Customers of San Diego Gas and electric (SDG&E) could soon see a drastic increase in their monthly electric bills, as the utility has submitted to state regulators a proposal to raise the monthly minimum utility charge from $10 to $38.
The California Public Utilities Commission, is expected to make a decision on the proposal by spring of 2020.
In defense of the nearly 4x increase, SDG&E is arguing that the minimum bill increase is necessary in order to “ensure that all customers pay for their minimum threshold of service provided by SDG&E, even if they are departing load or DER customers.”
What the above quote shows is that SDG&E is employing the popular rhetoric that penetration of distributed solar customers onto the grid is raising overall service costs for the utility by virtue of these customers being able to profit off of their installations. This cuts into the utility’s overall profit, which is no bueno for said utility.
However this argument made, the existence of a “cost shift” from solar system owners to other utility customers, while common is not one made with the luxury of factual support. In fact, Lawrence Berkeley National Lab (LBNL) has looked at the overall potential rate impact of distributed solar under a variety of valuations, and has compared this to other rate impacts.
In most cases, the effects of distributed solar on retail electricity prices are, and will continue to be, quite small compared to many other issues.
So just how small are these effects? Well for starters, they’re just as well likely positives as negatives. At current national penetration levels, the report finds that distributed solar would bring no more than a .03 cent per kilowatt-hour ($0.0003/kWh) long-run increase in retail utility prices, but that the result could just as well be a decrease of the same magnitude.
But the state in question is California, with much higher residential PV penetration levels than the rest of the country. Well, the report adjusted for high penetrations levels too, finding that even if distributed solar were to represent 10% of total electricity sales, the impacts would be either a cost or a benefit of around half a U.S. cent per kilowatt-hour ($0.005/kWh). Meanwhile, energy efficiency measures are likely to have an impact of around $0.008/kWh, which could be a cost or a benefit.
In light of these figures and the proposed minimum bill increase, SDG&E has come under fire by those who see this proposal as a direct attack on distributed solar. One of the opponents of the bill increase is NeoVolta battery storage company CEO Brent Wilson, who said:
This is just another example of a big investor-owned utility trying to undermine solar. This notion that solar customers are somehow shifting the financial burden to non-solar customers is one of their favorite myths.
For now, the future of SDG&E ratepayers hangs in the balance, however it is a balance that can be influenced, as the California Public Utilities Commission is accepting comments on the proposal.