Rate change public comments

Comments on the proposed rates for 2022-2023 can be submitted by emailing ContactUs@smud.org or by mailing written comments to:
SMUD
P.O. Box 15830, MS A451
Sacramento, CA 95852-0830

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Comments


July 12 - Kevin M.

Hello,

It is unfair for someone to make a large investment into clean solar power with the intent of saving money monthly and then SMUD changes their rates to pay them pennies on the dollar for excess power. It makes no sense to invest in solar in the first place if you don't save money to make up for the investment. I think you would need to basically provide the battery system if you want to put this burden onto your customers instead of letting the "excess net energy" flow to your local neighbors. Even then, is it "clean" for the environment if everyone is now buying these batteries and replacing them every so often? Why not just keep the rate structure (and infrastructure without using batteries) in place as it is? 

I recently purchased a home about a year ago and one of the selling points was that it had solar panels installed. We would be able to get by, providing that SMUD would use net metering and allow us to "store" our kWh's for later when we would need them. The proposal of us sending our excess power now and only getting your wholesale rate doesn't help. As part of the home purchase, we paid for the entire solar system (without any tax breaks). It seems SMUD is now trying to make up for those who invested in solar panels to provide SMUD their excess power at pennies on the dollar since they aren't billing them as much electricity as non-solar customers.

Thanks for your time 


July 10 - Steve U.

Questions for the Proposed 2022-2023 rate changes in the rate proposal in the 2021 GM Report

Question on Renewable energy credits (RECs) ownership.

Who has title to the certificates for NEM1 and SSR renewable generation issued for a generating units registered with WREGIS?

WREGIS is not intended to establish legal title to Certificates but instead to accurately track who is registered as possessing Certificates. Persons must address any issues regarding ownership or security interests in the Certificates outside of WREGIS. See https://urldefense.proofpoint.com/v2/url?u=https-3A__www.wecc.org_Administrative_WREGIS&d=DwICaQ&c=Ko5vnWWlemq1VcwTIpbf0g&r=zlBlDs7W0TQsFjIvtOFbMTEYl0JaLagCasWjK-9meZU&m=65QFjN07XjazbKyb4L4yIU7y88Ex08MgsP3pDSAVrhc&s=ovR_bE2t4EnJwpjN8ZDTYaimcJQAZJrwd7-MUtz2AC4&e=  Terms of Use.pdf item 7.

Does SMUD intend to strip off the RECs from NEM1 and SSR customer generation and sell the RECs or use the RECs in calculating procurement requirements for the California Renewables Portfolio Standard (RPS)?

SMUD recommended back in 2007, that the utility be required to purchase the RECs associated with the renewable generating unit. See https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.cpuc.ca.gov_word-5Fpdf_FINAL-5FDECISION_64072.pdf&d=DwICaQ&c=Ko5vnWWlemq1VcwTIpbf0g&r=zlBlDs7W0TQsFjIvtOFbMTEYl0JaLagCasWjK-9meZU&m=65QFjN07XjazbKyb4L4yIU7y88Ex08MgsP3pDSAVrhc&s=Go05Uczkah5L6UY1PK9Ni99lCY1yJxZ3ZTyYrwP0F7k&e=  foot note 186.

Does the SSR Export Compensation Rate effective January 1, 2022 of $0.0740 per kWh include the value of the RECs?

Steve U.


July 8 - Rick C.

These comments summarize the main points we made on behalf of 350 Sacramento and Vote Solar during the May preview of the proposed Solar and Solar + Storage rates.

We are gratified that SMUD has abandoned its original plan to charge rooftop solar customers a set Grid Access Fee (GAF) based on the size of the photovoltaic (PV) panels.  Instead, the proposed rate  allows solar owners to retain generation credits for on-site use at the currently available rate.  It then offers a lower buyback price for excess generation sold into SMUD’s grid.  This is an excellent compromise solution. It eliminates the highly regressive GAF which placed a fixed cost on total output. And it acknowledges that a customer’s home use of solar should be off-limits to SMUD revenue capture – a huge concession.

On balance, we believe the 7.4 cents/kWh fixed price for purchase of excess generation appears reasonable, crediting back savings from carbon reduction from SMUD’s thermal plants and the avoided costs of storage batteries.  And because SMUD leaves solar use within the home untouched, the blended savings comes to more than 10 cent/kWh.  The bifurcation of savings between home use and export creates strong arbitrage opportunities to downsize solar installations to optimize output for on-site use and to further encourage appliance electrification, electric vehicle charging and battery storage.

