Daniel Tait

Are Fixed Utility Charges Bad for Customers?

As solar energy and energy efficiency becomes more common, many electric companies have responded by dramatically increasing, or attempting to increase, monthly fixed utility charges.

What are fixed charges?

Fixed charges are static charges that occur on a regular basis. Most utilities have fixed charges, sometimes called an availability charge, on your monthly bill. Typically, this charge is small (less than $15-$20/month) and is normally in place to cover fixed costs a utility must provide in order for you to receive their service. An example of a fixed cost is the meter on your house and/or the expense to read it each month.

Throughout the United States, utility companies and, to a lesser degree, electric co-ops are charging solar users a fixed cost to re-coop the perceived loss of revenue from the users going off the grid, reducing their demand from the utility, or even just to discourage the use of new technologies.

The idea of large fixed cost increases originates from a suggestion in the “Disruptive Challenges” report released by Edison Electric Institute in January of 2013. Since the report was released, many solar users have seen fixed charges affect their monthly meter bill; sometimes costing as much as 50 dollars extra each month.

Fixed charges not only affect existing solar users, they have the potential to deter future users as well. Solar paying for itself is one benefit that is slowly being taken away; with one user saying, “I think the fixed fee for solar is excessive. When I do the cash flow that amount takes 25 percent of my monthly profit. It would take an extra three to four years to get the project paid off.” Most fixed charges push the payback on installations from a 10-year plan closer to a 13- or 15-year plan before the consumer begins to see that benefit.

David Shaffer, an attorney and development director of Minnesota Solar Energy Industries Association, said a high fixed charge, “decreases the cost-effectiveness of solar arrays and elongates the payback period,” he said. “Selling solar is based on the payback. If you get payback in under 10 years it’s a great deal, but if it’s beyond 10 years it gets more difficult.

Fixed charges cut into the viability of selling solar in those (rural) areas because financially it doesn’t make sense.” Another issue with fixed rate charges is their inconsistency. During 2014, as many as 23 fixed charges proposals were being considered by state regulators across the country and that trend continued through 2015.

In Minnesota alone there are different fixed charges depending in the company. Meeker Cooperative has a $55 net metering charge on an almost 40 kilowatt system, Xcel Energy has a flat fee for $10 a month for all customers but nothing specific for solar users, Minnesota Power has a monthly fee of $2.55 a month for a 20 kilowatt system, and the list goes on.

The increase in fixed charges hits close to home in the Southeast too. In the Southeast, electricity markets are primarily served by large integrated utilities. The Southeast also lacks a single regional transmission organization or independent system operator that establishes the economics of real-time transmission costs and contracts for ancillary services, or anything that supports the transmission of electricity from its generation site to the customer. Therefore, the responsibility falls to the co-ops, municipal utilities, and regulators to create smarter rate design and make economic decisions on the cost of service and constituent feedback. This often means individual states or regions are at the mercy of one company or local regulators who may not be as well versed in the intricacies of the electric market.

In a report conducted by the Kansas Corporation Commission, they concluded that increased fixed charges in Kansas would increase electricity use by 1.1 to 6.8%, varying by utility and season. This means the projected increase would be greater than all the energy savings from all the energy efficiency programs in the state. The same report found that such a change in rate structure and consumption would offset the financial benefits of decades of energy efficiency efforts and penalize customers who have already invested in or installed energy efficiency measures under the previous rate structure. The increase in fixed charges would weaken the incentive for future investors in energy efficiency, which could have negative impacts on the local economy and environment.

There is hope the trend may stop sooner than later. Regulators and stakeholders of utilities have begun seeking a new approach to fixed costs, with one idea being a demand charge that reflects the amount based on customer usage. One reason for this is the benefit energy efficiency will provide to the utility companies and customers alike. Contrary to some utility claims, solar is projected to decrease system costs for utilities. A new study by Rocky Mountain Institute shows that distributed energy resource (DER) customers with solar and battery storage provide value to the grid by reducing peak demand, deferring or avoiding system upgrades, relieving congestion, and providing ancillary services. In addition, other studies by utility regulators have found the value of distributed solar to exceed retail rates. For example, Nevada regulators found that the value rooftop solar adds to the grid is 18.5 cents/kWh, Mississippi 17 cents/kWh, Maine 33.7 cents/kWh, Minnesota 14.5 cents/kWh, and Vermont 25.7 cents/kWh.

