Comment Re:They will move to a different charging model (Score 3) 488
If the amount of money made from the actual electricity falls too far then the cost will be transferred to a network connection costs.
It doesn't really matter how the accounting is done, utilities are going to have to charge more for power as they sell less of it, because their fixed costs are such a large proportion of their total costs. Fixed costs account for anywhere from 75 to 100% of plant costs: http://www.eia.gov/forecasts/c... (the data in table 1 appear to mean "fuel cost" when they say "variable cost").
The utilities model is based on the notion that you can recover your capital costs (and more) over the lifetime of the plant. The rapid rise of solar in particular is putting that at risk, and utilities are caught between a rock and a hard place. They can fight by keeping power costs low, and lose, or they can fight by raising their power costs--however they want to do the accounting--and also lose.
Personally, I hope they raise the costs. It will make low-carbon alternatives like wind and solar more attractive.