Looming Rate Increases Makes Distributed Energy Storage An Even Smarter Investment

Looming Rate Increases Makes Distributed Energy Storage An Even Smarter Investment

 

Customers of San Diego Gas & Electric (SDG&E) received a jolt earlier this year, one that gives them more reason than ever to make investments in local alternative “green” energy resources – smart energy management and energy storage solutions as well as solar photovoltaic (PV) systems.

 

While rates will rise for residential customers, the heaviest users of electricity – industrial and commercial SDG&E customers – will be hit the hardest. According to one estimate, an SDG&E customer who has been paying $850 per month will see their utility bill increase to as much as $1,180, a 40 percent rise.

 

Part and parcel of re-jiggering its rate schedule, SDG&E will include October as a summer rather than a winter month. SDG&E’s summer-month rates are higher than those for winter.

 

Energy storage and a more reliable, resilient and cost-effective grid

 

The early retirement of the San Onofre nuclear power plant in Southern California, along with the closing of older natural gas-fired power plants, means SDG&E, Southern California Edison and Pacific Gas & Electric (PG&E) need to procure new capacity, as well as other means of assuring the reliability and resiliency, as well as affordability, of grid power. Though the actual amount of electricity supply SDG&E and California’s other two investor-owned utilities will need to replace over the course of the next two decades is a topic of debate, the costs are being and will be passed on to consumers.

 

In addition to replacing some or all of their lost grid-power generation capacity, SDG&E, SCE and PG&E need to comply with and California’s renewable energy and energy storage mandates, federal Clean Air Act (CAA) standards and the EPA’s proposed Clean Power Plan.

 

In their bid to cover all the bases, California’s investor-owned utilities are stepping up efforts to invest in and draw on a more diversified mix of renewable and clean energy power grid assets – intelligent energy storage and demand response systems as well as local renewable energy generation capacity in the form of solar PV, wind, energy-from-waste (EfW) and marine power systems.

 

A growing role for intelligent energy storage

 

As SCE demonstrated in awarding 2.221 gigawatts (GW) of local procurement capacity for the Western Los Angeles Basin a couple of weeks ago, intelligent energy storage solutions – distributed on both the utility and customer sides of the power grid – will play a significant and growing role in California’s green energy transition.

 

Setting a precedent that will ripple across California and the U.S. power sector, SCE awarded contracts for private-sector companies to deploy over 250 megawatts (MW) of intelligent energy storage systems “behind-the-meter” at SCE customer sites.

 

In a bid to prepare its customers for its coming rate increases, SDG&E is reaching out to the public via its website. This includes an explanation of why it is raising electricity rates, how various categories of businesses will be affected, and steps they can take to soften their impact.

 

As SDG&E explains, “If your business is currently on the “A” or “PA” rate, you can reduce its electricity use during high demand (on-peak) hours, you can save by taking advantage of low off-peak prices.”

 

This is exactly what Green Charge Networks’ GreenStation offers, and your business can capitalize on this opportunity with zero in the way of up-front capital costs. With a Green Charge Power Efficiency Agreement (PEASM), we will install, operate and maintain your GreenStation platform with zero money down. From there on out, your business will be able to realize savings on monthly electricity bills by intelligently storing energy when daily and seasonal rates are low and using it when they are high.

 

In addition, businesses that decide to install energy storage capacity on-site can qualify for Self-Generation Incentive Program (SGIP) credits.

 

Utility peak-power demand charges for businesses have been rising 7 percent in California over recent years, in some cases accounting for as much as 50 percent of monthly utility expenses. With SDG&E’s rate increases looming, installing an intelligent energy storage system makes more sense than ever.