Validity of Grid Access Fees

...The Validity of Grid Access Fees

After every major storm, there is a hue and cry in the media about how the utility company didn’t do enough to protect its customers from outages and get them back online more quickly.

The vast majority of power interruptions are caused by the distribution system.

Most failures are caused by downed telephone poles, flooded cables, and downed distribution power lines. Ice buildup can, for example, cause distribution lines to break. Tree limbs falling on power lines are a significant problem.

Utilities are derided by the media and the public when it takes time to repair the downed lines, while the cost of placing lines underground, which can be more than five times the cost of overhead distribution, especially when converting from above to below ground distribution, results in increased rates.

The cost of maintaining distribution systems is significant. Tree trimming costs are important for minimizing outages.

Other distribution maintenance costs include; Washing insulators to remove dust and salt buildup to prevent flashovers; Drilling of wooden telephone poles to detect rot; Cleaning, and testing of circuit breakers; Inspecting and performing an oil analysis of substation transformers; to name a few.

There are similar costs for maintaining transmission lines and power transformers.

Transmission lines, Substation, Pad Mounted Transformer and Pole Mounted Transformers. Photos by D. Dears

All of these costs are covered by the rate the utility charges its customers, so customers ultimately pay for maintaining the transmission and distribution system.

But people who have installed PV rooftop solar systems don’t pay for maintaining the grid, because they don’t pay the utility for very much of their electricity. If they have installed a battery with their PV rooftop system, they may also not need electricity from the grid at night.

But, they have access to the grid for when the sun doesn’t shine or for whenever their PV rooftop system isn’t working.

Some could say they are freeloading on all the other customers who are paying for maintaining the grid.

TVA recently announced a grid access fee where people with low usage of electricity, such as those with PV rooftop solar installations, will pay more for the electricity they use. 

AGW environmentalists are objecting to the grid access fee, claiming, probably correctly, that the fee may slow down the adoption of PV rooftop solar installations and adoption of any similar distributed generation approach, such as combined heat and power (CHP).

As PV solar installations increase, it would seem only fair that everyone pays for the maintenance of the transmission and distribution system and a grid access fee is one way to do this.

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8 Replies to “Validity of Grid Access Fees”

    • Thanks for the additional information. With rates that are 30% lower than PG&E I can see why you would prefer SMUD’s.

      • Donn,

        I wish our costs for electricity in the winter from PG&E were only 35% more than SMUD. Our Winter TOU energy charges from PG&E are-

        Baseline over baseline
        Part-Peak $0.20035 $0.28616
        Off-Peak $0.18352 $0.26933

        Which is well over 100% more than SMUD’s energy charges. PG&E baseline quantities are set at 53% of average usage; hence everyone is paying marginally 27 or 29 cents/kwh if they have PG&E when it could be as low as 9.7 cents with SMUD.

        It’s one thing if we had natural gas, like most SMUD customers do, to meet our HVAC needs in the winter. It’s another when our choice is propane, kerosene or wood.

        There is kind of an incentive to heat with anything but electrical energy if you are a PG&E customer.

        I wonder why SMUD decided to allocated their costs so differently than PG&E……

        https://www.smud.org/en/Rate-Information/Time-of-Day-Rates/Time-of-Day-5-8pm-Rate

        • Thanks for the additional, more detailed information. It’s a lot more than the 30% I casually suggested. It’s an interesting question as to why SMUD allocates costs differently.

  1. On Tuesday 5/15/18 my town (Oxford CT) was devastated by an EF1 tornado, that lasted all of 5 minutes. It looked like a “war zone” over much of the town; fallen trees wiped out the grid. It was very difficult to get gas for my generator, I needed to go to the next town for it. My point? Eversource brought in multiple crews from adjoining states to help them rebuild the grid. The vast majority of town had power within 96 hours. Yes we pay a lot for the service, but society goes downhill quickly without it. Rooftop PV would not work without the grid acting as a reservoir; battery backup would have doubled the cost of the PV. It is not economical at this location.

    • Again, thanks for your comment. I was in Australia last year right after the blackouts in South Australia which highlighted the problem Australia is having with wind and solar.

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