Conservative heavyweights have solar industry in their sights

[Jdog]

WASHINGTON — The political attack ad that ran recently in Arizona had some familiar hallmarks of the genre, including a greedy villain who hogged sweets for himself and made children cry.  But the bad guy, in this case, wasn't a fat-cat lobbyist or someone's political opponent.  He was a solar-energy consumer.

Solar, once almost universally regarded as a virtuous, if perhaps over-hyped, energy alternative, has now grown big enough to have enemies. The Koch brothers, anti-tax activist Grover Norquist and some of the nation's largest power companies have backed efforts in recent months to roll back state policies that favor green energy. The conservative luminaries have pushed campaigns in Kansas, North Carolina and Arizona, with the battle rapidly spreading to other states.

Alarmed environmentalists and their allies in the solar industry have fought back, battling the other side to a draw so far. Both sides say the fight is growing more intense as new states, including Ohio, South Carolina and Washington, enter the fray.  At the nub of the dispute are two policies found in dozens of states. One requires utilities to get a certain share of power from renewable sources. The other, known as net metering, guarantees homeowners or businesses with solar panels on their roofs the right to sell any excess electricity back into the power grid at attractive rates.
Net metering forms the linchpin of the solar-energy business model. Without it, firms say, solar power would be prohibitively expensive.

The power industry argues that net metering provides an unfair advantage to solar consumers, who don't pay to maintain the power grid although they draw money from it and rely on it for backup on cloudy days. The more people produce their own electricity through solar, the fewer are left being billed for the transmission lines, substations and computer systems that make up the grid, industry officials say. 

"If you are using the grid and benefiting from the grid, you should pay for it," said David Owens, executive vice president of the Edison Electric Institute, the advocacy arm for the industry. "If you don't, other customers have to absorb those costs." The institute has warned power companies that profits could erode catastrophically if current policies and market trends continue. If electricity companies delay in taking political action, the group warned in a report, "it may be too late to repair the utility business model."

The American Legislative Exchange Council, or ALEC, a membership group for conservative state lawmakers, recently drafted model legislation that targeted net metering. The group also helped launch efforts by conservative lawmakers in more than half a dozen states to repeal green energy mandates.

"State governments are starting to wake up," Christine Harbin Hanson, a spokeswoman for Americans for Prosperity, the advocacy group backed by billionaire industrialists Charles and David Koch, said in an email. The organization has led the effort to overturn the mandate in Kansas, which requires that 20% of the state's electricity come from renewable sources.
"These green energy mandates are bad policy," said Hanson, adding that the group was hopeful Kansas would be the first of many dominoes to fall.

The group's campaign in that state compared the green energy mandate to Obamacare, featuring ominous images of Kathleen Sebelius, the outgoing secretary of Health and Human Services, who was Kansas' governor when the state adopted the requirement.The Kansas Senate voted late last month to repeal the mandate, but solar industry allies in the state House blocked the move.Environmentalists were unnerved. "The want to roll it back here so they can start picking off other states," said Dorothy Barnett, director of the Climate and Energy Project, a Kansas advocacy group.

The arguments over who benefits from net metering, meanwhile, are hotly disputed. Some studies, including one published recently by regulators in Vermont, conclude that solar customers bring enough benefits to a regional power supply to fully defray the cost of the incentive.

Utilities deny that and are spending large sums to greatly scale back the policy.
In Arizona, a major utility and a tangle of secret donors and operatives with ties to ALEC and the Kochs invested millions to persuade state regulators to impose a monthly fee of $50 to $100 on net-metering customers.

Two pro-business groups, at least one of which had previously reported receiving millions of dollars from the Koch brothers, formed the campaign's public face. Their activities were coordinated by GOP consultant Sean Noble and former Arizona House Speaker Kirk Adams, two early architects of the Koch network of nonprofits.
In October, California ethics officials levied a $1-million fine after accusing groups the two men ran during the 2012 election of violating state campaign finance laws in an effort to hide the identities of donors.

The Arizona Public Service Co., the state's utility, also had Noble on its payroll. As a key vote at the Arizona Corporation Commission approached late last year, one of the commissioners expressed frustration that anonymous donors had bankrolled the heated campaign. He demanded APS reveal its involvement. The utility reported it had spent $3.
"Politically oriented nonprofits are a fact of life today and provide a vehicle for individuals and organizations with a common point of view to express themselves," company officials said in a statement in response to questions about their campaign.

