CPS Energy Approves New Solar Fees

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The San Antonio skyline beyond rows of solar panels. Photo courtesy of UTSA.

The San Antonio skyline beyond rows of solar panels. Photo courtesy of UTSA.

The CPS Energy Board of Trustees approved a proposal Monday to start phasing in a grid fee to solar customers in order to “recover cost of service” that customers avoid by installing solar panels. The proposal will be sent to City Council for analysis and a June vote.

“By no means is this a done deal,” said Mayor Julián Castro, an ex officio CPS Energy board member. “I’m willing to be supportive of at least forwarding this to (City Council) where we’ll have more of an opportunity to dig into this in an open session.”

CPS Energy Executive Vice President Cris Eugster outlined the plan – which proposes both a fee per installed kW and a one-time $450 “commissioning” or installation fee that would be subtracted from customer rebate checks –  during the regularly scheduled meeting through a presentation you can download by clicking here.

CPS Board of Trustees meeting on May 19, 2014. Photo by Iris Dimmick.

CPS Energy Executive Vice President Cris Eugster presents to the CPS Board of Trustees on May 19, 2014. Photo by Iris Dimmick.

“We’re trying to transition (from rebates) to a market based model,” Eugster said to the board. “We have a proven track record” in terms of aggressive, effective solar energy management and CPS Energy believes this new fee to be a reasonable, necessary one to continue on a course to “expand the rooftop solar program.”

The issue of cost recovery and integration of more rooftop solar is a national one, Eugster said. “If we could figure this out, we could be a leader in the nation.”

San Antonio ranks sixth in the nation for solar as of 2014, according to The Environment Texas Research and Policy Center report, Shining Cities:  At the Forefront of America’s Solar Energy Revolution, largely due to its comparatively generous rebate program, Eugster said.

Castro was critical of how a fee and rebate decrease would encourage growth.

CPS Board of Trustees meeting on May 19, 2014. Photo by Iris Dimmick.

Mayor Julián Castro listens to an overview of the proposed grid fee during the CPS Board of Trustees meeting on May 19, 2014. Photo by Iris Dimmick.

“If the goal is to increase the amount of rooftop solar, what element of this plan do you see as (achieving that)?” Castro asked.

CPS Energy President and CEO Doyle Beneby clarified that the grid fee would stabilize the local solar price so that “we have a reliable funding mechanism – so we’re not at this point every four years … then (CPS Energy) can be in a position where we can incentivize more because we have a sustainable model that demonstrates cost recovery. By the time this is done, we’re going to find a way to have longer funding and stronger funding.”

Solar industry advocates and installers were present during the meeting, Citizen comment was invited in prior meetings but not at the board session.

“They’re saying that if (CPS Energy) can get money from solar adapters for fixed costs recovery, then they’ll feel better, so it will be more likely to support solar,”  Solar San Antonio Executive Director Lanny Sinkin said in reaction to Beneby’s explanation.

If approved by City Council, the grid fee would be phased in starting with a monthly charge of $1 per AC kilowatt (kW) of installed capacity and increase to $3.50 in coming years. At $1, this fee translates to $5 per month, or $60 per year for the average residential solar installation producing five kW per month, the equivalent of an $800 per year savings in energy costs.

At $3.50, the average total yearly cost would be about $210, or about 26 percent of solar customer savings.

CPS Energy calculations in Monday’s proposed fee schedule projects the expected pay-back period for the average rooftop solar array to increase from nine years to 10 years during the grid and commissioning fee program’s initial year. This initial year calculation assumes no increase of the price of installed capacity.

Fully phased in at $3.50 per for an average 5 kW system, the payback period jumps to 12 years. That estimate assumes a continued price decrease of installed capacity of about 10 percent per year (a “middle of the road” market forecast, according to CPS Energy), totaling a $4,010 assumed cost decrease over three years.

Local solar companies worry that this 10 percent decrease in the cost of solar may be too ambitious due to pending tariff cases (read more below).

“Ten years is the sweet spot for getting people to invest in solar,” Sinkin has said in previous interviews. “Beyond that, people have a hard time imagining the return (on investment).”

After Monday’s meeting, Sinkin said that once rebates are lowered and calculations are made in the future, the payback rate could be closer to 12-15 years.

“If (solar) prices don’t come down as fast as expected, then we’ll adjust” the phasing of rebate decrease and grid fee increase accordingly, Eugster said.

