At the public hearing the other night, something came up on the interconnection standard that I hadn't given proper notice to on my reading of the recommendation CWLP published: that CWLP's rate structure is skewed. CWLP has fixed costs (like the transmission system) and variable costs (like the coal that they burn to produce electricity). On the other side, CWLP has fixed prices (which I think shows up on my bill as a $3.50 per month "Electric Monthly Customer Charge") and variable prices (the per-kWh energy charge and fuel adjustment).
According to the recommendation, and what we were hearing from staff during the hearing, CWLP's prices don't align well with their costs. That is, they skimp on their fixed prices, and cover their fixed costs through the variable pricing. What this means is that if people respond to high variable prices by reducing their electricity consumption (or by installing their own generation capacity), CWLP won't pull in enough money to cover their fixed costs (administration, transmission and distribution, the power plants and maintenance thereof, etc.).
My first inclination was to ask if staff had considered restructuring CWLP's rates, to better align fixed costs with fixed prices. (To which staff said, no, that was a much bigger and volatile issue than they were tasked to deal with.) As I write this, though, I'm having second thoughts. From a conservation point of view, CWLP's current rates are useful, up to a point, because they increase the incentives for conservation--you can't insulate your way out of a fixed charge.
The concern of all of this is that with the current rate structure, CWLP has an incentive to limit development of small-scale generators, since it warps their revenue and ability to maintain the infrastructure that everyone needs.
Imagine a net-metering homeowner who puts solar panels up on her roof, and does a perfect job of aligning her solar capacity with her energy needs. Over the course of a year, the electricity she buys from CWLP exactly balances the electricity she sells to CWLP, so her energy charge is zero, and she only pays the $3.50 monthly charge. She still relies on CWLP's fixed infrastructure, even though she doesn't pay for it. To CWLP, this is a bad thing. To anyone interested in distributed generation, this is awesome, if slightly flawed.
Perhaps the solution is a revised fixed rate for just net metering and interconnected customers. Maybe the solution is, indeed, revising all of CWLP's rates. Or maybe, for the near future at least, we can have everything: maybe the way that these customers will redistribute their load away from peak demand, allowing CWLP to sell more to the grid at that high price, will enable CWLP to cover those customers' fixed costs.
Unfortunately, this is something that doesn't, I think, lend itself very well to public review. Here, you need to be able to trust staff to vigorously investigate these alternatives. And, from our perspective, that means trusting them to imagine a CWLP that takes the soft energy path. What we can do, though, is impress upon them, and city council, the importance and usefulness of that path.