I can’t speak to how the
I can’t speak to how the utilities feel about the matter (I suspect it varies widely between decoupled, regulated and unregulated, as well as by region and fuel mix) but there is a tremendous cost to the electrical grid from maintaining ramping capacity for peak load, and solar stands to make it worse, which is the point of the Duck Curve.

My point is that demand response and storage stand to be quite valuable as the grid comes to rely more and more on inherently intermittent renewable energy. Current estimates I have seen on the cost of peak load state that 10% of the US peak electrical load occurs in less than 1% of the year, and that a 10% peak load reduction is worth $8-28 billion per year. This issue will become more pressing in future.

In California, particularly in the south, there are all manner of demand response programs already in place (remote deactivation of residential air-conditioners, for example) which suggests that peak load is a concern for the utilities there.

My point is that demand response and storage stand to be quite valuable as the grid comes to rely more and more on inherently intermittent renewable energy. Current estimates I have seen on the cost of peak load state that 10% of the US peak electrical load occurs in less than 1% of the year, and that a 10% peak load reduction is worth $8-28 billion per year. This issue will become more pressing in future.

In California, particularly in the south, there are all manner of demand response programs already in place (remote deactivation of residential air-conditioners, for example) which suggests that peak load is a concern for the utilities there.

That’s right Bob. Using the
That’s right Bob. Using the number in your example, equivalency would actually be at 250 kWh. What CPUC is trying to avoid is $40/mo fixed + 7 cents. If the average customer uses 833 kWh/mo, then all of these would be considered revenue neutral. But the latter approach creates winners and losers. Perversely, the losers are the smallest homes and those who conserve or install PV.

Intersting idea, replace the
Intersting idea, replace the fixed monthly service charge with a minimum bill. Do something like 1st 300KWH $40/mo, 10 cents per KWH thereafter? Instead of $15/mo service charge and 10 cents per KWH?

Utilities by and large don’t have a problem with this. From a revenue perspective, they get their money one way or another. Short-term increases to wholesale power costs are recovered through power adjustment adders.

The disconnect between utility wholesale and retail pricing structures (for residential) is, and always has been a an issue of fairness. With energy-only tariffs, rural customers are subsidized by urban customers. Snowbirds are subsidized by year-round residents. Energy efficient homes are subsidized by energy hogs. The rapid growth of solar (especially what happened in Hawaii) has brought the fairness issue to a head, but I think it’s unfair to single out a a single class to go after the fairness issue.

Regarding CPUC’s mandate for TOU by 2019… this will eventually spread to other states but I’m not holding my breath. California’s regulatory actions are decades ahead of most states. One thing that’s interesting is that this new rate policy disallows high fixed charges in favor or minimum billing. This keeps the kWh rate higher (compared to what happens with a high fixed charge), thus retaining the incentive to conserve energy. OTOH, the EE folks were not happy with the reduction in the number of rate tiers. And of course, the movement to TOU depreciates the value of EE investments. So it’s a mixed bag.

Utilities by and large don’t have a problem with this. From a revenue perspective, they get their money one way or another. Short-term increases to wholesale power costs are recovered through power adjustment adders.

The disconnect between utility wholesale and retail pricing structures (for residential) is, and always has been a an issue of fairness. With energy-only tariffs, rural customers are subsidized by urban customers. Snowbirds are subsidized by year-round residents. Energy efficient homes are subsidized by energy hogs. The rapid growth of solar (especially what happened in Hawaii) has brought the fairness issue to a head, but I think it’s unfair to single out a a single class to go after the fairness issue.

Regarding CPUC’s mandate for TOU by 2019… this will eventually spread to other states but I’m not holding my breath. California’s regulatory actions are decades ahead of most states. One thing that’s interesting is that this new rate policy disallows high fixed charges in favor or minimum billing. This keeps the kWh rate higher (compared to what happens with a high fixed charge), thus retaining the incentive to conserve energy. OTOH, the EE folks were not happy with the reduction in the number of rate tiers. And of course, the movement to TOU depreciates the value of EE investments. So it’s a mixed bag.

There are current experiments with “Power to Gas,” converting summer solar energy to methane, but this is an inefficient process. My prediction is that winter power will become as expensive, or more so, than summer power, as a consequence of both high demand and low supply.

I agree that both TOU pricing (to provide incentives that align with costs) and storage are required to address the new reality. BTW, California’s utility regulatory board (CPUC) has mandated TOU pricing by 2019 (http://www.greentechmedia.com/articles/read/Breaking-California-Reaches-Compromise-on-Utility-Residential-Rate-Reform).

Regarding energy efficiency and thermal storage, the good news is that with efficient building shells you get thermal storage, along with lower energy consumption. In the short term (i.e. days) due to the building’s time constant; in the long term (seasonal) due to demand reduction (and use of internal gains) to address heating demand, which will be the biggest challenge in a renewable (high solar component) grid. In the future, building shell efficiency stands to be worth a whole lot as it will enable occupants to adjust the space conditioning schedule largely independently of hourly outdoor conditions. By contrast, inefficient building shells require space conditioning that is nearly aligned with hourly outdoor conditions – a big part of the California summer evening ramp is air-conditioning, for example.

I’ve played around with the Duck Curve quite a bit and have it in a presentation that should be available here before long (http://www.norcalsolar.org/events/net-zero-energy-homes-and-passive-house).