The city has nearly 1,600 total distributed solar installations, as of February 2014, adding 16.5 megawatts to the CPS Energy portfolio which aims to have 771 megawatts (MW) of installed solar power capacity by 2020.

The Board of Trustees is chaired by Homer Guevara Jr., an economics professor at Northwest Vista College. Nora W. Chávez, managing director of Texas Public Finance group for Stifel Nicolaus & Company, serves as vice chair. Other trustees include Derrick Howard, executive director of Freeman Coliseum, and Edward Kelly, retired president and CEO of USAA Real Estate. Mayor Castro is the board’s ex-officio member, representing the City of San Antonio.

“This is related to 2,234 customers,” Kelly said, suggesting City Council consider all ratepayers when weighing the proposed fee changes. “Solar is great … but think in terms of the entire customer base.”

CPS Board of Trustees meeting on May 19, 2014. Photo by Iris Dimmick.

CPS Board of Trustees meeting on May 19, 2014. Photo by Iris Dimmick.

Originally published on May 15, 2014:

CPS Energy unveiled a plan at its monthly solar stakeholder meeting Tuesday, to present to City Council a “grid fee” and “commissioning fee” for residential and commercial customers that have installed solar panels connected to the local grid.

The public utility also announced a $20 million-plus addition to its solar installation rebate program through the Save For Tomorrow Energy Plan (STEP) for 25 megawatt (MW) more of rooftop solar systems in San Antonio.

A team of CPSE representatives explained the preliminary plan to charge $1 per AC kilowatt (kW) of installed capacity, starting in July (assuming City Council approval) and increase to $3.50 in coming years. At $1, this fee translates to $5 per month, or $60 per year for the average solar customer that produces five kW per month and saves $800 per year on their electricity bill.

At $3.50, the average total yearly cost would be about $210 on average, about 26 percent of solar customer savings.

CPSE Executive Vice President Cris Eugster at Alamo 1, currently the largest solar farm in Texas. Photo by Iris Dimmick.

CPSE Executive Vice President Cris Eugster at Alamo 1, currently the largest solar farm in Texas. Photo by Iris Dimmick.

“Solar allows customers to drastically reduce their energy bills,” stated CPSE Executive Vice President Cris Eugster in a statement posted on the CPSE Energized blog. “But the way utility rates are currently structured, CPS Energy doesn’t recover its cost of service from those customers. That cost includes maintaining the electrical grid, which solar customers still rely on to power their homes when the sun is not shining and to take any excess power their panels may generate.”

The commissioning fee is a one-time, $450 fee for installation and inspection of solar meters and connection to the grid.

At a time when the solar industry is faced with dwindling local and federal subsidies, local solar advocates and companies worry that another fee will further cut into the energy bill savings that solar customers have enjoyed for years. Additional costs to the solar customer also increases the length of return on investment/pay-back period for systems which cost on average $21,000 without any rebates and about $9,000 with local and federal rebates.

“When we first started this (rebate program), we didn’t really have anything to base costs on,” said CPSE Vice President of Communications Lisa Lewis during an interview Wednesday. “Now we have a much more true sense of the cost … The (grid fee) is associated with the (fixed) costs of maintaining the poles and wires that we all use.”

Solar advocacy nonprofit Solar San Antonio Executive Director Lanny Sinkin said he was surprised during the meeting yesterday to hear the proposal. During a phone call on Wednesday, Sinkin said the Solar Working Group, established 11 months ago, was not notified during April’s session nor was the proposal brought up during a May 8 solar roundtable discussion. According to Sinkin, these kinds of fees were merely an option up for consideration until Tuesday’s announcement.

Solar San Antonio Executive Director Lanny Sinkin

Solar San Antonio Executive Director Lanny Sinkin

“It has us all shaking our heads,” he said. “This lack of communication was what we were trying to avoid (by establishing) the Working Group – we were narrowing down the field to models that might work … and then, bam, they go to the (CPSE solar stakeholder) meeting with this proposal.”

Next, the proposal goes before a staff-briefed CPSE Board of Trustees for consideration at 1:30 p.m. on Monday. If approved by the board, the fees will go before City Council for a vote in June. The new fee program would only affect new solar customers that install after July 1.

Lewis said CPSE had been reviewing different pricing and fee options with many different groups during many meetings, found the grid and commissioning fee to be the most balanced, and presented their findings during Tuesday’s meeting, which includes a broader base of industry stakeholders.

