July 15, 2017
By John Di Stasio, President, Large Public Power Council
Public utilities provide power to millions of Americans.
What sets public power, like the locally owned Imperial Irrigation District (IID), apart from others is that these utilities do not have private investors or shareholders. This allows them to focus directly on serving the interests and needs of customers. As a not-for-profit, all financial returns are reinvested into the grid instead of paying for things like share buybacks or dividends. As a result, customers benefit from lower than average rates and a more stable infrastructure, which translates to energy that is both affordable and reliable.
As solar power continues to grow in California and across the nation, investing in and embracing cleaner energy is an important component of delivering these widespread benefits to customers. But to do so effectively, it is important to ensure the right programs and resources are in place. Public utilities like IID are investing in technologies and resources to tap into this energy source to meet increased consumer demand. In fact, at the Large Public Power Council (LPPC), our members (which include IID) are constantly looking to optimize all available resources to provide customers with clean energy at a low cost.
Access to diverse fuel sources like solar energy is essential to balancing overall costs and demand. And in most cases, solar makes up a sizable piece of a diverse energy mix. As the former CEO of Sacramento Municipal Utility District (SMUD), I know firsthand how important solar has been in growing clean energy here in California and helping the state meet its renewable energy goals. In fact, back in 2010, SMUD became California’s first large utility to meet the state’s goal of having more than 20 percent of renewables in its energy mix. SMUD currently generates half of its energy from non-carbon sources.
Taking into account the changing energy landscape and new demands, utilities often reevaluate their pricing structures and programs to make sure the needs of all customers are being fairly met. IID did this recently when it implemented its new Net Billing program last year. This was an important change made to help sustain solar for customers in the region over the long term.
IID’s Net Billing program was created to help strike a fairer balance between the rates both solar customers and non-solar customers are paying, which still preserve the viability of this energy source. The goal is to make sure there is not undue financial burden placed on customers who don’t have rooftop solar panels.
This is not only a matter of creating fairer pricing around energy usage, but also extends to costs associated with maintaining and modernizing the grid. Utilities need to invest regularly in upgrading infrastructure so it is always ready to meet the energy demands of all customers within a given service territory.
If rate policies are not structured properly, these grid costs are disproportionately passed along to non-solar customers. While solar customers sometimes use less energy overall from the grid, they still rely on the existing infrastructure to access energy during peak energy times like evenings when demand increases, but the sun begins to wane. In turn, utilities must have the proper resources in place that can ramp up to meet peak demand. To maintain affordability, it’s necessary to have these costs spread evenly between all customers.
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