[Ok-sus] David Nordahl's commetary of 9/20

Kelley C Smith smithkc at riskiii.com
Mon Sep 24 11:11:45 CDT 2012

OK, I will weigh in on this one.... I have been out of the loop for  
some years, but....

If you sell a used car, you are very unlikely to get the same amount  
for it if you trade it in to a dealer compared to selling it yourself.  
The buyer of the used car pays the market price–the same for any  
seller, whether a previous owner or a car dealer. The car dealer is  
very likely to explain this to a customer who wishes to trade in a  
car, "You are wholesaling this vehicle to us." The dealer has costs  
(employees, air conditioned office, phone bill, etc.). These are  
covered in the markup for the used car.

Another way to look at it is..when is a homeowner most likely to have  
energy to sell back to a utility? Not at the hottest part of a late  
summer afternoon. In other words, you are selling energy to the  
utility when they do not need it. And utilities have costs.  
Distribution lines, transformers, substations, transmission lines,  
bucket trucks..... Their "retail" price includes all that stuff over  
and above generation. You are not providing transmission,  
distribution, maintenance etc. You are only generating.

My knowledge could be outdated, but the principle of "avoided  
(generation) cost" as a buyback price was set by federal law, PURPA  
(Public Utilities Regulatory Policy Act). There could be something  
new....I've been out of the business a good long while.

Not especially trying to take sides, but this is really a fairly  
complicated matter. There are many things that have to happen behind  
the scenes to bring electricity, gasoline, natural gas to your  
doorstep. That is the reason I believe a homeowner's first question  
should be "How can I get my energy needs to a absolute bare minimum?"  
before embarking on installing PV panels or building a windmill.

Kelley Smith

On Sep 22, 2012, at 6:40 PM, Joel Olson wrote:

> He goes on to say "I'm not sure why one would assume entitlement to  
> a retail
> rate pay back for power ... ?
> Sorry, but that is how markets work. The price is the same for buyer  
> and seller;
> only the roles are being reversed here. I'm sure some people would  
> find that the
> prospect of getting a check from their utility company every month,  
> instead of a
> bill, to be rather juicy. And with OG&E, the new smart meters and  
> their peak
> hours pricing able to change that market price at will, keeping that  
> parity
> becomes
> even more important. And the terminology here, "Excess generation" is
> misleading.
> How about "Contributed Energy" instead?

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