Where the Sun Don't Shine part 1 Illinois Solar

This past week I attended the Solar Power /PV Conference in Chicago. Anything but boring and for multiple reasons.

Let’s start with the fact that the show started on November 9th. Anyone remember what happened on November 8th? Every panel was prepared to put solar in the ring with Trump. Oddly solar stood up pretty well.

Dismissing all discussion of global warming or climate catastrophe is pretty easy when you bring out the green dollars in the minds of capitalist of all persuasions. Solar gives a better return on investment than coal. Skip the tree hugging and head straight for the money.  That was a resounding theme.  Score one for sun shinning at the conference for solar proponents.

The sun was not shining too brightly for the representatives at the conference from Com Ed. It’s not that the big utility is against solar. They DO have to find a way to work with it and that’s inevitable. The problem for Com Ed, as expressed repeatedly at the conference and elsewhere, is the pending legislation that has been hanging like a miasma over the state of Illinois. Com Ed wants a very unpopular method of assessing our electric bills called demand charges. In a nut shell you get billed based on your highest usage in a given period.

Here’s an example curtesy of Energy SMART (http://www.energysmart.enernoc.com/understanding-peak-demand-charges/

Let’s assume these rates apply to both companies:

Electricity charge = $.0437 per kWh

Demand charge = $2.79 per kWh

Example 1: Company A runs a 50 megawatt (MW) load continuously for 100 hours.

50 MW x 100 hours = 5,000 megawatt hours (MWh)

5,000 MWh = 5,000,000 kWh

Consumption: 5,000,000kWh x .0437 = $218,500

Demand: 50,000 kW x $2.79 = $139,500

Total = $358,000

Example 2: Company B runs a 5MW load for 1000 hours

5MW x 1,000 hours = 5,000 MWh

5,000 MWh = 5,000,000 kWh

Demand = 5MW = 5,000 kW

Consumption: 5,000 kWh x .0437 = $218,500

Demand: 5,000 kW x $2.79 = $13,950

Total: $232,450

Depending on on your rate structure, peak demand charges can represent up to 30% of your utility bill.

There’s no mystery as to why informed customers are eyeing this with skepticism. “What you talkin’ about Willis?” The demand charge would change how a customer’s bill is calculated so that it is based largely on the highest spikes in demand, not overall electricity usage. So that is a big hill for the utilities to climb. This entire ComEd/Exelon situation needs careful vetting. Floridians just put the kibosh on a similar solar legislation to utilize demand rate pricing even though it was hidden in a bill that “looked” positive for solar. And that’s not all.

Just today ComEd/Exelon went to the trough in Springfield. DRAMA. ComEd added coal to the “new legislation”. COAL? WTF. Here we are , trying to dig our way out of global warming with a product solar, that is more affordable and provides a better ROI 

ComEd/Exelon comes in with a bet on the table of coal? Well, it’s not as stupid as it seems. Down state is the target. The problem is that the coal plants down state don’t use coal from Illinois. It’s from out west. So who is going to profit from adding more coal to the portfolio? Answer, not Illinois miners. (https://t.co/6wskuKFkLB)

You couldn’t script this better, if you tried. The utility companies are gasping for air. Like a young man said in a meeting I attended a couple of weeks ago. “We really don’t need the utility companies.” Frankly, I hope we find a better way to work together that benefits us, the people, the community, and we don’t mind if investors make a reasonable profit from our point of view, just not on our backs.

Comments

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  • Peak demand charges make perfect sense - especially since everyone tends to peak at the same time of the day. Peak demand is what drives a utility's capital investment, which is a huge portion of their cost structure. This rate structure will influence behavior and reduce the need for additional generation capacity.

  • In reply to Gary Lucido:

    Well Gary even our Republican governor disagrees with you, not to mention the many states that have denied other utilities from instituting the same rate for residential customers. Solar companies strongly opposed the proposal, and Governor Bruce Rauner’s office called the demand charges “insane.”

    So, the bill that passed did not approve the demand rate charges for residential customers. Thanks Governor Rauner and all the people from the solar industry that fought so hard to pass the bill that supports renewable energy in Illinois.

    Sorry Gary.

  • In reply to Danie:

    It's unpopular. That's why it was rejected. But that doesn't make it a bad idea. And frankly I've never cared who agrees with me or not. History is full of the masses unable to see the truth. All that matters is that it makes sense and encourages the right behavior.

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