Published on March 30th, 2014 | by Roy L Hales21
Solar Storage Scandal In California (In Depth)
March 30th, 2014 by Roy L Hales
SolarCity spokesperson Will Craven said that about 500 of their California customers have agreed to install batteries for power storage, but the state’s three biggest utilities have only connected 12 since 2011. He decided to go to the press after Southern California Edison (SCE) said they were going to charge $2,900 to install a meter, whereas SolarCity has found that an adequate meter can be purchased for between $75-150. The situation has greatly improved since Craven was interviewed by Bloomberg and PV Tech.
Craven reports that SCE now says they will charge between $400 and $600 for that meter — which is still high, but better — and San Diego Gas and Electric (SDG&E) has dropped their price (for that same meter) from $600 to $495.
He said all three utility companies have been charging an $800 connection fee that is illegal under California net metering statutes. The California energy commission ruled that when battery storage is paired with solar it is an “addition and/or an enhancement to solar” and therefore falls under all prevailing net metering statutes and one of those statutes is that there may be “no application fee charged.”
Hanan Eisenman, from San Diego Gas & Electric (SDG&E), insisted the interconnection fee is assessed in compliance with California Utilities Commission rules. In addition, they need to install a new meter (the one Craven was talking about), which costs approximately $400, to accommodate this technology.
He added, “SDG&E’s position is that each customer should pay for the services they receive and not the ones they don’t. SDG&E incurs costs to be ready to provide standby service to energy storage customers to ensure that their peak demand can be met when their equipment fails to operate. SDG&E believes that energy storage customers should pay these costs rather than other customers who do not benefit from these investments.”
Utilities also incur costs when they provide standby service to energy storage customers to ensure that their peak demand can be met when their equipment fails to operate.
As there is not a set policy at this time, Eisenman said, “SDG&E has decided to waive the standby charges for storage devices at this time. SDG&E may reexamine standby charges for storage in the future as part of broader examinations of rate design and equitable treatment of all customers in proceedings in front of the CPUC.”
Pacific Gas & Electric (PG&E) provided a California Public Utilities Commission report that shows the present rate system is not structured in a fair manner. However the inequality appears to be within the net metering sector and, as a class, they “pay their cost of service.” (p 105 & table 56):
“As shown in Table 56, the median NEM customer’s annual bill is only 57% of the cost of serving that customer. Approximately 78% of NEM (Net energy Metering) customers pay less than their cost of service. Nevertheless, as discussed in Section 5.2.2, NEM customers as a group pay their cost of service. This aggregate result is driven by a minority of large, non-residential NEM customers who significantly overpay their cost of service.”
Craven challenges this study, which adds onsite consumption of solar to the alleged “cost” of net metering and also fails to consider a complete range of societal benefits to the environment and the economy.
As regards the popular conception that this is another outbreak of the solar vs utility conflict, Dave Eisenhauer, of Pacific Gas & Electric (PG&E), said, “Our record demonstrates our commitment to rooftop solar. One out of every four solar installations in the United States is made in our territory. More than 100,000 in total.”
In one of his company’s recent news releases, it states, “Since 2002, PG&E has signed 155 contracts for more than 10,600MW of eligible renewable power. PG&E has the cleanest energy portfolio among American electric utilities. More than 55 percent of our electricity comes from non-greenhouse gas emitting sources …”
A large proportion of that electricity comes from natural gas, but 22.5% came from renewable sources.
SDG&E stated they provided grid services to approximately 34,000 rooftop installations that can produce 240 megawatts of electricity at peak output.
In his interview with PV Tech, Craven said that battery storage customers are being made to wait from “29 weeks to infinity, with the best case scenario in PG&E territory, where 11 customers have been interconnected to date, followed by SDG&E with just one and SCE lagging far behind with no interconnections to date out of 140 applications submitted since 2011.”
He also mentioned that “some utilities have been interfering with the interconnection process.”
The ECOreport has heard a similar report from one of its contacts.
SDG&E has a new online application and fast track process to make the interconnection procedure faster and easier than ever before. They said it takes an average of just four or five calendar days to authorize a solar customer following the initial inspection by the city or county, which is the fastest approval time in the state. By using the fast track options, customers can interconnect their solar panels on the same day.
Eisenman said, “SDG&E also supports energy storage technologies and believes these systems have the potential to enhance reliability, integrate electric vehicles and smooth the fluctuations in supply of intermittent renewable resources.”
He added that “SDG&E has responded promptly to the energy storage applications it has received. SolarCity has submitted only two complete energy storage applications to SDG&E. Once the facilities were installed, the applications were submitted and the city inspections completed, these two applications were authorized by SDG&E within days. A third application has not been completed by SolarCity and we are awaiting additional materials. SolarCity has not submitted any other applications to SDG&E.”
Eisenhauer said PG&E has done so many rooftop solar installations that jobs are usually authorized within five days of the initial inspection. It takes longer to process interconnecting residential storage systems to the grid: eight to ten weeks. This will speed up as they become more familiar with the process.
He did not know how many applications SolarCity has sent it, but PG&E has received a total of 20 residential applications, of which 8 are now operational and the rest are in process. They have also received 35 commercial applications, and 16 are now online.
Craven said they have not submitted more $800 applications because the queue is not moving. That can get expensive. When the utilities start clearing up the backlog, SolarCity will add more.
On a somewhat related issue, the California Public Utilities Commission has set targets for the state’s investor-owned utilities to procure a total of 1,325 megawatts (MW) of energy storage technology by the end of 2020.
PG&E’s portion is 580 MW and Eisenhauser said they are well on there way to achieving it.
SDG&E’s share is 165 MW, which Eisenman said they will reach.
Southern California Edison did not respond in time for this article, but there will undoubtedly be further clarifications.
Photo at top of the page: Cover of the California Public Utilities Commission Report “California Net Energy Metering, Ratepayer Impacts Evaluation” (Oct 2013), which is used in the article