Solar and Wind Power Fees for Oklahomans

[Townsend]

I've been watching this and now that it's signed into law, it's another verification that our lawmakers are dumb as love. ("love" is actually the F bomb)

A Tax on the Sun? That is What Some Call a New Oklahoma Fee



http://kwgs.com/post/tax-sun-what-some-call-new-oklahoma-fee

Is Oklahoma about to institute a "Sun Tax"?

The legislature has passed and the Governor has signed a measure allowing electric companies to charge an additional fee to customers who get part of their power from wind or solar energy.

The problem is the fee has not been set. That will be up to the Oklahoma Corporation Commission.

Seth Christ is with Ion Solar in Tulsa:

SETH CHRIST: "Mr. Customer, if you would like to install wind or solar, we want to charge an additional fee. Is it $5 a month, $50 a month, a $100 a month? We don't know."

He says older customers will be grandfathered, but he doesn't understand why the state is turning its back on a green energy source.

SETH CHRIST: "All other progressive states are going the opposite way, you know, helping people. Solar and wind, Distributed Generation is what it is called, has value in our state. But, we are going the other way and creating a Sun Tax."

He says that uncertainty is impacting business. Christ says until that fee is set; customers are hesitant to consider a greener source of power.

The Public Service Company of Oklahoma pushed for the plan. PSO's Stan Whiteford says the utility is not opposed to green energy. He says the wind does not blow nor does the sunshine 24/7.  Whiteford says it costs PSO to same to supply service to those solar customers during their (customers) no generation time.

STAN WHITEFORD: "Senate Bill 1456 was not to pick winners or losers, but to make sure customers that have Distributed Generation and those who don't are neither advantaged or disadvantaged.

Whiteford says it is wrong to call it a fee or a tax. He says it is a but tariff.

STAN WHITEFORD: "All customers have a tariff. Residential customers are on the Residential Tariff. Industrial customers are on the Industrial Tariff. All parties involved will be creating a Distributed Generation Tariff at the Corporation Commission.

The law goes into effect in November. Christ expects a legal challenge to the law.

You know anyone who says, "this is totally what I wanted my representation to decide for me..."

Anyone think this was done due to money in back pockets?

Anyone know if this will come under scrutiny due to constitutionality?

[AquaMan]

Better not drill your own water well, erect a wind mill or create your own methane. You'll be judged a non-contributor to the infrastructure cost and therefore subject to fees. Oh, wait......the petroleum industry would only be concerned with your methane.

Corporate subsidization of political campaigns is really paying off.

[sgrizzle]

For time number 1,000 I've replied to this:

The fee is only applicable if you have solar or wind power and intend to SELL IT back onto the grid. That requires additional infrastructure, meters, billing systems, etc.

[patric]

The fee is only applicable if you have solar or wind power and intend to SELL IT back onto the grid. That requires additional infrastructure, meters, billing systems, etc.

The "smart meter" AEP put in after THE ice storm at our place is apparently capable of distinguishing between "Delivery" and power being pushed back (and metering accordingly) so that much is already in place.  
Maybe we will get a rate increase so they can develop a new billing system?

[Townsend]

For time number 1,000 I've replied to this:

The fee is only applicable if you have solar or wind power and intend to SELL IT back onto the grid. That requires additional infrastructure, meters, billing systems, etc.

Why does there need to be a law?

[AquaMan]

To discourage the trend. It's only a few states who have passed these laws.

[sgrizzle]

Why does there need to be a law?

Everything the utilities do is defined by law. Prior to this law, they just had to hook people up and distribute the costs across rate payers.

[AquaMan]

Everything the utilities do is defined by law. Prior to this law, they just had to hook people up and distribute the costs across rate payers.

And they asked for the law. Are you saying that the power they buy from the solar homes is of no value? They do not resell it? Is it not fungible?

The model the solar companies work from is in conflict with the utility companies model so the lobbyist's battle for position.

[sgrizzle]

And they asked for the law. Are you saying that the power they buy from the solar homes is of no value? They do not resell it? Is it not fungible?

