However,
distributed generation is a pain in the ass to the utility companies.
They have a different business model in mind. They would prefer to
continue to use fossil fuels, or to build large, centralized wind
farms or solar power plants and sell the electricity to their
customers at the same rate they are now paying for power from fossil
fuel plants, even though renewable energy will be cheaper to produce.
So they and their allies at the American Legislative Exchange Council (ALEC) have launched a campaign in the states to eliminate
distributed generation. It involves labeling people with
solar collectors as “free riders.”
This is their argument: When solar customers sell electricity to the power
company, they use the existing energy grid, but they are not paying
anything toward the cost of establishing and maintaining that grid.
Therefore, they are indirectly increasing the rates of nonsolar
customers. Sometimes they argue that poor customers (who can't
afford solar) are subsidizing rich ones (who can). To recoup these
fixed costs, the power companies want to penalize solar customers either by charging them a monthly fee or by reducing the amount they pay for the
electricity solar collectors produce.
One document even claims that distributed generation is an “existential
threat” to the power companies. They claim that if solar customers
drive up the rates of nonsolar customers too far, everyone will be
forced to go solar, thus driving the power companies out of business.
While some of us may smile at this prospect, the sudden bankruptcy
of large power companies would be disruptive.
The rebuttal from solar advocates is this: What Shugar said in 1989 is
still true. Distributed generation reduces the power companies'
costs by reducing the demand for power, especially during peak midday hours
when solar collectors are producing energy. Therefore, the power
companies have to spend less money building new generating plants and
power lines. They can produce the energy they sell at a cheaper
rate. If that's the case, there's no reason to pass along the “cost”
of solar to nonsolar customers, since the cost is negative.
Therefore, there is no existential threat.
Who is
right? A study by energy consultant Tom Beach supported the solar
advocates' argument. He found that distributed generation saves the
power companies $92 million per year in Calfiornia and $34 million a
year in Arizona. (Below is a political flyer based on the Beach
study.) Of course, distributed generation does cost the power
companies revenue,
since every kilowatt hour produced by their solar customers is energy
that they don't sell. Is it this competition that they object to?
Does
it matter who is right? Probably not. Energy companies can lie
about their costs, or they can use their superior spending power on
campaign contributions and lobbying to render the science irrelevant.
Enter
ALEC, an organization of corporations (including, of course, energy
companies) and state politicians that produces model bills for
conservative legislators to introduce at the state, and sometimes
federal, level. It is ALEC that has given us such recent triumphs as
stand-your-ground and voter ID laws. Legislators have introduced 77 ALEC energy bills in 34 states, intended to block the development of
renewable energy at every stage. Bills have been introduced in
Arizona, California, Colorado and Georgia to add a monthly surcharge
to the electric bills of solar customers. Arizona has taken action. The original bill called
for a monthly surcharge of $100 on solar collectors, which would have made them a
huge money loser for consumers. They eventually settled on a
fee that averages $4.90 per month. The solar companies are
spinning this as a victory, but this added cost makes solar less
attractive to homeowners.
Other energy initiatives pushed by ALEC include bills to eliminate state
Renewable Portfolio Standards, which require utilities to produce a
percentage of their power using renewable energy; and a federal bill to strip
the Environmental Protection Agency of the power to regulate
greenhouse gas emissions. The ALEC legislative agenda is not
just about deny women access to abortions or denying black people the
right to vote. It also strikes at the continuing ability of this
planet to support human life.
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