The Solar Working Group was established right after the SunCredit program was rejected by local stakeholders around this time last year. The SunCredit, proposed to replace the current net metering system, would have reduced customer credit by half and lengthened pay-back periods. After objections from the local solar industry, CPS put the SunCredit program on hold for one year, pending review by the public-private Solar Working Group to work out a mutually acceptable plan.

Welcome to a year later. CPSE is keeping its net metering system, but may be in for the same kind of industry push-back against the grid fee, Sinkin said.

“Each time someone reduces their consumption of electricity, their contribution to fixed costs is reduced … So if I get a STEP rebate to make an energy efficient improvement on my home, I’m going to lower my (electricity) usage and therefore lower my contribution to fixed cost recovery,” Sinkin said. But the fee only applies to those utilizing the solar rebate.

The 10 kW solar array at Lake/Flato. Photo courtesy of Brantley Hightower.

The 10 kW solar array at Lake/Flato. Photo courtesy of Brantley Hightower.

In addition to this possible new fee, the solar industry as a whole is facing the possibility of price increases this summer as international tariff cases make their way through the U.S. Commerce Department, which is “scheduled to make a preliminary determination on anti-dumping duties for China and Taiwan.” These duties, which are imposed on foreign imports that the department believes are priced below fair market value, may mean a 25-45 percent increase of the cost of imported solar panels.

The 30 percent federal tax credit for commercial solar installation expires in 2016, dropping to 10 percent. The 10 percent credit drops to zero for residential systems.

“That’s a cliff out in the future,” Sinkin said, adding that the growing national campaign against solar energy gaining strength from fossil fuel industry stakeholders is another cause for concern.

For CPSE, however, the issue remains that of cost recovery.

“CPS Energy is doing more than just maintaining the grid. We’ve just begun a $290 million upgrade that will give it 21st century communication capabilities, increasing reliability, boosting efficiency and better able to integrate ever larger amounts of solar power into the system,” stated Eugster.

CPSE Vice President of Communications Lisa Lewis

CPS Energy Vice President of Communications Lisa Lewis

“Transmission costs $1 million in a year total, if (solar customers) don’t pay a portion of that, then it has to get paid by other customers,” Lewis said. “Bills will never go down, the best we can do is slow how fast they grow” and make sure customers are treated fairly.

The additional 25 MW addition to the STEP rooftop solar rebate program will be spread out over several years in decreasing amounts of rebate per kilowatt hour (kwh), Lewis explained.

The expected “$20 million in rebates will be reallocated from other STEP programs,” stated Eugster.

The first 10MW of projects will receive the current rebate, $1.60 per kwh. The next 10MW will receive $1.15 per kwh rebate.* The remaining 5MW of projects will receive a $0.70 per kwh rebate.

The grid fee increase will directly correlate with the rebate decrease, Lewis said. “The idea is to create certainty around what (customers) can expect for return on investment … We can’t control whether or not the (solar) system is going to perform – you can’t calculate what the return on investment is if the fee is flexible.”

The CPSE board meeting on Monday is open to the public, but there is no citizens to be heard session.

Full disclosure: The Arsenal Group LLC, which publishes the Rivard Report provided consulting services to CPS Energy in 2012. Monika Maeckle, who co-founded the Rivard Report, now works for CPS Energy as director of integrated communications.

Featured/top image: Ralph Talbott stands with his rooftop solar panel array in San Antonio. Photo by Iris Dimmick.

*Correction: An earlier version of this article stated the second 10MW rebate at $1.50, it has been corrected to $1.15.

Related Stories:

Coming to Grips With a Fading Mission Verde

UTSA’s Next Generation Imagines San Antonio 2040

Alamo 1 Solar Joins the CPS Energy Grid

CPS and Solar Industry Compromise As Rebate Demand Spikes

25 thoughts on “CPS Energy Approves New Solar Fees

  1. When Arizona Public Service adopted a fee on solar installations of $.70 per kilowatt per month, solar applications declined by 40% in the next three months. CPS Energy is proposing a fee starting at $1.00 and rising to $3.50. The CPS Energy fee will be the highest in the nation.

    • We recently had a local firm install a 17.9 Kw DC solar array on the roof of our home. Had the CPS proposed rebate change and fees been in place at the time we never would have made the investment. I’ve calculated the effect of their proposal and found that our break-even point would move out from 7 years to 10 years. The most damaging aspect of this new program is the imposition of a monthly fee. How could anyone commit to a solar project with no certainty on their power savings? What would prevent CPS from raising the fee in the future?