The model the solar companies work from is in conflict with the utility companies model so the lobbyist's battle for position.

I believe the producer would receive the profits from the sale of electricity they generate. Most likely the utilities are required to pay them a set market price equal to what they charge.

Examples of how it works:
When you buy a $20 widget the retailer makes $7 and the producer makes $9. leaving a cost of production of about $4.
When you buy $20 of electricity, in a regulated market (like oklahoma) the cost of production and distribution is $19, and the producer/distributor nets about $1.
In a deregulated market, the cost of production and distribution is still $19, the producer makes $1-$2, the distributor makes another $1-$2 and the retailer makes another $5-10.

[AquaMan]

I believe the producer would receive the profits from the sale of electricity they generate. Most likely the utilities are required to pay them a set market price equal to what they charge.

Examples of how it works:
When you buy a $20 widget the retailer makes $7 and the producer makes $9. leaving a cost of production of about $4.
When you buy $20 of electricity, in a regulated market (like oklahoma) the cost of production and distribution is $19, and the producer/distributor nets about $1.
In a deregulated market, the cost of production and distribution is still $19, the producer makes $1-$2, the distributor makes another $1-$2 and the retailer makes another $5-10.

I won't argue your numbers though I will say the cost of production is not readily discernable from your example of widgets. I'll stipulate you're a utility company employee if you'll stipulate I'm a business school graduate.

Now, I have to say that I just heard the utility spokesperson on NPR explain that the reason for this fee is that on cloudy days the grid has to provide for the solar linked customer and that the rest of the rate payers are footing that bill (of course he said nothing of the return electricity offsetting that cost, in fact, unlike you, he didn't mention it at all). Whether it goes to the producer or the distributor doesn't seem germane to me. It is of value and is being ignored.

Let me put it another way. At what point, and in what manner, is the end user determined to not be carrying his own weight in the cost of distribution? Lets assume that OK has 20% of its days as cloudy and they are mostly in the winter. That is what the utility guy says triggered the fee. If I build a new home using the latest in efficient insulation and design that saves me 20% on my utility bills....have I reached that threshold? If so I need to pay a "slacker" fee. If I build a new home and decide to use geo-thermal to heat it and generate electricity am I going to have to pay a fee? If I don't and the solar/wind user is assessed because he sold back his excess capacity is that fair?

No, it is not and I wonder how this will hold up in court.

[heironymouspasparagus]

For time number 1,000 I've replied to this:

The fee is only applicable if you have solar or wind power and intend to SELL IT back onto the grid. That requires additional infrastructure, meters, billing systems, etc.

Like they don't already have massive infrastructure...the connection is a switchbox that the homeowner pays for at time of installation, if they want to feed back to grid.  This is just BS.  Gotta protect the natural gas industry in the state.  And coal from Wyoming....

The homeowner pays 9 cents, but if feeds back to grid, gets paid a penny or two.  Don't know why anyone would want to already pay the connection equipment costs, then only get a pittance like that....no payback ever.

[TeeDub]

AEP/PSO doesn't want to pay you what you pay per kw/h for electricity you put back into the grid.   (From what I am told, this is the way it did work.    It just rolled your meter backwards and that much electricity didn't get billed/was credited at your kw/h rate)   They want to pay you based on what it costs them to buy from the lowest cost provider at the time.

[patric]

AEP/PSO doesn't want to pay you what you pay per kw/h for electricity you put back into the grid.   (From what I am told, this is the way it did work.    It just rolled your meter backwards and that much electricity didn't get billed/was credited at your kw/h rate)   They want to pay you based on what it costs them to buy from the lowest cost provider at the time.

But isnt the idea behind a Smart Meter to be able to track that rollback so as to apply a different rate per kWh?

[guido911]

What is this stuff I am hearing about a tax on the sun?

[sgrizzle]

But isnt the idea behind a Smart Meter to be able to track that rollback so as to apply a different rate per kWh?

No, the point of a smart meter is to automatically report it's usage data over 3G instead of being read manually, which means you can do variable rates.

It also could serve as the communication hub for smart appliances and HVAC equipment in your house.