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Couple spar with PG&E over high cost of feeding home's solar energy onto grid

Power struggle

BY CHUCK CARROLL
Mercury News

Ken Adelman, who owns one of the most powerful solar electric systems in California, has had it with PG&E.

The utility wants Adelman and his wife, Gabrielle, to pay about $600,000 to upgrade the power lines and other equipment in their rural Santa Cruz Mountains neighborhood so their 31-kilowatt system doesn't overload the power grid.

``That's more than I paid for my house,'' said Ken Adelman, a retired tech millionaire who spent about $400,000 this spring for the photovoltaic system with enough juice for about a dozen homes. They intend to feed their excess energy back to PG&E for credit to ``zero-out'' their utility bill.

The state has been so hungry for new power sources it is offering rebates to solar buyers who hook up to the grid. But the Adelmans can't get their $138,317 rebate until PG&E allows them to go on line.

So, after months of wrangling for the right to connect to the grid, Adelman flipped the switch himself last week -- with nobody's permission.

``I'm sitting here watching my meter run backward,'' said Adelman, who said he sent about 10 kilowatts back onto the grid for a 20-minute test that proved his system was safe. ``PG&E is taking out all the guns. And so am I.''

Pacific Gas & Electric was not amused. Spokesman John Nelson said the company didn't know about Adelman's test, but he should have called PG&E so it could inspect the system before he put any power on the grid. The state's Public Utilities Commission requires that, Nelson said.

Not only did Adelman's test violate those requirements, it ``possibly created a safety threat to himself, PG&E workers and his neighbors,'' Nelson said.

Their fight over power continues. The Adelmans filed a complaint this month with state regulators -- starting a process that could wind up being a test case for small, independent power generators.

They want the PUC to order PG&E to hook up their system at no charge and to refund about $500 a month for the electricity they've bought since June 1 to power their 4,200-square-foot home -- with its pool, hot tub, Internet servers and four electric cars in the garage.

The Adelmans say a new state law says they shouldn't have to pay a cent to hook to the grid.

For years, the utilities have been required to allow solar systems of up to 10 kilowatts to connect to the grid for free, and get credit for the power they put online. But in April, lawmakers eager to encourage new sources of power raised the limit by 100 times -- to 1 megawatt. Adelman's system is one of the first to take advantage of the new law.

But PG&E is plugged in to a different state rule.

Nelson said the utility is bound by a document known as ``Rule 21.'' That rule requires the Adelmans -- not ratepayers -- to pay for any upgrades to the power system to safely handle the amount of power they want to add to the grid at the end of a circuit that wasn't built for such a load, Nelson said.

When state lawmakers changed the law to accommodate new power generators in April, it didn't automatically change Rule 21, said PUC regulatory analyst Valerie Beck, without taking sides in the dispute.

``There's nothing that can be done until Rule 21 is changed,'' Nelson said.

Connecting solar and wind systems to the grid -- known as ``net metering'' -- allows owners to get credit on their utility bills for power they feed back.

The Adelmans don't need all 31 kilowatts of electricity their system could produce. And generating all that power off the grid wouldn't make economic sense, because they would have to use their batteries every night and wear them out too fast, Adelman said.

PG&E says the main problem with the Adelmans' new system is that it's so big and so remote -- at the end of a power circuit about two miles from the center of tiny Corralitos.

The Adelmans, both electrical engineers who each made millions selling their start-ups to Cisco Systems and Nokia, said PG&E's estimate of $450,000 for upgrades and $150,000 in federal taxes is far too much.

Ken Adelman agrees the transformer on the utility pole outside his house probably needs to be replaced for a few thousand dollars. He said he'd be happy to pay that, even though he's convinced the law says he shouldn't.

Regulators and solar industry experts say they haven't heard of a utility trying to charge a solar operator a connection fee anywhere near $600,000. But the law is new, and the Adelman dispute could be a test as more people with wind and solar systems try to get connected.

``The law stands firmly on his side,'' said Bill Brooks, a consultant to the state Energy Commission who helped draft the law. ``It's certainly not worth it for PG&E to fight this.''

This spring, actor Clint Eastwood lobbied lawmakers to change the law so renewable energy generators larger than 10 kilowatts, like his Tehama Golf Club in Carmel -- a system about the same size as Adelman's -- would be able to hook up to the grid and sell back their surplus energy. In Eastwood's case, the hookup fee wasn't an issue, said Carmel developer Michael Waxer, who headed up the project. The golf course is in a developed area with power lines that can easily handle Eastwood's surplus power.

The state is watching PG&E and other utilities closely to see how well they cooperate with small independent power producers, said engineer Tony Mazy, with the PUC's Office of Ratepayer Advocate.

These producers, he said, represent ``a very real threat to alter the fundamental architecture of the electrical distribution system'' under which utilities have thrived.

``In fairness to PG&E,'' he said, ``the problems they are encountering are very real, and it takes a while to understand the problem and learn how to change your operations to accommodate new technologies.''

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Contact Chuck Carroll at ccarroll@sjmercury.com or (650) 688-7598.

-- (perry@ofuzzy1.com), August 01, 2001