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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.

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!

 

 

What Is Blockchain? Is it the Future of Energy?

What is blockchain, and why is it important for the energy sector?

If you know anything about blockchain, you are probably wondering how it is related in any way, shape, or form to energy. Indeed, the concept of blockchain was originally confined to the cybercurrency known as Bitcoin, where the technology chronologically records and links transactions made across the network, securing the Bitcoin environment.

Now, however, the blockchain concept is being applied to situations beyond Bitcoin, and especially in the energy sector. Inquiring energy experts asked if this same technology used to track the flow of cybercurrency could be used for energy transactions. And, as it turns out, it might be able to. Thanks, energy experts!

With blockchain, an energy consumer would be able to securely sell any unused energy to a willing buyer, such as a neighbor. Blockchain would track the flow of electrons on a distributed grid, much like that of currency in a cyberenvironment. At its core, blockchain would be able to create a secure, instantaneous, and independent system for energy transactions.

For all its positives, there are some obstacles that blockchain must overcome before it can meet the high expectations of energy experts, especially on the technical side. For instance, blockchain does not currently provide the sufficient bandwidth and throughput needed to make global energy transactions a reality. But don’t despair! Many are working to create blockchain a usable, everyday part of life. This map shows the areas where blockchain research has made headway:

What would a blockchain future look like?

If blockchain technology gets past the current technological barriers, it would significantly alter the energy sector. For one, it would eliminate the need for an electricity retailer, as transactions would happen directly between an energy producer and an energy consumer. This means that a household would be able to buy the energy it needs from a preferred sustainable energy producer. Furthermore, any unused energy by a household could be sold or gifted to a neighbor. The blockchain future is a bright one, and we look forward to it!

the duck curve of renewable energy

The Duck Curve: What is it and what does it mean?

So let’s talk about the duck curve and what it means in the world of renewable energy. But what is the “duck curve?” Does it involve our adorable little animal friends who quack the day away? Well, kinda, but not really.

Put simply, the duck curve is the graphic representation of higher levels of wind and solar on the grid during the day resulting in a high peak load in mid to late evening. The difference in the Duck Curve and a regular load chart is that the duck curve shows two high points of demand and one very low point of demand, with the ramp up in between being extremely sharp. It looks like a duck! Since renewable energy has become more common over the years, the duck curve is appearing more often and is getting worse.

Let’s look at an example of what the duck curve looks like:

 

The duck curve, explained.

As you can see, this chart shows the electric load of the California Independent System Operator (ISO), just think the California grid, on an average spring day. The lines show the net load—the demand for electricity minus the supply of renewable energy—with each line representing a different year, from 2012 to 2020. The chart also shows that energy demand reaches its peak in the morning (between 6 A.M. and 9 A.M.) and afternoon times (between 6 P.M. and 9 P.M). This demand shows that people need more energy as they get prepared for work or school in the morning and when they come home from work or school in the afternoon.

Let’s look at lines 2012 and 2017, for example. Comparatively, the 2012 line is much more smoother than the 2017 line. This is because the feed of a renewable power supply has not yet been introduced. By slowly integrating solar energy, the demand for electricity from the electrical grid becomes smaller and smaller. However, the renewable energy source is not enough to meet the demand in its entirety, especially in those peaks hours that I referenced earlier. So the electric grid is left to pick up the slack, which can sometimes be problematic.

Why is a duck causing problems?

As you can see by the chart, solar energy works best during the bright hours of the day, which makes energy demand lower greatly. We’ll call this the duck’s belly: the lowest point of demand. The demand begins to rise rapidly as the sun sets and people get home at 6 P.M. There’s no sun to power all of the appliances getting turned on by people returning home from work or school, and the grid is left to answer to that high demand. Therefore, the demand rises very rapidly (the duck’s neck) to a peak in the afternoon hours (the duck’s head).

For many decades, energy demand followed a fairly predictable pattern, with very little change in levels of demand. This allowed electrical workers to become experts with sustaining a stable output of energy. Well the duck curve kinda throws a wrench in that. In order to meet the baseline requirement, or “baseload”, utilities run BIG power plants that run on either nuclear or coal, which run around the clock. The problem with coal and nuclear power plants is that they’re expensive to completely startup and shutdown, and are more effective in ramping up or down. Then there’s the “peak load,” which is satisfied by peaker plants that usually run on natural gas, and more frequently renewables.

In order to maintain top efficiency, regulators will often turn peaker power plants off and ramp down the baseline plants during times of very low demand, such as hours of the “duck’s belly.” However, the sudden and rapid increase in demand means that regulators have to quickly turn back on these power plants, which is not only expensive, but could lead to more pollution and high maintenance costs.

Another problem with the duck curve lies in the belly of the duck. In some places, demand becomes so low that grid operators are forced to turn off the peaker power plants and ramp down the baseline power plants. Then, just a few hours later, they all have to get ramped up again with little to no warning, which can cause problems for grid stability.

So problems with the duck curve lie in those sudden and steep changes in demand. Grid operators and regulators struggle to maintain stability and efficiency by turning power plants on and off, causing instability in the power supply, large expense to taxpayers, and pollution to the environment.

So what can we do about the Duck Curve?

One probable solution for the duck curve can be found in a method called interconnection. This strategy involves connecting multiple energy grids together to make a large energy grid. In theory, this would broaden and disperse the load and availability of solar and wind across a larger area, which in turn would flatten the duck curve.

This strategy could provide a long term solution to the problem. However, although the technology already exists, the politics of a large, interconnected grid is unlikely due to “not in my backyard” concerns and securing the rights of way.

The second method of smoothing out the duck curve is committing to the storage of energy generated by solar and wind, instead of immediately sending that energy directly to the grid. The energy can then be “dispatched” when it’s needed, and would almost definitely flatten the curve. This method could prove very expensive to execute in near term however battery storage continues to fall in price and more utilities are actively seeking it as a viable solution.