  2. The article raises a good point that improvements in efficiency put a strain on infrastructure maintenance. The same argument is being made with hybrid cars, and if we found ways to drastically reduce water consumption would likely be made by water utilities. Maybe the long term solution is to improve efficiency of our infrastructure rather than increasing fees to maintain inefficient infrastructure. I don’t think the problem lies with the infrastructure efficiency itself, but rather how we build our city. Low density development also means low density of consumers on the infrastructure. That is the main reason the cable companies provide limited support outside of the city. The low customer base won’t support the operating costs. This is a call for true urban development. More intense development has many advantages, including more dense customer base on utility infrastructure, a better environment for transit, cycling and walking, and more efficient city services. Seems like yet another realization that suburbia and sprawl are not in our best interest.

    • Please. They spend millions on lobbying and elections don’t even try to tell me about infrastructure repair costs. We need to let go of this antiquated infrastructure, but unfortunately it has made a few greedy families all too powerful. This does nothing but slow progress to a grinding halt.

  3. Can I just get off the grid completely? Can I utilize rain harvesters and leave SAWS for good? Are power systems preventing me from doing these things?

      • “Bills will never go down, the best we can do is slow how fast they grow”

        What a disgusting pig. The reality is that bills would fall if capex declined as projects were paid off. But that never happens because they insist on existing residents subsidizing additional wasteful supply for certain groups of customers (poor, big business, energy hogs, govt) and for future “growth” that doesn’t pay for itself. As a result debt service for capex never significantly declines.

        Also, as with cars and air quality, we should be able to take advantage of “fleet turnover” i.e. more efficient appliances and devices. But if the debt service for capex never declines, then any improvements in efficiency are never passed on to the consumer.

        The same thing would be happening if CPS were private; in fact a private utility would force citizens to subsidize new growth even more plus divert additional amounts to pay themselves and shareholders.

  4. Monthly “per kilowatt” fees make little sense. If the transformer on the pole is sized for 40kW AC, a 12 DC solar array can be easily accomodated without hardware modification. While these distribution transformers were not intended to be backfed, voltage controls inside solar inverters effectively address the voltage rise issue.

    Additionally, research shows that these transformers actually last longer when near solar arrays, due to decreased load at the hottest times of day – which makes “per kilowatt” fees all the more ludicrous. Distributed solar reduces grid hardware costs. Administrative costs may be increased, but these costs can be avoided through automation.

    Per “kilowatt hour” fees make more sense, particularly when the utility otherwise provides retail price net-metering. Even in those cases, a fair “per kwh” solar tax on backfeeding is only justified if solar is afforded the same access to financing as other power projects which utilitize the electric grid. If the grid is a pubic asset whose costs must be equitably divided amongst all its users, then the public should be able to vote on bond financing for distirbuted rooftop solar projects vs. new gas + coal power plants! If this were the case, we could eliminate all solar subsidies and still have it come to the grid – a true win for the enitre public.

    The real farce is that CPS provides solar incentives while proposing solar fees! Talk about an inefficient system! Why not eliminate their solar incentive department and continue to provide net-metering? Wouldn’t that be the most “fair” solution? Is job protectionism standing in the way of sound fiscal policy?

  5. Hi all,

    Appreciate the dialogue. This is an issue facing utilities across the country, and I don’t think there’s going to be one right answer.

    Also, in the interest of full disclosure, I work for CPS Energy, managing and writing for its blog.

    One thing I wanted to note — Lanny points out that those who get a rebate to make energy efficient improvement to their homes also use less power, and so pay less toward the maintenance of the grid, yet aren’t charged a grid fee, as will likely be the case for solar customers.

    But reductions in energy use from efficiency are relatively small per customer and there are many more customers participating in energy efficiency. So the resulting costs and benefits are more readily socialized across the our customer base and community.

    Solar customers, on the other hand, can install systems that drastically reduce their bills – in some cases down to zero – and so don’t pay for the grid, which they still use every day, both when the sun doesn’t shine, and to accept the excess power those systems generate, which CPS Energy buys.

    As to JR’s question — the fee allows CPS Energy to recover its cost of service, while the rebate allows it to support a new and growing industry. The rebate has been reduced as the price of solar goes down, and some day won’t be necessary at all, but the fee is simply for the cost of service. Hope that helps.

    Thanks to Iris for a balanced story. The CPS Energy board is taking the issue up Monday, so expect more news then.

