Rolling back important progress on solar power

Rolling back important progress on solar power

- in Weekly Briefing


Duke Energy fights to keep profits trumping the common good

There’s been precious little good news on the environmental front of late. Species continue to be killed off at a record clip. Pollution in China and India is terrifyingly bad. Climate change continues to wreak physical, biological, economic and political havoc. Meanwhile, here in North Carolina, state leaders remain bent upon enacting laws and policies premised on the notion that things are as they were in 1914 rather than as they are in 2014.

One bright and extremely hopeful exception to this trend has been the rapid progress and, in some places downright explosive growth, in solar power. Fueled by advances in technology, public subsidies designed to help prime the pump and, most importantly, the exciting growth in public awareness, people all over the world are embracing and demanding the clean, sustainable electricity that solar power can provide.

These consumers understand that solar isn’t perfect and that it may cost a little more – especially at first. But they also realize that if solar can replace big chunks of the world’s fossil fuel addiction, it will provide huge benefits to the long-term health and well-being of the planet. To make matters even more hopeful, solar has a large and growing cadre of supporters and adherents on the political right who see it as means of securing American energy independence and helping entrepreneurs to bring more competition to the nation’s regulated electric monopolies.

Sounds like an obvious and encouraging win-win situation, right?

As usual, big money is the problem

Unfortunately, when it comes to the beneficial spread of solar power, there is a giant and enormously powerful roadblock: big money. Fueled by an unholy alliance of monopoly electric providers, big fossil fuel corporations and a group of conservative “think tank” toadies only too happy to bash all things “green,” the anti-solar movement has been rearing its head of late like some slow moving Godzilla movie monster.

Here in North Carolina, the battle is soon to be joined over something known as “net metering.” This is the eminently logical and reasonable, but hard-won public policy under which individual homes and business customers who outfit their buildings with solar panels to generate electricity can, effectively, run their electric meters “backwards.” For several years now, it’s been the rule in North Carolina that when such customers send power back out onto the electric grid they are reimbursed at the same rate that they pay for power when drawing it off the grid. Hence the use of the word “net” in the term “net metering.”

Of course, the overwhelming majority of such customers still need access to the power provided by traditional utilities. The sun doesn’t shine all the time and storage is typically not feasible. That’s why such small solar generators don’t just detach from the grid completely.

The practical limits of solar power and net metering notwithstanding, the concept has obvious and potentially huge ramifications for the future of electricity generation. As more and more solar panels are manufactured and installed and technology advances, the chance that truly significant segments of the societal demand for electricity can be met by such means starts to look more and more plausible. Just imagine if the installation of solar panels became so commonplace that they literally covered hundreds of thousands of roofs. Add to this the installation of scores of large solar “farms” and other renewable energy sources like wind farms and pretty soon electric power generation isn’t doing nearly so much to harm the world’s atmosphere and maybe, just maybe, the planet’s environmental crisis begins to ease.

Unfortunately, North Carolina’s monopoly electricity provider (and the nation’s largest) Duke Energy, has different plans. The giant, multi-billion dollar corporation has signaled its intention to seek an end to net metering in its present form. Like many other power companies around the country, Duke no longer wants to have a one-for-one swap in which solar producing customers are reimbursed at the same price they pay for electricity. Instead, the company wants to reimburse at a rate closer to what it pays for the generation of electricity in traditional power plants – i.e. about half that rate. The problem, of course, is that such a rate would pull the rug out from under widespread solar deployment (something that’s been happening at a rapid clip in North Carolina) by making it much less economical.

What’s really going on here?

The underlying issue in all of this, of course, is money. It’s not that Duke and other big power companies necessarily have anything against solar power; what they’re worried about is that if things continue as they have, solar (and widely distributed ownership) really could become a big deal in the future rather than the small niche phenomenon that it is now. That, in turn, would mean lost profits – perhaps big lost profits over time – for Duke.

Of course, Duke and other power companies are loathe to admitting this plain truth. Instead they’d rather talk about the Duke’s need for adequate revenue “in order to fairly cover the cost of providing service in their territory.”

Similarly, in a cheeky bit of hypocrisy, both Duke and its allies in the right-wing think tanks claim that current rules “discriminate against lower income customers” because the one-for-one net metering for solar supposedly forces higher electric bills on everyone than they might otherwise pay. This from a monopoly utility that has fought tenaciously through the years to preserve every avenue for cutting off a necessity of life to poor people struggling to pay their light bills and advocacy groups that’ve never met a poor person whose lot in life wasn’t their own “fault”!

As a spokesperson for the NAACP noted yesterday, the new and surprising concern for low-income consumers comes just as the rapidly growing demand for solar is driving down the price at a rapid pace – so rapid that it may actually become affordable for low and moderate income households to benefit directly in the foreseeable future.

The big picture

All of this said, there’s no denying that net metering as presently constituted could cost Duke, fossil fuel producers and other big corporations some profits and, at least in the short run, keep consumer prices somewhat higher than they could conceivably be. So too might conflict in the Persian Gulf and any number of other possible scenarios as well.

On the other hand, as David Pomerantz of Greenpeace told AP the other day “The more people who go solar, that’s fewer gas plants and coal plants and nuclear power plants that Duke has to build itself, which it ends up charging to all of its customers.”

As he might have also added: even if Duke’s arguments about consumer costs are true, so what? First off, there are other ways to address high costs for vulnerable consumers. But more to the point, it would be absurd for North Carolina to make its judgment in this existential matter based upon such a possibility – especially in light of the societal (and even planetary) benefits that rapidly expanding solar power offers.

How could it possibly make sense for a state to further undermine the survival of the species so that a giant corporation (one that’s supposed to be a public utility, for heaven’s sake) can make more money for its shareholders and millionaire executives? Good lord, if it could be shown convincingly that it would help prevent environmental catastrophe, North Carolina should abolish Duke tomorrow and appropriate all of its assets.

Happily, of course, it need not and will not come to that. There is a place in North Carolina for a regulated monopoly electricity provider – even one, like Duke, that makes a profit. Ultimately, however, that profit must always come second to overall societal good. Put plainly, Duke and the other corporations potentially impacted are creations of the state that exist for the good of the people of North Carolina; it’s not the other way around.

About the author

Rob Schofield, Director of NC Policy Watch, has three decades of experience as a lawyer, lobbyist, writer and commentator. At Policy Watch, Rob writes and edits daily online commentaries and handles numerous public speaking and electronic media appearances. He also delivers a radio commentary that’s broadcast weekdays on WRAL-FM and WCHL and hosts News and Views, a weekly radio news magazine that airs on multiple stations across North Carolina.
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