The solar companies, seeking to sway the corporation commission, an elected panel made up entirely of Republicans, formed an organization aimed at building support among conservatives. The group, Tell Utilities Solar won't be Killed, is led by former California congressman Barry Goldwater Jr., a Republican Party stalwart."These solar companies are becoming popular, and utilities don't like competition," Goldwater said. "I believe people ought to have a choice."

The commission ultimately voted to impose a monthly fee on solar consumers — of $5.
The solar firms declared victory. But utility industry officials and activists at ALEC and Americans for Prosperity say the battles are just getting underway. They note the Kansas legislation will soon be up for reconsideration, and fights elsewhere have barely begun.

In North Carolina, executives at Dude Energy, the country's largest electric utility, have made clear the state's net metering law is in their sights. The company's lobbying effort is just beginning. But already, Goldwater's group has begun working in the state, launching a social media and video campaign accusing Duke of deceit.

"The intention of these proposals is to eliminate the rooftop solar industry," said Bryan Miller, president of the Alliance for Solar Choice, an industry group. "They have picked some of the most conservative states in the country," he added. "But rooftop solar customers are voters, and policymakers ultimately have to listen to the public."


http://www.latimes.com/nation/la-na-solar-kochs-20140420,0,7412286.story?page=2#ixzz2zSKtWcxD

[pierre]

The United States of Koch

[carpnter]

I don't have a problem with utilities charging a reasonable fee to net metering customers, but the fees for infrastructure maintenance need to be transparent on their bills.  Whatever the utility charges needs to be able to be justified.  They know what the cost for infrastructure maintenance is and it really isn't that expensive.  If the costs average out to $0.50/kwh or $1.00/kwh per customer then that is what the net metering customer should see reduced from the amount they are credited to sell excess energy to the utility.

Personally I am not a fan of solar power because the space needed for a solar farm requires too much land.  I am a bigger fan of wind power, but even that comes with its own set of challenges.

[Dog Walker]

All of us who have rooftop solar still pay some to the utilities, just less than we would have without the panels.  I wonder if the real opposition to solar has to do with utility bonds, fewer of which will have to issued to build power plants and transmission lines the more of us have our own generating capability.

[peestandingup]

see. its nonsense like this that convinced me that my Republican Party had lost its mind and was reduced to idiots, fools, and evildoers.

I agree, but they're two sides of the same coin. Example: Dems are currently pushing HARD in lots of states (and in other areas inside the fed) for e-cigarettes to be regulated & taxed the same as tobacco products. I'm not going to get into it (people can do their own research), but they're not EVEN the same thing. They know this, everyone knows this, but still. They want that tax money, while their tobacco & pharma lobby buddies nudge them (who both stand to lose as they gain popularity), & will spin it every which way they can until it happens. "Think of the children!" Sound familiar? It should because thats their go-to.

My point is both parties are corrupt as hell & big business rules at the end of the day. Whether we're talking about solar, Tesla auto sale bans or ecigs.

[bencrix]

Solar is a deeply disruptive technology for an industry that has heretofore enjoyed a fairly comfortable monopoly. The monopoly has been reasonably premised on the huge infrastructure costs of producing and providing power, but one of the classic shortcomings of monopolies is so-called "rent seeking behavior," and the price of solar has been falling so fast for so long that it is on the cusp of being directly competitive with utilities' decades-old business model everywhere, not just in states with favorable policies. Faced w/ competitive pressure, some utilities may find it more cost-effective to influence public policy (in places where that is feasible, like AZ and NC) than innovate. In places where "rent seeking" is better controlled, innovation is happening. In either scenario, billions of dollars in investment is at stake and the timing of change is important. This is an important public policy issue that will be fascinating to watch going forward.

