Green Mountain Power and Nevada Energy: Two different paths to the future

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This topic contains 2 replies, has 2 voices, and was last updated by Dean Moretton Dean 1 year, 8 months ago.

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  • #8560
    Dean Moretton

    By Ed Marston and Dean Moretton

    In the good old days, utilities could take their customers for granted. In fact, they often didn’t call them “customers.” They called them “meters.” They treated those “meters” well, but certainly did not worry that they would walk away from our expensive system. Utility executives didn’t expect to go to the office Monday morning and find a bunch of service requests saying: “Please come to 2734 Linden Street and pull out my meter.”

    Such requests are still very rare. But they are not unthinkable. A mix of efficient lights and appliances, better insulated homes, solar panels and now the latest game changer – Telsa wall-hung batteries – make it possible to foresee a growing number of disconnects in the future. Even without pulled meters, our industry is being gradually hollowed out as the old 7 percent annual growth rate, and the more recent 3 percent growth rate, are instead dropping close to zero in many markets.

    The most recent, spectacular utility industry reaction to this trend came in Nevada, where the Public Utilities Commission raised the connect rate for net metered customers from $12.75/month to $17.90/month this year, rising to $38.51/month. This rate is not just for new customers, but includes the almost 17,000 or so customers that are already net-metered in that very sunny state. In reaction, Solar City laid off 550 Nevada employees and various interests announced petition drives to put roll back the new net-metered-rate.

    Meantime, another energy source may be feeling heat from the sun. In Weld County, Colorado, a farming region with 18,000 oil and gas wells and large tax income from this industry, the board of county commissioners is considering banning solar farms on the 75 percent of the county that is zoned for agriculture. The reason, the commission says, is to protect farming. Colorado is a “right to farm” state. But oil and gas wells have free run of the county’s farm land, and the commission does not intend to change that.

    From one angle, the Nevada and Colorado developments are good news for the solar industry. It means that the utility and fossil fuel industries no longer see solar energy as a toy that well-to-do suburbanites can put on their roof as a status symbol. Instead, the toy has become a threat to their industries.

    But not all utilities are fighting solar, and thereby enraging part of their customer base. In Vermont, Green Mountain Power has created a three-option program to supply its customers with Tesla Powerwall Batteries. In option one, consumers can buy the batteries outright to use as backup power. At $6,501 for 7 kW-hrs of backup energy, they are pricey. But if someone in your home needs medical oxygen around the clock, if you run a business that can’t afford to lose its computers, or if you have some other special need, then $6,501 may look cheap.

    Under the other two options, GMP gets to share in the use of the wall batteries to moderate GMP load so that it saves money on demand and transmission charges. Some of its savings are returned to the battery owner or lessor.

    The GMP project is modest: It plans to sell or lease only 500 batteries. But the point is that GMP is working with its customers. If a customer also plans to install solar panels, the cost of the battery will be reduced by the newly renewed 30 percent federal investment tax credit. GMP is sending a signal to its customers that it wants to meet the future in cooperation with its customers. It doesn’t want to lose those customers to the triad of efficiency, solar and batteries.

    Meanwhile, Nevada Energy, which convinced its Public Utilities Commission to allow NVE to claw back previous rate incentives, has roused a political storm and great hostility among those who have solar panels or who looked forward to installing solar panels.

    In case your electric co-op is interested in learning exactly how GMP’s program works financially, a detailed explination can be found here. GMP is a privately held utility, and its Tesla battery program will produce a healthy profit. A co-op would approach the program from a different perspective.

    But we should be grateful to GMP for providing a model we can leverage to suit our needs and values.

  • #8563
    Dave Munk
    Dave Munk

    You hit the nail on the head, Dean! Co-ops, like all types of utilities, are waking up to the fact that they can no longer take their membership for granted. While we are not subject to the same pressures of retail competition, the defection potential is starting to rise. As our Investor Owned Utility friends (and their PUCs) experience the transition from a commodity vendor model to more of a customer-centered business model, co-op member owners will start to ask for the same sorts of services and options from their rural systems.

    Your addition of the new business opportunity through leasing is an extra bonus feature. This not only represents a new revenue opportunity in the face of flat consumer growth and electricity sales, but also offers an opt-in member service to help reinforce the value provided by co-op membership.

    We are entering an exciting and dynamic time for co-ops and all utiltiies. Stay tuned, and stay involved! Soon there will be stories to share from the co-op world.

  • #12392
    Dean Moretton

    This past week, Green Mountain Power announced a deal with Freedom Nissan in Burlington, VT for $10,000 off list price of a 2017 Nissan Leaf electric car.

    Green Mountain Power also announced in May an additional 2,000 Tesla Powerwall-2 available for $15/month, down from their 2016 introductory $31.76/month rate.

    This type of promotion is a solid example of promoting beneficial electrification by the electric company: reducing need of peaker plants and expensive generation via battery storage use and promoting electric vehicle adoption, reducing carbon emissions.

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