Implementing fixed charges as blunt instruments will only result in a missed opportunity for utilities to align the interests of customers using DERs with those of the grid as a whole. Although still a work in progress, one thing is for certain. Massive hikes in fixed charges are bad for consumers, utility companies, and solar users everywhere.

Join Energy Alabama: Be a Friend of Sustainability

You love sustainable energy. We love sustainable energy. Hey, don’t you think it’s about time we teamed up?

 

If you’ve been on the Energy Alabama website lately, you’ve probably noticed that we’ve started a membership program. So what’s the deal? Well, basically we’re looking to team up with a whole bunch of sustainable energy superstars from all across Alabama. We’re hoping that includes you.

 

Here’s the idea. You sign up for a membership and contribute a small amount of money every month. In return, we give you a bunch of cool perks. Ta-da, everybody wins.

 

Join Energy Alabama, Skip the Gas

So, you might be wondering: How small is that “small contribution?” Well, memberships begin at just $2 a month. Over a full year, that adds up to $24, or less than the cost of a single tank of gas. Of course, with this transaction, you’re not even putting out any emissions. (Except for all those good vibes you’ll feel once you sign up.)

 

In return for that $2 monthly contribution, you’ll get all of this:

 

  • Recognition as a Friend of Sustainable Energy
  • Zero emissions (except for all the good vibes)
  • 100% guarantee that all contributions go to sustainable energy
  • Opportunity to decide how to use your contribution
  • Energy Alabama sticker and magnet
  • Potential to influence energy legislation and policy
  • Ability to make a difference in your community!

 

Not bad, huh? And the more you contribute, the better the perks. So for, say, $10 a month, you’ll get all of the above, plus an Energy Alabama t-shirt AND free entry into the first annual BrewNewable Fest.

 

Yeah, we know. Score.

 

Keeping Energy Alabama Strong

 

Most importantly, your contribution will also help keep Energy Alabama strong. Here at Energy Alabama, we know that changing the world won’t be easy — or cheap. But we also know this: When we all work together, we’re all stronger, and better.

 

That’s why we’re happy to offer memberships at all financial levels. Whether it’s with $2 a month or $200, you really can make a difference for our movement. Give what you can, and we promise we’ll use 100% of your contribution for the mission of accelerating Alabama’s transition to sustainable energy.

 

For more information, be sure to visit our membership page, or email CEO Daniel Tait.

Alabama Power’s Higher Fixed Charge Rate Options Deserve Careful Scrutiny

A few “lucky” Alabama Power customers will soon receive invitations to switch to one of two new rate pilot programs, called “Residential My Choice” or “Residential My Choice Plus.” Both raise the fixed monthly charge – by 260 percent and 400 percent, respectively – and lower the charge that’s based on how much power a household consumes.

It’s a worrisome move that could have implications far beyond the bills of a few customers.

The Alabama Public Service Commission (PSC) approved the new rate programs very quickly, just two weeks after they were requested on May 25. They’re voluntary and experimental… for now.

To continue reading our joint editorial in AL.com, please visit: http://www.al.com/opinion/index.ssf/2017/06/alabama_powers_fixed_charge_in.html

Energy Efficient Gadgets: Recommendations from Energy Alabama

Here at Energy Alabama, we’re always on the lookout for new and innovative, energy-efficient gadgets that further progress us towards a future of 100% sustainable energy. But we also love the idea of offering ideas to help you better manage the energy and resources you have now, because, you know, we’re just cool like that. So we’ve put together a list of gadgets that we believe will be of great benefit to you.

4 New Energy Efficient Gadgets For Your Home

#1: Sense Home Energy Monitor

 

The first gadget on our list is a cool little device called the Sense Home Energy Monitor. This device is great because it monitors any and every electrical appliance in your home. Every light, every T.V., and even the hair dryer in the bathroom is able to be read by Sense.