[BridgeTroll]

Apparently the The Alliance for Solar Choice (TASC) is a new lobbying group for large solar companies. " At the nub of the dispute are two policies found in dozens of states. One requires utilities to get a certain share of power from renewable sources. The other, known as net metering, guarantees homeowners or businesses with solar panels on their roofs the right to sell any excess electricity back into the power grid at attractive rates."

http://runonsun.com/~runons5/blogs/blog1.php/ranting/solar-alliance-formed-to-resist

The nation's leading rooftop solar companies today announced the formation of The Alliance for Solar Choice (TASC).  TASC believes anyone should have the option to switch from utility power to distributed solar power.  Founding members represent the majority of the U.S. rooftop solar market and include SolarCity, Sungevity, Sunrun and Verengo.

TASC is committed to protecting the choice for distributed solar.  Most immediately, TASC will focus on ensuring the continuation of Net Energy Metering (NEM).  Currently in place in 43 states, NEM provides solar consumers with fair credit for the energy they put back on the grid, which utilities then sell to other customers.  In simple terms, NEM is like rollover minutes on your cell phone bill.  Monopoly utilities are trying to eliminate NEM to halt the consumer-driven popularity of rooftop solar, which is helping create thousands of local jobs around the country.

[Rob68]

Id like to know when jea is going to start up an easy finance program to help the citizens of the city to install solar in their home and get away from the nasty coal we all breath here in jax in order to our power service. Dont we as owners of the agency have to right to make them change their business model to suit a renewable source of energy. If we are paying such high rates shouldnt we be able to apply some of that towards solar or wind energy.

[NotNow]

^What he said.

[Josh]

They will now, for solar water heaters.

[Rob68]

They will now, for solar water heaters.

only bread crumbs of what they can do if they wanted to.

[IrvAdams]

^^ Time to lobby and bug 'em.

[Josh]

They will now, for solar water heaters.

only bread crumbs of what they can do if they wanted to.

Yes, but with current laws, there is zero "want" for them to do such. It will be a reality in the not-too-distant future even at the current rate of legislation, but as of today they don't need the green credits, and as a homeowner I wouldn't be interested in taking on that kind of infrastructure/debt only to sell excess power back at a fraction of its real value.

[spuwho]

I don't think they are anti solar directly. They are against subsidies.

They believe the use of solar should be set at market rates. They are against mandates that bury the true cost of non fossil sources into the overall rate structure.

Now if consumers had a choice of what made up their energy sources in their monthly bill then it would alleviate their concerns. but policy makers know that any alternative energy development won't reach anything close to consumer choice if it can't get a reasonable level of investment and acceptance.

With regards to net metering the issue is that billing is highly inconsistent across the country. Some PUC's mandate the utility eat certain costs to promote the alternative source. Which people translate to an unfair subsidy.

Some PUC's require the homeowner to pay all the upfront costs to connect and pay a monthly fee to stay connected, essentially a service charge while they net out only the actual kwh used.

Another issue in net metering is that in some states the utility only nets your excess power in wholesale prices, not retail.

Solar owners got ticked because net energy use was billed at 9 cents per kwh but net energy returned was only credited at 3 cents per kwh. Some states passed laws requiring net returns to be credited at the retail rate.

This highly upset the utilities. Wholesale pricing in net metering pushed the ROI for the homeowner out past 20 years. Retail pricing in net metering gets it down near 15 years.

Today's power generation is based on a model developed by Nikola Tesla
at the turn of last century. It was based on a premise that the larger the generation source the cheaper it would be to create it and distribute it. And Tesla's genius was in figuring out how to distribute it just as cheaply.

What people are looking for now is something that has all the price benefits of central generation, but has all of the flexibility of distributed generation.

Who is going to pay for that?

[bencrix]

In this analysis we can't assume the variables as they are today will stay the same. It is important to recognize that "solar" isn't a fuel at all, but a technology. As such, its price is on a historic decline similar to TVs, computers, cell phones, etc. Coal, nuclear, natural gas -- all fuels -- have price components that will only go up long term.

So, solar with or w/o subsidy is going to change the utility industry substantially in our lifetimes.

Left to their own devices, utilities will choose to respond to this in different ways in different places. As regulated entities, how do we want them to respond and do we understand the consequences of our choices? Net metering is a partial answer to these kinds of questions, but not the only one and certainly not the last. A highly nuanced policy discussion is required.

(There are rational arguments for a subsidy. There are also valid theoretical reasons to have no subsidies whatsoever in an economy. The incumbent energy sources, by the way, already have tremendous subsidies in place that the utility industry is not against.)