Utilities try to save solar power from itself — OFA is there to block them

Written by . Posted in Uncategorized, Yep, This Happened

Published on September 10, 2013

CaptureOrganizing for Action, the non-profit successor of Barack Obama’s presidential campaign, has launched a new initiative in Arizona. As they put it, it’s simply about “rewarding those who invest in clean energy, not making it harder to make the switch.” And to add some spice to the push, the group goes out of its way to throw a few political elbows at two Republican congressmen — the indispensable fundraising bogeymen:

Organizing for Action is working with our allies in Arizona to combat dangerous climate change that threatens our way of life. We are taking on climate change deniers like Congressmen [Paul] Gosar and [Trent] Franks, and promoting the clean energy solutions that are so abundant in Arizona.

Add your name to show your support for our climate change campaigns in Arizona.

The issue at hand, as Marita Noon explains, concerns renewable electricity in one of the few places where solar power is pretty nearly economically viable. Thanks to the state’s Renewable Portfolio Standard law, utilities like the Arizona Public Service Co. (the state’s largest electric utility) need to buy a lot of their electricity from solar customers’ excess production. Under the rules that developed in that environment, utilities overpay their solar customers by a factor of five because they actually pay them the retail rate for their electricity instead of the rate they pay other generators. That is to say, every kilowatt-hour your solar array produces and sends back into the system on a sunny day cancels out one that you use at night from the grid at night, so you can end up with a bill of zero or even a positive balance. This is known as “net metering.”

This was fine when there were fewer solar users, but as more and more electrical customers go in for federally subsidized solar panels, it’s becoming a serious problem. First of all, it means that solar users — who still need power from the grid at night — aren’t paying capital depreciation and maintenance costs for the system they use. Thus, utilities automatically lose money just by servicing solar users, and other customers have to make up the difference — people who perhaps can’t afford the up-front costs of a solar array or lack the credit score they’d need to lease one.

To make matters worse, the artificially high retail prices that the utilities pay for solar production are passed on to those same non-solar users — a double whammy. Prosper Arizona, which is backing reform of the system and produced the ad below, contends that each solar home creates a $20,000 hole in the system to be filled by higher bills for all of the non-solar customers.

The result of these solar-friendly policies, ironically, is that solar power can never be economically sustainable on a large scale — and mind you, this is sunny Arizona we’re talking about. (There are 42 other states where net metering exists, although in some places the utilities charge separately for generation and transmission.) If all APS customers went solar tomorrow, then the utility would go belly-up and no one would have power at night. This is a serious mathematical problem, and so the Arizona Corporation Commission is trying to change the terms of the deal so that things don’t get further out of hand:

The Arizona Corporation Commission (ACC) is currently considering revising the generous credits offered to customers with rooftop solar. The ACC has two plans before it aimed at making up for the lost revenues without the majority of the rate base having to subsidize their wealthier neighbors. One has residential solar customers selling electricity to the grid paying a monthly “convenience fee” for the use and maintenance of the grid and the related expenses. The second, would reduce the credit, which customers with new solar installations would receive, making it comparable to market rates the utility pays other power generators. Those who currently (installed up through mid-October) have rooftop systems would be “grandfathered” in.

The coalition effort to prevent reform of this system is called TUSK – and it’s cleverly attacking APS for “taxing the sun.” The group isn’t just made up of hippies, but it also enjoys at least some Republican and Tea Party support. It’s really just a case of self-interested economic illiteracy. If you want to see hundreds of thousands of people go over to solar, then you need a sustainable system with realistic outcomes. Otherwise, you end up with something vaguely resembling the debacle in Spain, where the government paid such generous subsidies that people started taking out second mortgages on their homes, only to see the system collapse, new taxes imposed on solar, and their investments ruined.

In the meantime, enjoy the irony: You’ve got Obama’s fundraising list staying out of the Syria debate, but being put into service to prevent solar power from being saved from itself.