JUICE: MetroWatt

13 Feb 2018

I’m in the enviable position of driving below 4,000 miles a year. My weekday commute is a staircase. My car use is further limited because of my transportation options, including bike, BART and Capitol Corridor train service.

The hike in my recent auto insurance bill motivated me to switch to insurance with comparable coverage with the cost based largely on vehicle miles traveled.

I’m guardedly optimistic that my annual insurance cost will be at least a third less than that of my previous policy.

The amount I pay Metromile includes a monthly base rate of $41 plus a 6.5 cents a mile charge, which is calculated by a plug-in device that tracks my mileage. There was no sign up fee for the six-month service, nor is there a charge for early cancellation. I paid an upfront deposit equaling two months of my base rate charge, which is based on a variety of factors, including zip code, driving record, type of car and age. The first two months of my base rate charge is deducted from that deposit.

Metromile is the optimal plan for me because it rewards low mileage drivers.

The ease of it makes me wonder why there isn’t an electricity service version of Metromile for low energy consumers.

Metrowatt could include a base rate based on zip code, demand—daily and monthly— with a kWh usage fee. The fee could be offset by rooftop solar and energy storage charging the home or grid.

Admittedly, the world of regulated utility monopolies is more complicated than that of the transportation sector. For instance, there are public purpose fees, but also convoluted costs tangled up in state regulatory-decision making, from the massive private utility general rate case decisions to convoluted energy efficiency proceedings.

California’s utility bill process can and should be far simpler and more transparent.

Utilities can’t argue about infeasibility of a Metrowatt-type system because of the number of disparate meters. There were more that 35 million cars and trucks registered in California as of 2016.

Furthermore, there are Metrowatt like offerings in Texas and New York.

Customers in these two states get to choose from a large list of retail plans. They select the power provider, fixed or variable rates and whether they want renewables. Some have cancellation fees, others don’t. Not included in the bill estimates are taxes and charges under local, state and federal orders and laws.

For example, Infuse Energy offers Houstonians a 6-month plan with an average monthly charge of 8 cents/kWh for up to 500kWh. The price drops to 5 cents/kWh for 1,000 kWh or more and to 4 cents kWh for 2,000 kWh a month. The electricity is 100 percent renewable, with 16.5 percent from in-state alternative energy projects.

New York has similar offerings. One of the plans offered to Brooklynites, for example, is from Green Mountain, which served in California post deregulation and pre-crisis. Customers can sign up for three months for 100 percent wind power at 9 cents a kWh assuming 2,000 kWh of usage a month. And the list goes on.

The known drawback is overload. Depending on their zip code, ratepayers in Texas and New York have hundreds of plans to choose from. Assuming most people are like me, we don’t want to choose from more than a handful of utility rate plans.

However, the flip side is that each customer has a good chance of finding a plan that has the potential to lower the monthly utility bill.

The unknown with a Metrowatt system is what happens if retail service providers go belly up, a la the 2000-01 crisis.

It’s interesting to note that the law allowing the creation of community aggregation came out of the crisis ashes in 2002, ostensibly to offer choice and accountability.

If the market is opened to retail choice, customer protections-the lack of which was the undoing of the 1996 deregulation scheme-must be included. In addition, Metrowatt should be only one of the items on a power menu, not the only one.

For some, utility bills are just about the bottom line. Others, however, may prefer the known and feel secure remaining with their current provider, be it a private utility, muni or community energy.

California has the tools to shape the market and shift power supply and demand.  A revamped utility world should include a focus on meeting the state’s professed loading order, with efficiency at top of the resource list, followed by renewables and demand response.

The Golden State also has models to follow and knows how to expand the electricity market to meet our peculiar California needs and green goals.

Elizabeth McCarthy

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