Energy Monopolies Attack Solar Power

By Peter Asmus, Faultline Magazine. Posted February 26, 2003.

One of the few success stories to emerge from California's ill-fated experiment with restructuring its power market is solar power. Over the last two years, installations of this clean non-polluting energy source have increased by 1,000 percent.

In poll after poll, solar energy consistently ranks as people's first choice when they're asked what fuel source they prefer to generate their electricity. Given concerns over national security and vulnerability of fossil fuel supplies, and the growing evidence confirming a link between fossil fuel burning and global climate change, increasing the nation's reliance upon solar power has never made more sense.

Last year, utilities mounted a campaign to increase the cost and complexity of "net metering," a policy pioneered in California that allows a owner of a solar energy system connected to the grid to barter with their utility. When the sun is shining, solar photovoltaics (PV) transform sunlight into electricity. If the owner of the solar system doesn't need the power produced by solar panels, the electricity can be sent back to the grid under net metering. When the sun isn't shining, the utility, in essence, returns the electricity back to the customer. The meter spins backwards and forwards until production and consumption is netted out on a monthly or annual basis.

Due to a last-minute grassroots lobbying effort by solar advocates and customers, proposed utility changes to net metering for large-scale solar systems were defeated in the closing days of the last legislative session. This year, the California Public Utilities Commission (CPUC) has proposed what amounts to a new tax on customer-owned solar systems that would increase the cost of this non-polluting electricity source by up to 40 percent.

If California's powerful private utilities -- Pacific Gas & Electric (PG&E), Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) -- have their way, charges ranging from 2 to 5 cents/kWh will be added to each kilowatt hour produced by solar systems that, like energy efficiency measures, reduce the need to purchase electricity from other often more polluting and sometimes more often more expensive sources.

Why would the CPUC increase costs of solar power that would effectively wipe out a 40 percent subsidy granted to solar PV under other existing state programs?

Large industrial customers were recently authorized to retain electricity purchase contracts with outside parties even though small consumers are still required to continue buy overpriced and dirty long-term power supplies purchased by the State of California during the height of the energy crisis in 2001. In exchange for the right to buy cheap and dirty power, the CPUC will require these large customers to pay an "exit fee" or tax to help pay their fair share of the state's investment in long-term fossil fuel supply.

PG&E, SCE, and SDG&E would now like to also charge individual customers who install a solar electric system on their facility the same (or higher!) charge as they levy on large industrial customers who entirely leave the system. This proposed charge is fundamentally unfair for several reasons:

Individuals, companies and government facilities that install solar systems still buy most of their power from utilities. Therefore they pay the same overall higher rates to pay off state investment in power supplies as all other utility customers.

Customer-owned solar power provides public benefits by delivering non-polluting electricity during peak demand periods, when the dirtiest electric generators often come on line to avoid blackouts. Large customers who entirely leave the system offer no comparable benefit.

The proposed utility "solar tax" directly contradicts existing state policies designed to encourage expanded use of on-site solar power. On top of that, implementing the new solar tax will create administrative costs for utilities that will likely supersede the miniscule amounts of money collected from solar customer/generators.

CPUC Commissioner Loretta Lynch has an alternative proposal that would moves in a better direction than the initial proposed CPUC policy. Her proposal would exempt solar customers with net metering arrangements from "exit fees." Though an improvement, this proposal still falls short of a sane way to maintain momentum on a power source ideally suited to California's sunny climate.

All solar customers connected to the grid should be exempt from exit fees. Does anyone propose to tax people who reduce their reliance upon grid power by being more energy efficient? Of course not! In fact, the customers are rewarded for that beneficial behavior with financial incentives. Solar customers who use all of the solar energy their PV panels can crank out should not face stiff financial penalties either because they are reducing peak demand on the grid, too.

Governor Davis signed a new law that would double the amount of renewable energy generated in California over the next decade or so. This law, known as a Renewable Portfolio Standard, is allegedly among the primary accomplishments of the Davis administration in responding to the energy challenges still facing California.

Isn't it time we had some clear and compelling leadership from the top on down the line on renewable energy sources? If the CPUC's majority proposal is adopted, California will be pulling the rug out from under solar power, the one electricity source that can bring "power to the people" while helping the economy and the environment.

To take action and get involved, visit VoteSolar.org and the California Solar Center.

Peter Asmus has covered energy issues for 15 years. He is author of "Reinventing Electric Utilities: Competition, Citizen Action and Clean Power" and "Reaping The Wind: How Mechanical Wizards, Visionaries and Profiteers Helped Shape Our Energy Future," both published by Island Press.

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