    • The CPS Energy Save for Tomorrow Energy Plan (STEP) provides rebates for many different improvements that reduce energy usage (demand). Tracy is correct that far more customers have used the energy efficiency rebate than have used the solar rebate. What that means, however, is that the aggregate of energy efficiency actions that reduce demand have reduced fixed cost recovery far more than any reduction attributable to solar. To date, the STEP program realized at least 318 megawatts of demand reduction. Solar capacity in place on rooftops — not utility scale — is 17 megawatts. More than 90 % of the demand reduction that reduced CPS Energy’s fixed cost recovery is, therefore, coming from non-solar actions. Yet only solar is being asked to pay a special fee to compensate the utility for reduced fixed cost recovery.

      Equally important is that solar delivers benefits to the utility and ratepayers that are not considered by CPS Energy as offsetting any reduction in fixed cost recovery. Among those benefits are:
      — demand reduction that frees up capacity to be used to meet other loads or to sell into the ERCOT grid
      — reduced pollution through replacing fossil generated electricity with solar generated electricity
      — reduced wear and tear on equipment because distributed solar stabilizes the grid
      — reduction in the utility demand for water in the midst of a serious drought
      — delay in the need to add central generation capacity to the CPSE system
      — economic development with the local solar industry now employing hundreds of people and installing millions of dollars worth of equipment each year
      — reduction in the utility’s carbon footprint
      — avoiding the cost of adding new transmission lines and equipment

    • Tracy, a few basic questions. Is there a minimum fee charged by CPS Energy for being connected to the grid. Do you provide net metering for kWh put back on the grid or do you buy at wholesale to the solar rooftop provider and than sale that power to others at retail prices?

      Replacement of distribution lines is one of the highest costs to a utility. It was rightly pointed out that solar systems can actually help to improve the life of a residential or business transformer. But solar also helps to reduce the issue of line diameter being too small for higher amperage requirements versus the 1950’s and 1970’s. Thus how does solar power added to the grid positively impact reducing overall costs for providing power for all customers?

      Why not just finance your customer’s installations? This improves CPS financial picture while providing a lower cost to your customers.

    • “Solar customers, on the other hand, can install systems that drastically reduce their bills – in some cases down to zero – and so don’t pay for the grid, which they still use every day, both when the sun doesn’t shine, and to accept the excess power those systems generate, which CPS Energy buys”

      This statement is duplicitous. CPS is not buying this energy from solar panel owners. It is accepting it on to the grid and selling it to consumers. Otherwise, they would purchase energy from Blue Wing Solar Project, South Texas Project Unit 1, South Texas Project Unit 2, JK Spruce Unit 1, JK Spruce Unit 2, JT Deely Unit 1, JT Deely Unit 2, OW Sommers 1, or OW Sommers 2 and sell THAT purchased energy to consumers. The profit margin must be higher in the former case.

      The revenue should be more than sufficient to maintain the grid AND pay off the initial investment (rebate). Once this rebate is paid off, this energy should have zero marginal cost.

      CPS needs to readily and cogently demonstrate to consumers how in the world they are not able to manage these costs. They didn’t ‘think’ this out? Are these people inept? When will the next level of expropriation occur?

      I would not have invested in solar panels had I known about the nickel and diming that CPS had in their plans.

      Well, actually, deep down I knew they would do it. What else can you expect from a putrid bureaucracy?

  6. The Board of Solar San Antonio adopted a resolution addressing the process by which CPS Energy brought out their proposed changes in their solar program.

    Solar San Antonio Board Resolution

    To: CPS Energy Board
    And
    San Antonio City Council

    WHEREAS, over the last fifteen years, Solar San Antonio laid the groundwork for the creation of a solar industry in San Antonio; and

    WHEREAS, CPS Energy’s commitment to solar to date has made San Antonio 6th in the nation in terms of solar energy online; and

    WHEREAS, there is now a thriving local solar industry in San Antonio; and

    WHEREAS, CPS Energy and the solar industry set up a Solar Working Group composed of representatives from CPSE and the solar industry to collaboratively address challenges facing the utility and the industry; and

    WHEREAS, the solar industry goals for the Solar Working Group were the following:
     Rebuilding trust between CPS Energy and the solar industry,
     Establishing an open dialog,
     Providing enough information that all parties can understand both the rationale and the impact of a particular policy,
     Implement new policies with adequate advance notice and time for comment prior to implementation,
     Develop a short term and long term plan for integrating distributed solar into the CPS Energy portfolio that supports a robust solar installation industry and avoids creating income difficulties for CPS Energy, and
     Developing a plan that minimizes CPS Energy’s contribution to climate change; and

