 10% of their power from solar, Much of that power they have to pay the RETAIL rate for since rooftop solar is heavily subsidized - of course it is going to have to increase what it charges other people.

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