Net Metering Time Shift. In what appears to be a more substantial story, the SDG&E rate case is moving forward with an important data point that many in CA have been waiting for. The 11am-6pm on peak window will apparently shift to 4pm-9pm. That’s a duck curve phenomenon that will be taking out on distributed generation which doesn’t even get counted in the State’s RPS. I don’t know what the delta is between the 11am rate window and the 4pm rate window but I wonder if CPUC will give that delta to the utility scale projects? If I were to add storage to the large projects, will the PPAs be allowed to monetize that time shift in response to the new rate windows? I think not. On the other hand, the load shifting will be cheered by the storage companies because their value proposition is now quantifiable above and beyond the demand reduction.
The Berkshire Energy Headline. Tagging on to the next story, Berkshire made news with the increase in net income to the renewable energy unit. Interestingly, Berkshire owns PacifiCorp which owns Rocky Mountain Power, the same utility that was afraid of a few solar homes. After NV Energy’s stance on solar it seems that Berkshire may want their cake and eat it too just depending on which business unit is active in the State. I welcome Berkshire in utility scale but wish they and other IOUs would realize that solar homes mean more reliable grids for large solar and solar homes mean more homeowners that buy electric vehicles.
A Deal in Utah? A bit of a surprising turn in news regarding the Utah fight around net metering. I doubt the net metered solar market is large but solar is taking the fight anywhere that solar is under attack. This week there is a public hearing and solar was mobilizing, I received an email early yesterday. Part of the conversation with Rocky Mountain Power was apparently about reopening their ratecase to see if they were overcharging the consumers due to lower fuel costs. Executives would have quickly done the math to see what was larger, solar losses (which are probably nothing) or return of dollars for lower fuel costs.
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Sunny Side of Residential Storage. Residential storage has a certain allure to me. It merges marketing with the technical side of our industry, in many ways making tech companies turn into sales organizations. Unlike residential solar, the starting capex is already much less and dropping while one could make the case that the value is greater. Storage creates this comfort if built for backup and a certainty around knowing when it will be discharged. Sonnen is taking on the beast that is Tesla with Powerwall and others like LG Chem are certain to play as well. Keep your eyes on resi storage, this market could grow rather quickly in the near future.
Where Should Utilities Go? The General Manager of Wartsila is asking (rhetorically I presume) what is next for the American utility. Of course Wartsila has been a giant in generator and power plant construction but more importantly they recently bought Greensmith, the storage company. In many ways, IPPs are welcoming the IOUs to the party when it comes to the risk/reward that has and should be part of the energy system. In my opinion, IOUs with ratebase, should (and in some cases have) become transmission companies. Generators and retailers need to compete in the market to give customers the product and pricing they want. Owning all parts of the value stream fails to align the interests of the company and customer, never a good thing in a free market.
The Policy That Created The Nuclear Boondoggle. Ten years ago, I met a Florida State Senator that was on a mission to eliminate a policy appropriately named “Early Cost Recovery.” This policy allowed IOUs to charge ratepayers for costs associated with developing and building nuclear power plants before and during construction. Since utilities make a return on capital deployed, you could see how cost increases may actually work in their favor if regulators grant those increases along the way. What we have seen throughout Florida, Georgia and South Carolina is that the policy has resulted in a lack of risk and cost awareness. There are greater parts at play here but the consumer seems to be universally hurt by the policy. Senator Mike Fasano is now the tax collector in Pasco County but could be so much more.
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Have a great weekend. Make sure to start planning for SPI!
I Hardly Even Knew You. I doubt the paint is dry on the solar offices after the net metering legislation was passed. In ‘complying’ with the legislation, NV Energy is essentially trying to undo the intent of the language. Now the procedure sits in regulators’ hands instead of the politicians elected by the people.
Go West. Not that residential customers choose where to put solar since they tend to put it anywhere the sun shines but this Missouri utility is being proactive with this incentive.
Ten Years of Nostalgia. My university commencement speaker was Al Gore. After a quick store about stopping at Shoney’s, the Vice President and popular vote winner talked about climate change. It was important and it was coming. Fast forward over a decade and I have spent my career in solar and walked through flooded Miami streets last weekend. Don’t get me wrong, I believe in the business of solar to make money, but making money without creating a greater good seems pointless to me. Getting cities to be educated about becoming buyers is as important as anything we can do right now.
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Power To The Roofs. As I am writing this, Tesla is up about 7.4% after a quarter that Wall Street approved of. The solar anticipated roof tiles are in pilot mode and have been installed on Elon and Straubel’s house. Full line production will come out of Buffalo by the end of the year. I still believe that this is a premium product given the complete system requirements. I would expect Tesla to find another path to distribution as well. In order to drive scale, roofers will have to be an outside sales channel in my opinion, let’s see how Tesla handles that end.
Role Of The Utilities. Utilities play a large role in the solar market for a variety of reasons but most of all because they are the incumbent market participants. Having the monopoly gives utilities access to debt that are backed by having the ratebase and guaranteed returns. Other than being a bankable offtaker, the largest of the utility roles in this, utilities played a big part of owning assets in their deregulated business units. Long term cash flows, leveraged with cheap capital, make for great portfolios for utilities. At the end of the day that’s what utilities are, banks.
Perry May Move On. Now the General Kelly has left Homeland Security to be the White House Chief of Staff, there is an opening at DHS. Rick Perry is rumored to be in the running for that job, maybe because his State had a border or he has no nuclear energy knowledge. Would create another opportunity for DOE to be shaped by a new Secretary.
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