    WHEREAS, The CPS Energy goals for the Solar Working Group were the following:
     Creating better understanding between CPS Energy and the solar industry as to the challenges faced by each,
     Acknowledging that distributed generation is coming and there is a need to figure out how to harmonize expanded DG with the revenue needs of the utility;
     Pursue a process that would go through five stages: (1) Recognition of the challenge, (2) Determining the best framework to address the challenge, (3) Apply and agree on estimates and the best framework to address the challenge, (4) Plan the roll-out of the plan, and (5) celebrate the accomplishment; and

    WHEREAS, the Solar Working has been meeting almost monthly for the past eleven months; and

    WHEREAS, the Solar Working Group has made significant progress in validating data and calculations, eliminating models that did not work, and developing alternative scenarios for addressing the challenges identified; and

    WHEREAS, in just the past two weeks, the Solar Working Group has received a model prepared by CPSE that allows testing various scenarios to determine whether specific numbers can be agreed upon to implement the model; and

    WHEREAS, the first opportunity for the solar installers as a whole to provide input to the Solar Working Group was a Solar Roundtable held on May 8, 2014; and

    WHEREAS, on May 13, at the monthly solar stakeholders meeting, CPS Energy announced a plan to reorganize the CPSE program supporting distributed solar energy system deployment; and

    WHEREAS, the plan presented included a new monthly fee to be charged to any new solar customer, a new commissioning charge to be paid by every new solar customer, a schedule for reducing the rebate, and other significant changes in the current solar program; and

    WHEREAS, the CPSE staff intends to take the new proposal to the CPSE Board for approval on Monday, May 19; and

    WHEREAS, the CPSE staff intends to take the proposal to the City Council in June; and

    WHEREAS, the CPSE staff intends to implement the proposal on July 1; and

    WHEREAS, the CPSE staff never presented the proposal to the Solar Working Group; and

    WHEREAS, the CPSE staff did not present the proposal to the solar installers prior to the stakeholder meeting on May 13; and

    WHEREAS, the solar installers at the stakeholder meeting raised many questions or concerns to which the only response from CPSE staff was “we had not considered that question,” or “we will get back to you on that,” or “we hear your concern;” and

    WHEREAS, the CPSE staff have provided only three working days for the solar industry to respond to the proposal prior to the CPSE Board taking up the matter; and

    WHEREAS, the entire process surrounding the new proposal violated the goals set by the Solar Working Group, particularly those goals calling for collaboration, adequate time to evaluate any proposal, and developing a plan on how to roll out any proposal; and

    WHEREAS, the CPSE process places the solar industry in the position of having to vigorously oppose the parts of the proposal that are harmful to their industry; and

    WHEREAS, the CPSE staff failure to respect the process set up for the Solar Working Group has created conflict rather than collaboration; and

    WHEREAS, there is national attention on San Antonio regarding the issues raised by the CPSE staff proposal, particularly the monthly fee to be placed on all solar adopters; and

    WHEREAS, adoption of the proposal may establish a precedent that will be used to further the national attack on solar now underway; and

    WHEREAS, the conflict now arising will damage San Antonio’s reputation as a solar- friendly city and a national solar leader; and

    WHEREAS, the conflict now arising may harm our efforts to convince Elon Musk to build his gigafactory in San Antonio; and

    WHEREAS, the Solar San Antonio Board has sought in good faith to bridge any gaps between CPSE and the solar industry;

    NOW THEREFORE BE IT RESOLVED by the Solar San Antonio Board of Directors that the CPSE Board be urged to refer the proposal at issue to the Solar Working Group for further discussion as a means of avoiding a confrontation and creating an opportunity for a consensus approach to meeting the challenges posed by the inevitability of solar.

    Adopted: May 15, 2014

  7. The cost for a 10kw system is estimated at $80,000 (with out subsidies). This is reduced to approx. 1/2 that number with a Federal subsidy of 25% for construction and the max. CPS subsidy of $30k. A 10kw system will overproduce sometimes in most houses and put energy back into the grid, thus augmenting the CPS grid(aka infrastructure). The owner is now asked, after spending $30k or so on infrastructure, to spend more. The “grid fee” is bad logic, bad politics, and bad management practice.

