Wednesday, March 7, 2007

Net metering

McDonough made a good point this week on New Dimensions Internet Radio in the Monticello Dialogs Part 6. Our reliance on ghost energy puts us in a position where returning to nature is not possible, we must move through technology. Now McDonough is immediately followed by Gary Snyder making an equally important point that direct experience of nature is required to become a deep ecologist. Nice programing. There is not really a contradiction here, the man who wrote Ax Handles does not eschew technology while the man who is redesigning technology to follow a natural flow does so, in part, to leave space for nature.

Let's go with what McDonough is saying. We are reliant on a system to support a world population that is going to get to 11 billion people that uses more energy than photosynthesis can support. This is why ghost energy seems like such an addiction. Doing anything that might interfere with out ghost energy seems scary. Some states provide huge subsidies for ghost energy while limiting people's access to real energy. Real energy seems like the nose of the camel coming in under the tent. It feels this way because ghost energy, with its thousand fleas, is already so comfortably bedded down in the tent that we don't notice ourselves scratching anymore.

But, now we do have an itch and it is a pretty big one. It turns out that since we started burning coal we've changed the atmosphere to the point where we are not really sure what might happen as a result. So, instead of looking at real energy as a interloper we're beginning to look at is as a means of salvation. There are a number of ways that real energy is becoming available but I thought I'd talk about net metering because I'm paying attention to it just now.

Net metering means that when people generate real energy they can send what they are not using themselves out to the grid for other people to use and when they are not producing real energy, they can pull in some ghost energy for use. That's ghost energy that other people didn't use when the net metering rate payer was sending real energy out. All together, the net metering rate payer is only using real energy. One meter is used which can run backwards or forwards to to keep track of how energy flows into and out of the grid. So, the electric utility no longer knows how much power you use, but rather what the difference is between what you produce and what you use. If you use less than you produce, you pay them the difference. If it is the other way around, well, rules vary. But there is another important aspect of net metering. It has to last at least a year. So, for solar power, if your system can generate all the power you use in a year, it is no longer important for it to generate the most power you ever use. Your system can build up energy credits in the Spring and Fall and these can be used in the Summer to cover air conditioning and in the Winter to account for the shorter days. This sounds honest and fair except for when some utilities just confiscate the extra power you might have produced in a year. Where is the problem?

The main difficulty is that rate payers don't pay their bills anymore. Now the utility doesn't have to pay for fuel any more either, and especially when the fuel is the most expensive kind during peak demand so they actually save money. But what is scary is that the utility's ability to skim profit off a rate payer's bill goes away. This means share prices will be lower because there is less profit to skim per share.

So, utilities try to minimize the amount of real energy coming into the grid through net metering by asking for very tight caps. In Maryland, I've already mentioned Senate Bill 595 on my new sales site which would increase the cap from 34.7 MW to 1.5 GW. In the House of Delegates there is House Bill 858 which would remove any cap on net metering capacity. The sponsor of Senate Bill 595 would probably go along with the House Bill, so really the only thing to do is to check the House Bill, which is a bit longer, for booby traps and then give that support once inconsistent carryover language has been adjusted.

In Maryland, people can save money using real energy under net metering so removing the cap should get us away from ghost energy in an important way. What about the utilities? They've got it wired. They are pushing for time of use rates so they can charge other rate payers extra for what the net metering rate payers are producing. So, my advise to utility share holders is double dip: start net metering and skim the profits too.


Chris Dudley said...

Well, the Maryland House bill on net metering went nowhere. The Senate bill passed but became much more that just a net metering bill. It also gives a gift to utilities by allowing them to confiscate extra power you generate after a year. But now, with the bill passed in the Senate (thanks Senator Middleton) and the House there is something strange going on. So, if you are in Maryalnd, call you Senator on Monday morning.

Chris Dudley said...

It turns out that the utilities can go too far as well on time of use rates. It looks as though California's move towards solar power is being impeded by a deal to require time of use rates for cutomers with solar power systems. The California PUC is going to try to do something about this.

One thing to notice is that people are beginning to look at the details rather than leaving it to the utilities. I think this means that we'll be seeing more creative solutions as we go along.