I’ve posted several times, and I’m repeating every where I go, that we are heading for a electric utility train wreck in this country if we do not reconfigure our regulatory and pricing structure for the grid to reflect the emerging disruptive effects of solar and renewable technology.
The New York Times recently reported on utilities beginning to push back against consumers who want to place solar panels on their rooftops. The electric companies are concerned that they will be stuck with the enormous expense of maintaining a large electric grid while more and more customers opt out of the system during the most expensive, and for utilities, profitable, part of the day – afternoon electric peaks, yet expect to have the grid in place as a back up system. This is a real fear, as a recent survey of large US companies with revenues north of 1 billion reported that 51% of of the respondents would be expanding company-owned renewable generation within 5 years, and for 16 percent those expansions would be “significant”.
Wall Street has noticed. Utilities have noticed. Waiting for policy makers, especially at the state level to wake up.
The most recent evidence for the coming crunch comes from Arizona, potentially a leading edge solar state, where a local phony astro-turf group has begun running Fox News style ads bad mouthing solar and the, presumably, greedy and irresponsible people who are using it. I’m going to take a wild guess and hazard that this group has roots with the Koch brothers, Americans for Prosperity, and the like, and the local utilities may be getting drawn in to an unholy association with that Excess of Evil.
A politically charged marketing campaign has popped up in the debate over solar power in Arizona, and it might be funded indirectly by Arizona Public Service Co., the company asking regulators to force new solar customers to pay significantly more on their monthly bills.
APS on Friday asked state energy regulators to change the rules for how electric companies give solar customers credit for the electricity they send to the power grid.
Solar companies months ago began their own marketing campaign to fight the proposed changes, which they see as a threat to the residential rooftop solar industry. By adding $50 to $100 a month to solar customers’ bills, the changes would take away much of the financial incentive for using solar.
A Washington, D.C.-based conservative organization called 60 Plus, which focuses on seniors’ issues such as taxes, Social Security and Medicare, has produced an online video and created a website, azsolarfacts.com, in which it takes the side of APS in the solar debate.
The 60 Plus group has previously received funding from billionaire brothers David and Charles Koch. The group also received $9 million from an Arizona political consultant named Sean Noble, Bloomberg reported in October.
Noble is a paid consultant for APS, though utility officials would not disclose his services or discuss whether he was involved in crafting the 60 Plus campaign.
“Was it made with resources that could have originated with APS? I don’t know,” APS spokesman Jim McDonald said. “We are not directly funding them. We didn’t write the script, review the script.”
They are now being opposed by a conservative citizens Pro solar group, Tell Utilities Solar Wont’ be Killed, or TUSK – significantly chaired by Barry Goldwater Jr.
From the dontkillsolar website:
“As a son of Arizona, I know we have no greater resource than our sun. Republicans want the freedom to make the best choice and the competition to drive down rates.That choice may mean they save money, and with solar that is the case. Solar companies have a track record of aggressively reducing costs in Arizona. We can’t let solar energy – and all its advantages and benefits it provides us – be pushed aside by monopolies wanting to limit energy choice. That’s not the conservative way and it’s not the American way.”
The Issue
Arizona Public Service wants to extinguish the independent rooftop solar market in Arizona to protect its monopoly. How? They want to eliminate the policy that lets homeowners get fair credit for the surplus power they return to the grid. This is called net metering and it’s successful in 43 states. APS wants the Arizona Corporation Commission to change the rules so the utility can keep homeowners’ excess solar energy for free while maintaining its monopoly status.
The events in Arizona resonate with recent civil war in the Georgia Tea Party, where solar proponents won out over the Koch funded AFP group.
A proposal by Public Service Commissioner Lauren “Bubba” McDonald to more than double the amount of solar energy produced by Georgia Power pitted the Tea Party Patriots against the local chapter of Koch-funded group Americans for Prosperity (of the notorious “No Climate Tax Pledge”). Virginia Galloway, director of AFP for the state, warned the group’s 50,000 Georgia members that the proposal could increase electricity rates by up to 40 percent, and that this “mandate” — as she called it — would “reduce the reliability of every appliance and electronics gadget in your home.” But the Patriots see an increase in the availability of solar as an expansion of the free market and the ratepayers’ right to choose their energy sources.
Commissioners voted 4-1 in favor of a broader long-term electrical generation plan that requires Atlanta-based Georgia Power Co. to increase its solar power capacity by 525 megawatts by the end of 2016.
Of that amount, 425 megawatts would come from large “utility-scale” solar projects and 100 would come from projects small enough to be installed by individual residential or commercial property owners.
Georgia Power already is working to develop 260 megawatts of solar energy through two projects previously approved by the PSC.
But supporters of a motion by Commissioner Lauren “Bubba” McDonald to up the ante argued that recent technological advancements have brought down the costs of solar power enough to justify additional investment.
“We’ve got to approach this in a businesslike fashion and try to stay ahead of the curve,” McDonald said after the vote.
But Commissioner Stan Wise, the only member of the panel to vote against the proposal, said solar energy is still an inadequate substitute for “baseload” power generated by coal, natural gas and nuclear energy because of its intermittent nature.
He accused his fellow commissioners of putting ratepayers at risk by moving too quickly to embrace politically popular solar energy.
“You are engaged in Washington-style, feel-good energy policy … social engineering,” Wise told his colleagues. “I feel what you are about do to is both imprudent and irresponsible.”
Wise also objected to the commission’s decision to force an increase in solar capacity onto Georgia Power.
So, we are seeing a schism open up on the tea party right over renewable energy and protecting the environment.
Lay in popcorn.
Below, the offending anti-solar ad from the Arizona Koch-sniffing group, “prosper hq”.
“Paying consumers the full consumer cost of mid day power is probably excessive. The buyback rate should allow something for transmission and other distribution costs. In any other business a profit margin would be allowed for.”
Not necessarily so. For any number of reasons, the stated philosophy may not be correct or appropriate. For one, if the solar displaces energy used by the consumer, it has a double reduction in the utility burden. Both utility transmission and generation are avoided, not just fuel costs. That reduces the amortization costs of both generation and transmission. Then there is the simple market concept of winners and losers. If central power generation is inefficient and expensive relative to solar, shouldn’t it lose out to better choices? Why should central power generation be protected and favored over decentralized choices? The truth is that power generation is changing to more decentralized forms for good reasons based on the real inefficiencies of massive centralized power plants. Don’t fall into the trap of assuming the somewhat regulated monopoly of centralized power is the only option. Its not. There are other hidden assumptions in there. Why not the homeowner is not a business and therefore deserves to make a profit on their investment in solar? Why is that? No need to argue the extreme of whether homes can go off the grid or not. Some communities have a locally owned utility that generates some power and buys some from other utilities. What does going off the grid mean then?
Arguments about the extremes of powering every auto by electricity or converting all electricity to renewables are just that – arguments of extremes. Renewables do not have to replace all existing power overnight and won’t. On the other hand, they have grown rapidly and made a huge impact. It is more reasonable that conservation, renewables, and many other means will be used more and more as non-renewable sources dwindle and increase in cost. You can count on it. It is already happening.