Solar + Storage

We agree with SMUD’s emphasis on the added value of storage to existing and future solar rooftop installations.  And we applaud the introduction of the Critical Peak Pricing rate as an important component of SMUD’s Virtual Power Plant for battery, electric vehicle, and appliance discharge.   However, we feel that SMUD’s goal for battery installs is too limiting and that SMUD should aim for a 50% capture rate or 50,000 battery installations by 2030.

Virtual Net Metering (VNEM)

For the first time, the SMUD Rate Report proposed VNEM for affordable multi-family housing projects.  This is a long overdue program that is already in place at other California utilities. We see no reason why VNEM cannot be extended to all new multi-family construction including condominiums and apartment houses. It should also be available for true Community Solar projects where non-profits can allocate PV production to low-income renters.  Having this option will encourage solar and battery storage at these new distributive power plants. Because VNEM is a program and not a rate, the GM Report provides no details.  We encourage SMUD Board to direct staff to expand VNEM as noted, and to release public details of this program by this Fall.

Rick C.


June 30 - Mike C.

thank u for ur consideration. however, as u may be proud of your industry 'standing' of rates, u might want to ALSO be concerned about the rate for poorer customers, ESPECIALLY SENIORS. ur programs have to go much deeper for us. 
then u say: "The need for the modest rate increases is due to several factors..." WHAT IS MODEST ABOUT A 34% RAISE IN 2 YEARS? what a joke. again it may be modest for the industry, which i cannot accept. and i have showed u what our increases are for Social Security. NOW THAT'S MODEST!
try to have a little compassion instead of parroting the same old press points. i don't buy the fake news on TV nor do buy your explanation of y u cannot help poorer people. no wonder there r so many homeless. 
try again eh T and team?
mikeC


June 30 - Anonymous

I am strongly opposed to this proposal of rate increases for 2022-2023. These increases would be a hardship on my family.


June 29 - Debi & Gary N

We just got word that rates are going to be increased so I'm writing to you with hopes that rates won't be increased. EVERYTHING else is going up except wages and adding another increase will cause hardships beyond what we can afford. Please reconsider raising the rates at this time allowing us to catch up with our finances after the last 18 months dealing with Covid!!

Thank you,
Debi & Gary N.


June 29 - Anonymous

Please DO NOT increase our rates again. We are struggling as is to keep up with the price increases everywhere. This is not ok and we don’t qualify for any low income help. We can’t afford an increase from this company too. Where is the sensitivity for all during these times.


June 29 - Mark G.

June 29, 2021

Hello SMUD,

This message contains my first set of comments and questions on the 2021 rate action.  I will appreciate your response at your earliest convenience. 

Mark G.

#1 The CEO and GM Report says, "The cost-of-service analysis that demonstrates cost-justification for the proposed rates is the SMUD Rate Costing Study ('2020 Rate Study') which is incorporated herein by this reference."  (Volume 1, page 92)

That study is dated March 31, 2020, which is less than one month after the start of the pandemic. The pandemic turned the California economy, the Sacramento economy, the U.S. economy and the world economy upside down. It introduced many changes.

SMUD’s financial results for 2020 were tens of millions of dollars ahead of its projections, which called for significant increases in net position. Apparently SMUD benefitted from the changes that the pandemic brought. For example at one point in 2020 SMUD announced that it had saved $40 million due to its employees working from home.
The question is, does EE plan to produce a new Rate Study?

#2 Will the new rate study, if any, state SMUD’s assumptions about the pandemic for 2022 and 2023 and its effect on the Sacramento economy and its expectations for its financial performance for 2022 and 2023?

#3 The 2020 Rate Study says, “The Sacramento Municipal Utility District’s (SMUD) proposed rate structure as defined by the Chief Executive Officer & General Manager’s Report and Recommendation on Rates and Services is influenced by SMUD’s Marginal Cost.”

What else, besides SMUD’s Marginal Cost, influences the proposed rate structure?

#4 How or in what ways do the other factors besides SMUD’s Marginal Cost influence the proposed rate structure? Please elaborate and quantify.

#5 The previous rate design study, called the “2018 Residential Time-of-Use Rate (RT02) Design Study”, contained a series of tables (Tables L, M, N and O) on pages 14 and 15 that presented the marginal cost of each of the components of SMUD’s cost of service and how SMUD got from those numbers to the proposed rates for 2018 and 2019. The 2020 Rate Study does not contain such tables. Is this omission intentional?

#6 Will SMUD show its marginal cost and other data for the proposed rates in tables that are similar to Tables L, M, N and O from the 2018 Residential Time-of-Use Rate (RT02) Design Study?

