Not adjustable rate. The increase is from the insurance thats part of my mortgage payment. The electric company had raised the rates to cover the fire they started a couple years ago. The mortgage and $600 electric bill is 1/2 my monthly income.
It's not just due to the fire.
There's a certain margin between wholesale and retail and that margin is supposed to cover costs the Utility incurs outside of the fees defined on your bill. One of those things is of course profit, if the utility is a private corporation.
So, let's look at California. Consumption was 245TWh; 245,000GWh; 245,000,000MWh in 2023. Assuming this could be procured at an average wholesale rate of $80/MWh, that's a wholesale cost of $19.6 billion. Let's assume a retail rate of $150/MWh (we are ignoring for the sake of this simplified exercise, lower industrial/commercial rates), that's $36.75 billion in revenue, which nets us $17.15 billion. If we assume $15 billion in operating costs for the utility, that leaves us with $2.15 billion in profit.
So, this breaks down as:
Total operating costs: $34.6 billion
Total revenues: $36.75 billion
Net revenues: $2.15 billion
Now, let's take 41.3TWh; 41,300GWh; 41,300,000MWh and net meter it at $350/MWh! That's a $14.46 billion expense.
So, assuming again for the sake of this exercise that we could procure the remaining 203,700,000MWh at $80/MWh, that's $16.3 billion, so a total supply cost of $30.76 billion, the cost of which we have to spread over the non-solar customers of 203,700,000MWh. We assume the same $15 billion in operating costs remain.
Total operating costs: $45.76 billion
So, now assuming Net revenues are expected to be the same, we need to recoup $47.91 billion from those remaining 203,700,000MWh, which yields a retail rate of $235/MWh.
Then, you add in the much lower retail rates for large I/C customers, and the retail rate required for consumers ratchets up further.
This is why the net metering system, paying full retail to wealthy homeowners who can afford solar, is a fool's errand, as the cost is increasingly borne by the less wealthy ratepayers, who are required to cover the full-retail subsidy, as well as the Utility operating costs that are not being carried by the net metering customers. This drives up the retail rates.