  8. When CPS proposed and encouraged the solar rebate program several years ago they were dealing with several problems. The first was to avoid building another power plant to satisfy the growing peak-time power demands. A decision to use coal or natural gas was uncertain since natural gas was priced considerably higher than today. Water for the power plant was also an issue. Solar seemed attractive because it offered power at exactly the right time and used no water. Today we have cheap and abundant natural gas. Solar is no longer strategic for CPS and they would probably like to see it go away. And it will go away with their fee proposal. Too bad they weren’t more honest when they encouraged us to put solar panels on our roofs.
    For CPS to say “When we first started this (rebate program), we didn’t really have anything to base costs on, … Now we have a much more true sense of the cost … The (grid fee) is associated with the (fixed) costs of maintaining the poles and wires that we all use.” is disingenuous.

  9. I currently do not have residential solar, but I have long had the ambition – including as a past renter – and I remember the days (no more than 12 years ago) when CPS had no solar or other renewable energy ambitions or options for subscribers whatsoever.

    In those days, solar power generated in San Antonio was sold to Austin Energy to fulfill the needs of Austin’s GreenChoice program subscribers. CPS offered
    San Antonians nothing similar (but in more recent years has offered the Windricity program) and advocated aggressively for coal-fired energy production instead.

    Solar San Antonio has long been a leading voice for renewable energy production in San Antonio and has helped to steer CPS in this direction. CPS has not been a leader in renewable energy production – distributed or otherwise – and appears once again to be a step behind or working against the public interest in this regard.

    With all the talk / hope of bringing Tesla to San Antonio (to build a gigafactory), with the latest proposed fees CPS appears to be acting in direct opposition to the type of distributed solar energy production and storage future that Tesla envisions and many desire.

    While SolarCity (the nation’s largest residential solar installer and associated with Tesla) performs successfully elsewhere in Texas (Dallas, Fort Worth and El Paso), and the around the country with a business model that greatly reduces the costs of solar energy production for homeowners (putting solar energy production into reach for many household), San Antonio is once again behind the curve due to the ‘leadership’ of CPS

    I am hoping that Solar San Antonio will weigh in more publicly about the roadblocks that CPS places to SolarCity’s and similar company’s operations in San Antonio, to the detriment of potentially luring a Tesla gigawatt factory to our region.

  10. CPS Energy President and CEO Doyle (Show me the Money) Beneby clarified that the grid fee would stabilize the local solar price so that “we have a reliable funding mechanism – so we’re not at this point every four years … then (CPS Energy) can be in a position where we can incentivize more because we have a sustainable model that demonstrates cost recovery. By the time this is done, we’re going to find a way to have longer funding and stronger funding.”

    That statement was probably worth the 400+K bonus he will undoubtedly receive!

  11. Any proposal should not discrimination against solar owners. – Solar panel installation is a large capital investment in a home. Even with rebates and Tax incentives solar costs many thousands dollars out of pocket. No one should not be subject to a solar Tariff or Tax.

    Under the proposed changes the more invested in the system and the more energy produced CPS during peak hours reducing CPS’s load and costs to buy peak power the more solar owners get charged? I thought that was the whole point of energy savings and it sure sounds more like a Solar tax rate then just a fee.

    CPS is only considering Solar owners that have managed to produce >100% of their energy bill. The other Solar owners that have <100% offset will also be billed with the solar tax plus their electric bill. They are paying CPS for energy used beyond what they produce. They are paying to maintain the grid per CPS's by having a bill. Now they have to pay twice? Same grid different price between neighbors due to CPS discrimination against solar owners.

    The amount anyone pays for the electricity they use should not change due to the existence of solar panels, wind panels, CFL lightbulbs, new A/C, insulation, etc, or anything some one invests in to reduce energy consumption. What about if someone puts up windmills for power, would they be subject to the same discrimination or is it confined to solar?

    If a solar system produces enough energy to sell to CPS the excess, that fact is completely separate from what is used at night. If a large energy company that produces power via Solar/Wind/Coal/Nuclear etc sells that said energy to CPS, does CPS charge the company a fee per kW? What happens when the company has an office in San Antonio? Are they not allowed to use the proceeds from the sale of the energy they produce to pay their bill? What if they pay their whole bill with proceeds? Should CPS be looking to insure they are paying into the grid as well with additional fees? The very concept is ludicrous and would never be considered yet here we are and the city counsel is going to vote on it.