Every appliance has its own electrical signature, kind of like its own voice. Sense is able to pick up on all of those signatures and provide specific feedback about each appliance directly to your smartphone. It can tell you how long a T.V. has been on, how much power the refrigerator is consuming. It can even tell if an appliance is running on an unusual amount of energy, which could mean that that device may be faulty.

It works by using complex algorithms to recognize the different signature of every electrical appliance, such as a toaster or a washing machine. And not only that, but it monitors how much energy each device uses and provides helpful hints on how to save on energy. And who doesn’t like saving some extra money?

So, how do you install the Sense? Well, its simpler than you might think. Simply connect the device directly to the electric panel of your house, download the sense app to any smartphone, and connect the monitor to your home Wi-Fi to start “listening” to what your house has to say!

One of the drawbacks of the Sense is that it’s really best suited for buildings with only one electrical panel. Another gadget that is much like the sense, but is better fitted for more than one electrical panel, is known as Neurio. However, the interface and installation are a bit more complicated than that of the Sense, and could be a bit confusing.

Click here to learn more about Sense!

 

 
#2: Evolve Roadrunner 2 Water-Saving Shower-Head

 

The next item on our list is called the Roadrunner II Water-Saving Shower-Head. This shower-head is great for people who want to save money and water without sacrificing water pressure and temperature. The Roadrunner II comes with ShowerStart technology that allows cold water to run freely, while it restricts the flow to a slight trickle when hot water starts running through it. Simply pull on the cord when you want to resume the full flow and begin showering.

The Roadrunner II also fits the industry standard 1/2-inch fittings and offers a sleek chrome polish. Pressure compensating technology promises high pressure and coverage even in low pressure homes.

The Roadrunner II claims that it can save the average household approximately $246 in utility bills and around 8212 gallons of water annually. That’s a lot of money and water!

Click here to learn more about the Evolve Roadrunner II shower-head!

#3: Solar Powered Christmas Lights

 

Next on our list are solar-powered Christmas lights. That’s right! Gone are the days of running overbearing extension cords to Christmas lights, all while trying to find an outside outlet to run them to. These solar-powered lights provide a simple solution to the struggle of powering those beautiful lights. Simply hang up the lights like you would any other, then plant the included solar panel into the ground where lots of sunlight will hit it, and that’s it!

Since they run off of their own renewable energy source, you don’t have to worry about your bill going up around the holiday season.

Check them out by clicking here!

 

#4: The Kill-A-Watt Monitor

 

The last gadget on our list is the P3 P4400 Kill A Watt Electricity Usage Monitor. This device is pretty straightforward and simple with its execution and user experience. The Kill A Watt monitor can tell you the power consumption of any appliance in your home by the kilowatt-hour, the same as the electrical company. It can also give electrical expenses by the day, week, or even year. It also tests for power quality by measuring different factors such as voltage, line frequency, and the power factor. A large LCD screen shows all of the feedback in a clear and simple fashion. Simply plug the monitor into any outlet, then plug any electrical appliance into the outlet build into the monitor, and you’ll be able to choose what you want to know about the appliance. 

The U.S Department of Energy states that 20% of our electrical bills come from appliances that are left plugged in, even if those appliances are turned off. The Kill A Watt monitor can tell you which appliances in your house are steadily consuming power, which gives you the ability to save more money and power.

If you wish to learn more about the Kill A Watt monitor, click here!

 

 

Energy Alabama Signs On to Comments for Department of Energy’s Grid Reliability Study

Energy Alabama, along with many southeastern groups supportive of sustainable energy, signed on to comments prepared by The Southern Environmental Law Center in regards to the Department of Energy’s Grid Reliability Study. A 60-day inquiry is currently being undertaken by the Department of Energy concerning the reliability of our nation’s electricity grid.

We decided to sign on to these comments because Alabamians are starting to reap the benefits of affordable, reliable renewable energy resources that are diversifying our grid and producing clean, sustainable power. This study has the opportunity to significantly strengthen or weaken sustainable energy in South. We wanted to take any opportunity we could to give our voice in support of sustainable energy.

The full comments are shared below.

Download the PDF file .