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Unwinding the Death Spiral

Rooftop solar, net metering, and the perils of utilityspeak.

Fortnightly Magazine - May 2014
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If you're concerned about rooftop solar - how net metering and the falling cost of PV panels threatens the utility business model - you should get hold of the lastest issue of Sierra, the bimonthly magazine published by the Sierra Club, and spend a half-hour reading "Throwing Shade," by reporter Edward Humes, which describes how, "fearing lost profits, the nation's investor-owned utilities are moving to blot out the solar revolution." You'll find the time was well spent.

And like Pogo, the lead character in Walt Kelly's long-ago comic strip of the same name, you will realize that you have met the enemy, and "he is us."

There's nothing like learning from your critics. I don't need to tell you how utilities come off in the Sierra piece. But I will anyway. You're the evil empire. Listen as the author interviews ratepayers, on how they want to do right for Earth and pocketbook, but find themselves stymied by doublespeak about cost shifting, free riding, and grid integrity. Well let me tell you. For the average ratepayer, the grid is the enemy: "Why do I need it? What's it done for me? Why does it go down with every third snowfall or thunderstorm?"

In particular, I liked the discussion by the author about how certain studies treat the installation of rooftop solar as a "cost" that must somehow be overcome. Here's an example that illustrates the perils of going down that path:

"the study considered as a 'cost' not just the solar power that homeowners sell to the grid but also what they consume at home. (By that logic, installing home insualtion or even LED lightbulbs would be free-riding too.)"

Yes, I've read my share of rate cases. I know all about fixed-cost recovery, how utility rates include all sorts of purpose-specific charges: energy costs, transmission costs, capacity costs, customer costs. But let me tell you: all of that is a dead end. It doesn't resonate. Don't lay it on your customers. They won't buy it.

My suggestion? Take the high ground. Talk of grid reliability not as cost, but as insurance - as a customer benefit, one that you provide on principle, for the public good. Then take a page from Obamacare. Everyone in this country understands by now that we need strong enrollment from healthy millenials under the Affordable Care Act so that policy premiums will be sufficient to make possible the higher social good of making health insurance available to older, less healthy Americans, including those with pre-existing conditions. That analogy should hold as well for rooftop solar and net metering. To provide insurance for reliability, every ratepayer must stay "enrolled."

What you've really got to do is join hands with ratepayers. Take their side. Because, as the Sierra article so clearly shows, if you don't, you're toast.

And now this ... RTO/ISOs for the gas industry?

Last month, on April 1st, at

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