#7 Assuming the Board approves the proposed rate increases what will be SMUD’s projected increase in net position in 2022 and 2023?

#8 The CEO and GM Report says, “Increased operating costs, including materials and labor - due to the COVID-19 pandemic, and
the impacts it has had to global supply chains, we are starting to see higher material costs for
many materials we use every day. While we believe some of the more drastic price increases are
temporary, there is general inflationary pressure on goods and services that will likely be
sustained.” Yet in 2020 SMUD said that it had saved $40 million in labor costs due to many of its employees working from home. How can you explain this? How can you reconcile these two statements? How can you explain this statement in the CEO and GM Report in light of the $40 million savings in 2020 on labor costs?

#9 Assuming the Board approves the proposed rate increases what will be SMUD’s total revenue from sale of electricity in 2022 and 2023?

#10 The table in the CEO and GM Report, page 64, presents the “Detail of Rate Changes, Years 2022 and 2023 include proposed rate increases.”

Are the proposed rates in this table simply the result of adding 1.5% and then 2.0% for the years 2022 and 2023, respectively, to the current rates?

#11 Are the proposed rates based on SMUD’s predetermined budgets for 2022 and 2023?

#12 The 2018 Residential Time-of-Use Rate (RT02) Design Study used a “scalar” of 9.2%, which SMUD added to the total energy marginal cost to reach the 2017 energy charges. (Table M, page 14) SMUD’s explanation at the time was, “The proposed time-of-use energy rate is completed by setting proposed rate revenues equal to rate revenues for the budget year. The reconciliation of marginal costs to rate revenues is accomplished through increasing final marginal cost energy charges by a scalar of 9.2%.”

Table N added in another scalar of 0.35%. It has been said that the use of the 9.2% scalar is not allowed by the California Constitution, Article XIII C, because such use causes the then proposed rates to exceed SMUD’s reasonable cost of providing electricity service. The question is has SMUD backed this 9.2% scalar out of the proposed rates?

#13 Is the 9.2% scalar that SMUD added to its rates in the 2018 Residential Time-of-Use Rate (RT02) Design Study baked into or still included in the current rates?

#14 SMUD has apparently made a mistake in its calculation of the off peak summer rate for 2023. Assuming SMUD intends to raise rates as of January 1, 2023 by 2.0%, which is what the CEO and GM Report says on page 38, the rate should be $0.1349. SMUD shows $0.1350. Although the difference is a fraction of a penny it will add up to millions of dollars because SMUD has so many residential customers and this is 8 months out of the year. $0.1350 is not the correct figure because if you add 2% to the 2022 rate of $0.1323, proposed for March 1, 2022, and carry it out to six decimal points you get $0.134900. So SMUD cannot round up from there to $0.1350. SMUD needs to either change the proposed rate for this time period to the correct figure, $0.1349, or write a new paragraph into the rate resolution saying that for the off peak summer rate for 2023 SMUD is raising its rates slightly more than 2% but for all other time periods for 2023 it is raising them 2%, and mention this in all the customer meetings and the two workshops and the rate hearing. Please reply to this. If you believe your calculation is correct and I have made an error in my calculation please clarify and show your calculation.

#15 SMUD has made a similar mathematical error in the SIFC proposed for March 1, 2022. The current SIFC is $22.25 per month. It will be $22.70 as of October 1, 2021. Adding 1.5% to that gives $23.0405. SMUD shows $23.05 in the table on page 64 of the CEO and GM Report. SMUD cannot round up from $23.0405 to $23.05. Mathematical practice is to round up to the nearest decimal point only when the decimal point after that is 5 or greater, and to not round up when that number is 0 to 4, inclusive. Here the decimal point is 0 (the 2nd 0 in $23.0405) and so you cannot round up. It’s literally one penny per customer per month. SMUD has approximately 600,000 residential customers (see question #16) and that equates to an unnecessarily high SIFC of $6,000 per month.

Again the solution is to either change the proposed rate for this time period to the correct figure, $23.04, or write a new paragraph into the rate resolution saying that for the SIFC for 2022 SMUD is raising its rates slightly more than 2% but for all of the rates per kWh for 2022 it is raising them 2%, and mention this in all the customer meetings and the two workshops and the rate hearing. Please reply to this. If you believe your calculation is correct and I have made an error in my calculation please clarify and show your calculation.

Sent from my hard wired computer 


June 29 - Mike C.

dear mr j,

u may remember... or not, but we had some emails pass last year about rate hikes. well here's the actual "rate hikes" we seniors get (see attached). now compare that with what u (SMUD) did. and think about this also along the same lines, gasoline has gone up 50% in the last few years, food, clothing, etc. and now that the pandemic is over, everyone is talking about INFLATION.

can't smud do something more for seniors?

