Save Our Solar Tas. Org ‘s comments to the Regulators Final Report
The Office of the Regulator has released the “Final Report” after it came back from Minister O’Byrne’s office.
Very disappointingly it simply sets aside the core of instruction as put to them that “There can be no subsidy nor cross subsidy between Customers or Customer Classes”. Solar owners are clearly a “Customer Class” that both supplies feed-in and buys power.
The report briefly acknowledges the existence of “Avoided network costs” that the solar feed-in Customersdemonstrate by feeding in at very close and local proximity to the end user. In fact at times directly across from the export meter to their own T41/2 meters for example, without even leaving the meterbox. Thus solar owners are ripped off by buying back their own feed-in.
Clearly whilst the class of Customers that are “Grid Connect Solar Owners” validly create “Avoided Network Costs”that are now simply to be enjoyed as a benefit to Transend, whilst the Retailer and Hydro ends remain neutrally un -affected. By the way any argument that lower sales volumes is not valid as the Government wants more retail competition that divides the sales volumes anyway !
Also hydro is unaffected as our lower demand merely saves water in the dams that Hydro can sell over Bass-link to the hungry mainland market as demonstrated currently.
The cost of feed in to the network is illuminated by a non cross subsidized feed-in and also our figures prove that the previously stated cost of Feed –in 1011-12 Aurora and Government stated as some $3.9 million was the retail price lost not the actual cost of the 1-1 F.I.T. This after calculating the “Avoided Cost” to same was something like $590,000 instead, by supporting the 1-1 tariff . But this cost is totally avoided under a 21.045 cent F.I.T. This fuss all over Feed in rates where retail turnover was $1.492 billion or affecting less than ¼ of 1% of turnover. Yet Our spreadsheet on “saving water in the dams” shows that at no expense to the Government Solar Grid Connect owners, if neutrally supported can avert such events as occurred in April 2008 where lack of water in the dams caused Hydro turbines to shut down and Hydro to realize massive costs to import power instead.
Potentially this alone adds high value and also condemns the decision to waste money buying the obsolete Gas Fired Bell Bay backup station that Aurora bought back! From Badcock and Brown and then recently sold to Hydro for $230 million. Again we fail to see any value in such decisions, yet the Government continues to waste hundreds of millions of dollars whilst Solar owner are denied fair value for feed –in.
Rightly this defined benefit of “Avoided Transmission Costs” arereal and thus should be awarded to the Solar Feed-in Class of customer asclearly. To us the decision of the board have led to a deliberate avoidance of our obvious ownership of “Avoided Network Costs” however the “Final Report” sets this aside as they have pushed the matter of any decision over to the Australian Economic Regulator which is incorporated within the A.C.C.C .
The Current costing system is too simplistic in simply seeing as another wholesale power generator, as the delivery point of premium grade power ready for immediate use is totally different with local embedded Solar feed-in as compared to traditional mainstream generation at the initial High Voltage pick up point adjacent the Turbines.
We look to see a fair and equitable system emerge that recognises the obvious and delivers a fair and equitable F.I.T. in return.
However there is a vital strategic and “In Principle”win in the Final report that awards us the margin of “Line losses” on both High voltage transmission, plus lower voltage transmission. This action demonstrates that avoided costs benefits here are clearly owned by P.V. owners and should form part of the F.I.T. rate and are recommended to be awarded to us in the Regulators Final Report within the 8.282 cents rate. The awarding of these “Avoided Costs” critically applies the theory that Solar Owners do own the savings that can be demonstrated.
However this paradoxically smacks the decision to now not award the further full “Avoided Costs”.
Firstly of the” High Transmission” costs which simply cannot see any argument show any occurrenceof use by feeding in. We calculate that this if awarded as well would validate some 12 cents value of F.I.T. to this point.
Also then in regards to “Low Transmission” side of things, mathematically we see simply further about 98% avoided costs as we avoid the substations and transformers whilst merely using only some 50~100 meters of hundreds of kilometres of poles and wires per delivery point.
This by our maths then shows the avoided costs inc G.S.T. is some 21.045 cents of the new lower Jan 2014, t31 rate of 26 cents odd.
Then to top up insult to injury, we also note that we alsosimply either buy our own feed- in back immediately across to our T41/2 meter.
Being also that we provide roof top solar infrastructure that we solar owners financedthat actually demonstrates, as we have proven on a spreadsheet that there is high value in our ability to “Save Water in the dams”spreadsheet was provided both to Treasury and The Office of the Regulator, that not only de-bunked Treasuries flawed response that cited “little value” of Solar some months ago in their reply to the matter. Our spreadsheet has not been challenged as it used Aurora’s and Treasuries data to demonstrate its positive results. However even though we see value for extra cents that probably validates the 1-1, we have become very aware that there is no Political flavour to look to this extra portion of feed-in value at this time. Thus we did not seek this and in doing it not only takes away any argument of “The Retailer” losing any margin at all.
In Summary;
The Retailers margin must spoken of and referred to by the industry would be fully preserved.
The Generator is bypassed, but allows Hydro Tas to simply sell the k.w.’s over Bass-link or reserve water in the dams as they see fit.
The Distributers avoids all but say 2% of costs thus should seek to rationalise its cost of charges across their customer base equitably.
We see a simply example that demonstrates our position . Big Supermarkets V Small Farmers
As recently investigated by the A.C.C.C.
It goes like this ......
We are like small farmers, we are many buy have no real power...
They, the distributers, power retailers and Government Bodies and Government (particularly in Tas as really only them on the powerful and same side V us.
So the big supermarket drives it truck to the farm gate of the big orchard and fills up the 40 foot container with bulk loose apples. This is like Transend picking up the high voltage power off the turbine for some 8 cents a (kw ) say.
Now that Truck takes it 8 cents a Kw of apples over the high voltage highway to the Distribution Centre. Just like power, it now is worth 12 cent (kw in)including Bruised apples allowance (line losses) if you like.
Now the apples (kw’s) are put through the stepped down to small packaging (distribution low voltage sub-stations) and then put into small trucks a plenty and sent off to the supermarkets . Just like power is broken down to low voltages and shipped via various routes of the networkof poles and wires to the consumer and substations and transformers to the customers and paid for at some 26 cents kw from Jan 2014 pricing.
So solar owners actually take their apples (kw’s) directly to the Supermarket back door (thus avoiding all of the costs the Supermarkets of Production, Bulk distribution . Then they further save some 98% of costs to then re-package for low voltage distribution . This figure now realises some 21.045 cents per k.w. less the 8.282 instead paid to us instead and thus sees a super profit from us of the shortfall of some 12.763 cents !
In conclusion we fight on. We take the updated argument to put P.V. owners plight to the test with those that look to be elected to run the state next year and those that may influence same.
Also we have commenced our concerns in initial discussions for the A.C.C.C whom also are the A.E.R. the Aust. Energy Regulator as cited in the Tasmanian Regulators Final Report
So we simply move forwards to continue the fight for justice.
Please do what you can to back up our position.
Regards John Thirgood
Save Our Solar Tas. Org