Solar power is threatening the bottom line of PG&E and other California utilities.
It is why the South San Joaquin Irrigation District General Manager Jeff Shields believes the for-profit utility is embracing Assembly Bill 327.
The legislation, which is awaiting Gov. Jerry Brown’s signature, would eliminate the current four tiered electrical rate structure for customers and replace it with two rates. One would be subsidized for low-income users while the other would be charged for all other customers. That means non-subsidized users will pay the same per kilowatt hour regardless of how much electricity they use. Currently the more you use the more you pay. Assembly Bill 327 also will give utilities like PG&E the ability to ask the California Public Utilities Commission for flat rates of up to $10 a month to cover fixed grid costs.
“They will be able to charge that to all customers including those who generate all of their own power from solar panels,” Shields said.
Shields said it is the result of a rapid revolution underway in California with more people switching to solar. As a result, the revenue stream for PG&E and other utilities is starting to retract. This year one in five new homes built in California will have solar generation incorporated into their mortgage.
Shields said solar is the real deal. Not only have solar panel costs dropped 20 percent during the last year as installation costs plummeted but the real cost per kilowatt hour without subsidies has dropped more than 50 percent and are still falling. At the same time be noted “30 year-old billionaires in the Silicon Valley” are working on battery storage systems making it possible for most homes — and even businesses — to eventually disconnect from the grid.
“It’s a real game changer,” Shields said of the emerging battery strategy technology. “Acid-based batteries are so old school now.”
Shields during a talk before the Manteca Noon Rotary at Isadore’s referred to the new battery research as “disruptive technology.” As such, he said it stands a good chance of making the 100-year business model for power companies obsolete.
Samsung has already built a community outside of Tokyo that is completely independent of the power grid. Instead each home and business has solar panels and battery systems that not only generate power but store it for use later. A cloud-style control system monitors power use and generation of all buildings in the city. It shifts power to those that need it from homes and other buildings that have little or no need because either they are not at home or their peak use has dropped.
Shields and others see such micro-grids rapidly multiplying.
He noted it reduces power costs considerably because it eliminates the need to build major transmission lines that can cost $1 million per mile to put in place. On top of that, California guarantees PG&E and other utilities an 11.35 percent return on such investments including recovering financing costs. That helps drive the power of costs up for households.
Several California cities including Lancaster have already adopted policies to make them a “net zero” community. That means they are securing their own power from solar and often requiring or encouraging new buildings to be energy independent.
Shields noted there has been a rapid expansion of solar in Manteca from more than a dozen schools sites, the new transit station, retailers such as Target and Kohl’s, employers such as J&M Equipment, and numerous homes.
“You’re going n to see more and more as prices start making it make sense even without subsidies,” Shields said.
Shields added that it is SSJID’s plan to help accelerate the use of solar and other renewable energy to reduce the need to import power to Manteca, Ripon, and Escalon if and when they are allowed to acquire the PG&E system within their territory.
“It makes more sense for us to help put power sources on top of roof tops here than bringing expensive power in,” Shields said.
SSJID currently has 100 percent renewable electricity sources and is targeting at least a 15 percent reduction in retail electrical costs if they become the power provider for the South County.