Please?

mikeC


June 26 - Ada

Hello.
I have reviewed your proposal for rate increases and the reasons.
Our bills are outrages as it is and as a customer, i feel that we are being taken advantage of.
Isn’t cleaner energy, etc a job for our govenor to address?
Why not send him the concerns and ask that this be a priority instead of reparations, etc.
Thanks.
Ada


June 26 - John

The structure of the "Key details" bullets on https://www.smud.org/en/Rate-Information/2022-2023-proposed-rate-changes/Solar-and-Storage-Rate-details is unclear, and the FAQ section mirrors this.
Bullet 1 deals with NEM 1.0 rate customers, fine.
Bullet 2 deals with solar + storage, fine.
Bullet 3 deals with SMUD excess buyback fine.
Bullet 4 deals with SMUD buyback of "this" excess electricity, which I can easily read in either of 2 completely different ways, even after assuming that "this" refers to " solar customers [with] excess power they do not use or store in their battery."The intended reading changes the interpretation drastically, based on, for example, whether bullet 3 refers to all solar customers, only solar + storage, and/or whether or not the customer is on the NEM 1.0 rate.
Reading 1: bullets 3 + 4 apply to all customers, one implication of which is that it would change the NEM 1.0 buyback rate from time of day to a flat rate lower than the lowest current ToD rate.
Reading 2: bullets 3 + 4 apply only to all customers not on the NEM 1.0 rate (i.e. new connections approved after the Proposal's effective date), so the proposal is only changing the economic assumptions of systems not yet approved for connection,solar with or without storage.
In principle there might be additional substantively different readings, but hopefully the example above demonstrates the ambiguity sufficiently. 

Best Regards, John


June 25 - Michael B.

Solar + storage looks interesting but ...

Traditional behind-the-meter storage (I've recently looked) more than doubles the cost of a solar energy system. That renders it uneconomic under current conditions. What kind of incentive is SMUD planning to address that? Without a substantial incentive, the storage is financially not feasible for existing small solar system owners; it's essentially the cost of installing a whole new solar system.

(Example: 3.8kw nameplate (real peak output is more like 3.5-3.6) solar producing, during early-mid summer, produces (gross) about 25-28 kwh/day. It cost about $13K a year ago. It produces 70-80% of my annual consumption (less with the EV, now), but the details are what's important. During summer, the mid-day peak output is usually surplus; so a traditional battery would be sized to capture all of that and deliver it during peak and evening mid-peak times - essentially, energy price arbitrage. A battery suitable for that (10-15 kwh) been quoted at more than $15K. IOW more than what the panels cost.)

Bottom line, absent some program that substantially reduces the cost of the batteries, both initial and continuing (panels last 20-25 years; batteries likely need expensive replacement about every 10) cost to individuals by mandating solar+storage means only 1) very rich people who are contributing to cleaning up the environment and don't care (much) about the cost, or 2) PPA companies that are maximizing solar output as commercial generators using rooftops, will be able to afford solar. Is that what you really want - to leave most rooftops clear of solar (where rooftops are already-built-on land that would have little environmental impact to develop for solar), while building more greenfield (or buying from commercial greenfield) solar projects that DO have significant environmental impacts? Ultimately, we need both, but distributing solar within the existing service area, where new transmission lines should not be required, seems like something to be encouraged, rather than being discouraged by making it cost-prohibitive.

Some thoughts about (partially) mitigating the problem:

Substantial incentives for traditional behind-the-meter batteries would reduce the amount of locally-produced solar you must accept at mid-day, as well as power you must deliver during peak times. That may have grid operational advantages - smoothing out the duck curve. Basic battery incentives should at least represent the value of improving grid operations.

Will SMUD offer extra incentives for batteries that can provide grid stabilization services - i.e. connected to the grid in such a way that you can use a portion of the battery capacity for grid operating purposes? What kind of numbers are we talking about in terms of 1) extra cost for purchase and installation compared to a traditional behind-the-meter battery; 2) how much of the battery capacity might be used - IOW how much bigger does the battery have to be; and 3) pricing - how much would SMUD pay for the services?

I now have an EV, and have considered adding on to my existing solar system. Haven't done it yet, and the car so far hasn't hit my bill badly; and in most cases adding even a row of panels would cost as much as a whole new system (so saving that for a battery might be more cost-effective). Would that automatically trigger inclusion in the new rate?

