Time-of-Use Rate Impact on Solar Installations

摘要

The Inland Empire Utilities Agency (IEUA or Agency), located in the western region of San Bernardino County, California, operates five facilities specializing in regional wastewater and recycled water services and one composting facility. In 2008, IEUA implemented an energy management program with the goal of relative independence from a California power grid system struggling to meet customer demand during peak periods. The product of this initiative is a diverse portfolio that includes approximately 7 MW of renewable energy procured within the cost constraints that accompany essential service providers looking to maintain low rates for their consumers. These installations were made possible through Power Purchase Agreements (PPAs) reached with various providers, eliminating capital and maintenance costs while creating a more sustainable energy portfolio for the Agency. Out of the 7 MW of renewable energy across the Agency, approximately 3.5 MW is generated from solar installations. These PPAs benefit the Agency by allowing for sustainability without expensive capital outlays and providing known power costs over a 20-year period, structured with low fixed escalation rates. However, the inherent risk in entering a PPA is the agreement's comparison to future rate projections of the local utility. Recently, California's Investor-Owned Utilities (IOUs) implemented mandatory Time-of-Use (TOU) rates for all commercial customers. Since the Agency has been receiving service under TOU schedule for several years, this study investigates the savings potential for facilities that are subject to TOU rates and utilize solar energy systems. The purpose of this paper is to show that there is an opportunity for wastewater treatment plants and other industries to take advantage of the current shifts in policy and economic changes that the local IOU has enacted, by installing renewable projects that can have both long and short term economic gains. This study also investigates the impact that electricity purchasing mechanisms have on the avoided cost savings. By estimating equivalent TOU costs of electricity generated by the solar systems, IEUA estimates the savings potential of both Direct Access and bundled customers. This study has identified that TOU pricing offers greater savings for bundled customers with specific load profiles and on-site solar generation. The main limitation of this study was that electricity data was evaluated on an hourly basis. The electrical utility assesses demand charges on 15-minute intervals, which means the charges will differ slightly from this study. However, calculated usage and costs using the hourly data were within 5 percent of actual data, so the difference between 15-minute and hourly interval data was considered negligible.