Re: Wholesale vs retail electricity cost?
- From: "daestrom" <daestrom@xxxxxxxxxxxxxxxxxxxxxxxx>
- Date: Fri, 14 Apr 2006 14:40:28 GMT
"BobG" <bobgardner@xxxxxxx> wrote in message news:1144941221.724401.204640@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
The Orlando Utilities Commision posts its tarriffs on their web site. I
see the big customers get wholesale contracts as low as $.04 per KWH.
Retail is about $.12 per KWH. 300% difference! No wonder they dont want
to buy back enduser PV at retail! So the solution is tighten up the
spread to compare with other commodity wholsale pricing. Either raise
the wholesale rate to the big customers, or lower the retail rate (this
will never happen). This would let them buy back at a closer cost to
production. Obviously, they can produce the electricity they are
selling at $.04 for less than that. Can anyone justify why the
wholesale rate should be so much less? All the electricity in the wire
is the same. Is the cost of the retail infrastructure 300% of the cost
of the wholesale infrastructure? Substations, transformers etc?
I don't know if FL is 'deregulated', but the cost of delivering electricity to your meter has two components. The cost of the product and the cost of delivery. You're right that the cost of the product is lower than $0.04/kwh. But who pays for and maintains all the individual lines, poles, substations transformers, service drops, and meters? Well, you do of course. That is the delivery charge. Now, a large industrial customer has a nearly dedicated supply line from a major substation. That's one line, one transformer bank. Yes, there is some cost in that to be sure. But no where near the costs of running from that substation to your home.
Here in NY, we are 'deregulated' so the utility isn't allowed to own generation. So the utility buys 'product' in bulk from a large number of suppliers and bills for a 'supply charge'. But customers can arrange to buy directly from a supplier and have the utility deliver so we don't have to pay the utility their 'supply charge'. But we still have to pay the utility the 'delivery' charge. Here in NY, it ends up about a 50/50 split. Between $0.06 and $0.07 /kwh for the 'supply charge', and another $0.08/kwh for the utility's 'delivery charge'.
So when selling back home-brew power to the utility, they would *prefer* to only pay what it would have cost to buy the electricity from any other supplier (slightly below wholesale), not the final cost of delivered electricity (retail rate). In NY, legislation was passed mandating that home-brew electricity generated by photovoltaic be bought back at retail rates, but other sources do not have to be bought by the utility at 'retail rates'.
daestrom
.
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