Oncor in Dallas is applying demand charges to customers with solar + battery storage based on total system capacity instead of actual grid demand. Had a client with 20kW solar and 15kW battery get hit with demand charges for 35kW even though their max grid draw was only 8kW. The battery was actually reducing their grid demand during peak hours but Oncor is treating the battery discharge as additional load. This defeats the entire purpose of having storage for demand reduction. Their billing system is fundamentally broken for these hybrid systems.
Oncor demand charges on solar + storage systems - making no sense
CPS Energy in San Antonio has similar issues but they're at least trying to fix it. Problem is most utility meters can't distinguish between battery discharge and grid consumption in real-time. The meter sees power flow into the building and assumes it's all from the grid. We've been pushing for separate battery meters or smart inverters that can communicate discharge data directly to the utility. Without proper metering, battery storage will always get penalized under demand charge structures.
Southern California Edison had this exact problem until the California Public Utilities Commission forced them to fix it in 2023. They now use "net demand" billing that only charges for actual grid demand after accounting for battery discharge. The key is having interval meters that can track energy flows in 15-minute increments. Oncor needs to upgrade their metering infrastructure or create separate rate schedules for storage customers. This is a known problem with solutions available.
Xcel Energy Colorado solved this by requiring battery storage systems to have production meters that communicate with their billing system. The meter tracks both solar production and battery charge/discharge separately from grid consumption. Demand charges are based on net grid demand only. Cost about $400 extra per installation but eliminates these billing errors. Oncor should implement something similar instead of penalizing customers for equipment that actually benefits the grid.
Avista in Washington requires all battery storage systems to be enrolled in their demand response program to get proper billing treatment. During peak demand events, the utility can dispatch the batteries and customers get credits for grid services provided. In exchange, demand charges are waived for participating customers. It's a win-win that recognizes the grid value of distributed storage. Oncor should explore similar programs instead of just penalizing storage customers.
Duke Energy Ohio tried to pull the same stunt but we challenged it at the Public Utilities Commission. Argued that applying demand charges to battery discharge violates the principle of cost causation - customers aren't causing additional grid demand when using stored energy. Commission agreed and ordered Duke to revise their tariffs. The key is framing this as a billing error rather than a policy dispute. Utilities are incorrectly measuring demand and should be required to fix their metering.
AEP in West Virginia has been doing this for two years and customers are disconnecting their batteries rather than pay the inflated demand charges. It's completely backwards policy that discourages grid-beneficial technology. The real problem is utility billing systems were designed for one-way power flow and can't handle the complexity of distributed energy resources. Instead of upgrading their systems, utilities are just applying old rules to new technology and creating nonsensical bills.
Dominion Energy South Carolina actually has reasonable battery billing - they only apply demand charges to net grid consumption after accounting for all on-site generation and storage. Required some custom programming but it works correctly. The key was getting the state regulators involved early to establish proper billing principles. Texas Railroad Commission should review Oncor's practices and force them to implement proper net demand billing for storage customers.
Update on my client situation - filed a formal complaint with the Texas Railroad Commission and got Oncor to agree to a billing review. They admitted their current system can't properly handle solar + storage and are working on a fix for 2025. In the meantime, they're manually adjusting demand charges for affected customers. Other folks dealing with this should file complaints now while there's momentum for change. Document everything and demand proper net demand billing.
The fundamental issue is utilities treating battery storage as customer load instead of grid infrastructure. Batteries provide multiple grid services - peak shaving, frequency regulation, voltage support, backup power - that should be compensated, not penalized. We need federal standards for distributed storage interconnection and billing that recognize these systems as grid assets. FERC Order 2222 started this process but implementation has been slow at the state level.
California is requiring all investor-owned utilities to implement "storage-friendly" rate designs by 2025. This includes separate metering for storage, time-of-use rates that reward peak demand reduction, and compensation for grid services provided by customer-owned batteries. Other states should adopt similar requirements instead of letting utilities make up billing rules as they go. The technology exists to do this right - it's just a matter of regulatory will.
Colorado just passed legislation requiring utilities to offer "bring your own battery" programs that properly compensate customer-owned storage for grid services. Participating customers get credits for demand response, frequency regulation, and grid stabilization services their batteries provide. It's a much better approach than Texas where utilities are actively penalizing storage adoption. Hopefully other states follow Colorado's lead on recognizing the grid value of distributed batteries.
Entergy Arkansas is piloting a "virtual power plant" program where customer batteries can be remotely dispatched during grid emergencies. Participants get monthly credits plus exemption from demand charges when their batteries are providing grid services. It's exactly the kind of innovative approach we need instead of the punitive billing practices most utilities are using. The grid benefits when customers install storage - billing should reflect that reality.
Great discussion everyone. The bottom line is utilities need to upgrade their billing systems to properly handle distributed energy resources or they'll keep creating these nonsensical bills. Customers shouldn't be penalized for investing in technology that benefits grid reliability and reduces peak demand. File complaints with your state regulators and demand proper net demand billing for storage systems. The squeaky wheel gets the grease, and utilities will only change when forced to by regulators or bad publicity.