The number of rooftop photovoltaic (PV) installations has increased dramatically in recent years, but growth is slowing under the weight of market saturation in places like California, financial problems on the part of several solar panel makers, and well-organized lobbying campaigns by the nation’s investor-owned utilities, The New York Times reports.
Utilities complain that net-metering, which allows solar customers to sell their excess electricity to the grid at retail prices, is unfair to customers who don’t have PV arrays of their own because the cost of grid maintenance is spread over fewer people. And the effort by utilities is paying off, The Times reports: almost every state in the country is currently reviewing their solar energy policies while the national fortunes of renewable energy grow dimmer at the same time.
The Edison Electric Institute, a utility lobbying group, is a key player in efforts to blunt the growth of rooftop solar. And now, a former top executive in the group, Brian McCormack, occupies a top post in the U.S. Department of Energy (DOE) as Secretary Rick Perry’s chief of staff.
McCormack is heading up a department review of whether renewable energy is hurting conventional energy providers, a review that some environmental groups fear will alter federal policies that until now have promoted wind and solar energy. The DOE report is due this summer.
The developments worry David Pomerantz, executive director of the Energy and Policy Institute. “There’s no doubt these utilities are out to kill rooftop solar,” he told the newspaper, “and they’re succeeding.”
Lobbying at the state level
Utilities have waged war on net-metering in a number of states, including California, Arizona, Nevada, and Hawaii. Their stated fear is a utility “death spiral” prompted by customers who leave the fold and generate their own power, thereby reducing sales and utility profits.
The Times report focused on efforts in Indiana, where lobbyists turned out this spring to support a bill in the state legislature that would reduce the rates that solar customers were paid for their excess power. A talking point circulated by a local utility lobbying organization claimed that homeowners with solar arrays “avoid paying for use of the grid,” The Times reported. That’s been a familiar theme in state legislatures around the country.
In Indiana, the state’s five investor-owned utilities collectively gave $3 million to mostly Republican candidates over four election cycles. However, the sponsor of this year’s bill, state Senator Brandt Hershman, said that the donations played no part in his position against net-metering. He told the newspaper that he listens to all sides and then promotes “good policy.”
Utilities also have used the American Legislative Exchange Council, a conservative nonprofit that writes model laws that can be introduced in state legislatures, to fight net-metering.
Thomas Kuhn, president of the Edison Electric Institute, warned a January board meeting that rooftop solar continues to be a threat, and said the EEI is ready to help state lawmakers.
“EEI is happy to come to any state at any time. We have two dozen states we are working on,” he said, according to The Times.
Report criticizes EEI lobbying
Efforts by regulated utilities to influence renewable energy policy at the state label were challenged in a report released this spring by the energy watchdog group the Energy & Policy Institute.
ThinkProgress said in a post in May that the Institute’s study found utility customers pay for political and public relations work of utility trade groups.
The report said that regulated utilities include their EEI annual payments in their operating expenses.
“The widespread practice forces ratepayers to pay for political and public relations activities with which they may not agree, and from which they do not benefit,” the report said. “It also has the effect of ratepayers subsidizing the political activities of EEI and other trade associations.”
The report added that utilities “have become adroit” at using the EEI and other trade groups to influence policy while protecting shareholders from most of the associated costs.
“Almost no other political organizations have the luxury of subsidization enjoyed by EEI and other
representatives of the regulated utility industry,” the institute said.
ThinkProgress said that EEI highlights the percentages of costs used for lobbying on invoices to members based on the Internal Revenue Code. That percentage is charged to shareholders with the balance charged to utility customers. An EEI spokesman said the lobbying portion of EEI dues is “not recoverable,” that is, can’t be charged to ratepayers.
“EEI activities in certain regulatory proceedings and communications efforts, for example, are not lobbying as defined by federal law,” the spokesman said.