    If this concept where applied to any industry not just Electric it would be just a crazy to suggest.
    Water – Would SAWS charge a fee for people who install water saving shower heads? How about a fee to do gray water collection for flower beds? Additional Tariff on rain water collection? A tax on Xeroscaping lawns that reduce water use after SAWS offered a rebate for this type of work? – (This one Sounds a little familiar)
    Electric – I've installed energy efficient LED lights in my home to reduce my energy usage. Should CPS charge me for that, I'm using less then my neighbor? What about my efficient A/C? or any other improvement I have made to reduce my energy consumption? Candles next? My AC broke and I used a lot less power for a given month, fee for that too?
    Cars- Should new truck owners pay more for gas then older truck owners since they use less gas and gas taxes go toward road maintenance? Hybrid owners pay more for gas? Electric car owns get charged a monthly electric car fee based on how much Gas tax they would have used if they drove a gas car?

    Why give someone $10,000 install a system then charge them $450 to hook it up? Why not just reduce the rebates? Instead we're expand the rebates? "CPS Energy is adding another $21 million to its rebate program because it wants to continue to support the industry" – Cris Eugster, Executive Vice President and Chief Generation and Strategy Officer

    How is this proposal even close to a market based model? Rebates = incentive not market. How is a fixed fee for solar owners a market approach? True market approach would allow solar owners to sell the power they produce at market rates or not sell at all. The rates would fluctuate too much to be able to reliable model ROI for systems but that would be a true market approach. "But the utility must transition from an incentive-based model to one more market based if it is to be sustainable as more customers put solar on their rooftops, he told the board" – Cris Eugster, Executive Vice President and Chief Generation and Strategy Officer

    I am supportive of a commissioning fee to tie into the CPS energy grid. That is a reasonable way to have Solar Customers help maintain the grid.
    This part of the proposal does not discriminate electric rates against solar producing families.
    The fee could be much higher then proposed as a one time fee of $450.
    It would accomplish the goal of “we have a reliable funding mechanism – so we’re not at this point every four years … then (CPS Energy) can be in a position where we can incentivize more because we have a sustainable model that demonstrates cost recovery. – CPS Energy President and CEO Doyle Beneby
    It is a defined cost that be planned, budgeted. Cost recovery still comes from overall reduction in power used (bought) by CPS.
    The fee would be similar in principal to the investment cost of an off the grid battery system at someone's house(although much lower in capital cost). Since CPS's argument is solar owners use CPS's grid as a battery at night it is a reasonable request in principal.
    Again though why the rebate and then a fee. Would not the same money from the reduction in the rebate go toward improving/maintaining the grid?

    I hope the city counsel rejects this proposal as it stands.

    As another commentator pointed out
    "Why not just finance your customer’s installations? This improves CPS financial picture while providing a lower cost to your customers." – John Nistler
    That business model seems to be working well for a lot of others (solar city)

  12. http://matter2energy.wordpress.com/2014/04/30/wont-anyone-think-of-the-seniors/#more-1164

    “As far as the grid is concerned, putting up a solar panel is exactly the same as turning off my aircon for 15 minutes a day. If you want to be a pedant, I’ll spread that 15 minutes out over 6 hours. I can do that by turning up the thermostat one degree.

    Now if they actually believed what they’re saying, I should have to pay an extra fee to turn up my thermostat. I should also be charged more to buy power saving appliances, installing LED lights, turning off my lights at night, or getting a Nest thermostat.

    Boiling it down you get this: according to this argument, anything that lowers my bill should raise my bill. Because not doing that would be unfair.
    So unfair, in fact…

    This whole idea is so terribly unfair that we have this.

    That’s right, this is a program that pays you to turn off your air conditioner for 15 minutes a day. Practically every power company is offering something like it these days.

    You know, precisely the thing that the exact same companies are saying we should be billed for.”

  13. With the proper amount of storage, there is no use of the grid when the sun isn’t shining. Additionally, every size system, relative to the home it is producing for, will access or “use” the grid for very different amounts of time.
    Also, when the “value of solar rate” is artificially reduced to a mere 3.4 cents/kWh it discourages designers from designing larger resi systems as the over-production is of little value to the homeowner.
    Enphase Energy just introduced a new energy management system that now includes modular 1kW AC Batteries. The right amount of storage would reduce or virtually eliminate the need for the grid and thus, eliminate the argument for these fees.
    Energy Freedom will become the new rally point.

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