The battle over who should pay for solar energy
The Sun Sentinel reports that a former official of the Florida Public Service Commission (which regulates the state’s utilities) who resigned after partying with executives of Florida Power & Light (the state’s largest private utility) has now been hired to push for renewable energy legislation backed by FPL.
According to the paper, that former official, Ryder Rudd, has joined Citizens for Clean Energy, a business group that counts FPL among its members, to help revive a cost-recovery measure that would allow utilities to shift the costs of renewable energy projects to their customers.
Several state lawmakers, including Senate President Mike Haridopolos, R-Merritt Island, have said they support the idea, which fell apart during last year’s regular session of the Florida legislature.
The proposal is also featured prominently in the policy recommendations of Rick Scott’s team of economic development advisers, which counts FPL executive Sam Forrest among its members. According to an FPL source quoted by The Miami Herald, Forrest’s goals included “ensuring that our company’s agenda, and only our company’s agenda, made it to the final recommendations.”
“A regulatory cap is the only barrier to hundreds of megawatts of new generating capacity,” the transition document states. Existing laws allowed utilities to bill customers for 110 megawatts, which were consumed by large-scale solar installations built by FPL.
Under House Bill 7229, which passed the House but not the Senate during the 2010 regular session, that cap would have been lifted, allowing the utilities to bill their customers for the extra cost of producing renewable power, plus an extra profit margin.
Shawn Lorenz of Sunbelt Solar Energy has said arrangements like H.B. 7229 are a great deal for utilities: Customers pay the power companies to build new solar panels, which the companies control.
The slides from Scott’s team point to a Florida Tax Watch study showing that utility customers in the state are willing to pay an additional $1 on their monthly bills to support alternative energy. The study does not differentiate between schemes like H.B. 7229 and other ideas, such as adding a surcharge on utility bills to create a public benefits fund, which would pay off the existing backlog of the state’s solar rebate program, and also fund pilot renewable energy projects, energy efficiency upgrades for low-income residents and other measures.
In other words, as I’ve reported earlier, many solar contractors, who benefit from programs like solar rebates that allow people to install their own solar panels, and utilities like FPL, which are eager to have customers finance their centralized solar installations, may find themselves competing for a share of that extra $1 a month customers say they are willing to pay.
State Sen. Mike Bennett, R-Bradenton, says he favors an approach that supports solar development without increasing utility bills. He has introduced a bill that would allow anyone who installs solar panels to sell their surplus power to utilities at the same premium FPL charged customers for its 110 megawatts of solar panels. Right now, when a customer’s power meter runs backwards, the utilities are only required to pay for the money they save by not having to generate that power themselves, so customers aren’t rewarded for generating electricity with solar or other forms of clean energy.
Though the specifics are still being hammered out, Bennett’s law would allow people who install solar panels a higher return on their investments. It could also loosen utilities’ grip on customers’ power supplies, potentially turning everyone who installs solar panels to produce a surplus into a supplier.
“Utilities aren’t going to like it,” he said. “There’s probably going to be a fight.”