Is the new feed-in rate in fact just for surplus power (in excess of what's used on-site), or are you still proposing to charge retail for all usage on the property and pay the wholesale rate for all solar produced (IOW eliminate net metering entirely)? It does sound like the latter is still where you are going, unless storage is added.

How does your proposal compare with what the PUC is considering for NEM 3? That needs to be disclosed.

As I noted in comments in previous years, an example of a place that actually encourages rooftop solar (with storage), and incentivizes it heavily, is South Australia. They frequently come close to (if not exceed, selling surplus power to neighboring grids) 100% renewable energy. Would be worth looking at their operation as a specific example in the analysis materials.

Michael B.
Folsom, CA


June 25 - Jamie

To Whom it May Concern:

I am writing in to strongly oppose the 2022 & 2023 rate increases from SMUD. Every year us customers are suffering from the ever increasing costs from SMUD and the rate increases that are also imposed every fiscal year. After the reeling effects that the COVID-19 pandemic has left on many families I personally feel that a rate increase in a time of when families are trying to get back ahead or caught up on back bills is in extremely poor judgment on SMUD's part. SMUD has already initiated the time of day rate which charges us customers the most during the Summer months to even just cook our dinner meals. Unless we eat before 5pm or after 8pm of course. Ever year SMUD "proposes" a rate increase it is always for the same reasons. Enough is enough! Stop passing these excuses onto the already suffering customer. Some that qualify for aid with other Utility companies but can't with SMUD because the qualifications are not the same/standard. I hope that the SMUD Board will finally listen to their customers pleas for NO rate increases! 


June 21 - Rick C.

Hi J,

Now that the GM Report on Rates is out, I couldn’t find a reference to Virtual Net Energy Metering in the NEM2 write-up.  My supposition is that VNEM is more likely a program than a separate rate, though I expect some administrative fees would have to be documented.  Can you let us know what the status of VNEM development is at SMUD right now?

Thanks,

Rick C.


June 18 - Mark G.

June 18, 2021
Ms. L,

Will you forward this message with its attached files to the Directors and key staff? 
Thank you.

Directors and key staff,
This message is about the current rate action, your proposed rates for 2022 and 2023, the current CEO and GM Report and Recommendation on Rates and Services that you voted on (agenda item 9) at the Board meeting last night, the hearing date that you voted on, and the key question, which is whether the proposed rates violate the limitation on local government taxes in Article XIII C of the California Constitution.  Such rates must be approved by the electorate, whether they are taxes or special taxes.  Your proposed rates and charges are special taxes as defined.  
SMUD imposed the special tax in June, 2017 when you first created the time of day rates.  You extended and increased them in 2019 and are planning to do that again this year. 

There is only one document, to date, that presents and quantifies SMUD’s reasonable costs of providing electricity service and the components thereof.  That document is “2018 Residential Time-of-Use Rate (RT02) Design Study,” a 16 page document, that provided the factual / evidentiary basis for the original time of day rates adopted in June, 2017.  This is the key document because it introduced the “scalar” of 9.2%.  (Tables L and M, page 14).  
The problem is that after carefully accounting for each Marginal Cost Component SMUD unconstitutionally added a “scalar” of 9.2% to set rate revenues equal to budget revenues.  In other words SMUD had a target for how much money it wanted to take in via residential
TOD rates and to reach that target it added 9.2% to its marginal cost.
You extended and increased the special tax in 2019 when you raised rates.  According to your CEO and GM Report and Exhibit to Agenda Item #9 you are planning to extend and increase them again this year.  This is unconstitutional. 

According to my calculations the 2020 rates approved in Resolution 19-06-13 are about 9.55% too high as of January 1, 2020, 9.83% too high as of October 1, 2020, 10.08% too high as of January 1, 2021, and 10.28% too high as of October 1, 2021. These figures are the result of applying the actual rate increases approved by the Board in Resolution 19-06-13 to the 2019 rates, assuming that the 2019 rates were 9.2% too high because of the “scalar” of 9.2% that SMUD added to its rates in the rate design study. 

I encourage you to become thoroughly familiar with this issue as soon as you can.  Ask me questions.  Please be genuinely interested in the truth of the issue.  Don't just look for a fast and easy way to disregard what I am saying.  It's a key issue and if your rates are unconstitutional they could be reversed.  That's what is at stake.  If there were ever an issue deserving of your attention and interest and curiosity and study this is it. 

Thank you in advance for reading this material, making a genuine effort to understand it, approaching it with an open mind and asking me and your staff specific questions including follow up questions when it doesn't appear they have really answered your question. 

Mark G.
Enclosures