Rural cooperatives fight solar power tooth and nail
- April 7, 2016
- 1022 views
Mississippi has some of the worst laws in the nation on solar energy. That's too bad because solar is becoming competitive and Mississippi has lots of sunshine.
Last year, the Mississippi Public Service Commission (PSC) stipulated new net metering rules for Entergy and Mississippi Power Company to promote solar power.
In response, Mississippi's nonprofit rural co-ops, which supply electricity to 60 percent of Mississippi homes, are seeking legislative exclusion from the new pro-solar rules.
One has to ask, why? Why would the co-ops not welcome solar? The co-ops are supposed to represent the interests of their owners, the people. Solar can lower utility bills. Why are the co-ops fighting it?
Let me ask you this: How many rooftop solar panels have you seen in Mississippi, a state with huge amounts of sunshine? Zip. Nada. Nothing. There's a reason for that. The power companies have used their political influence to stop competition. It is going on at the state Capitol at the very moment I type these words.
The co-ops have self-perpetuating boards full of local movers and shakers. There are nice executive salaries and perks for directors. It can get clubby and self-interested quickly. The average customer has little choice or influence.
Engineers working for the co-ops don't want solar. It's a hassle. Involves more work. The co-op boards end up protecting their employees and their monopoly instead of responding to their customers' needs. Welcome to the world of regulated monopolies and political action committees.
Even worse, the co-ops, because they are owned by their customers, are exempted from many of the regulations of the PSC. This creates an unregulated monopoly, one of the worst creations of capitalism.
Just try getting the typical rural power cooperative to let you install solar panels. You'll probably have a 100-page legal document to sign, all sorts of insurance, multiple fees, endless inspections. Hoops and hurdles galore. Forget about it. Ain't gonna happen. Which is why you don't see any solar panels in Mississippi.
The United States Energy Information Administration has concluded that the "levelized cost of energy" is about the same for solar and natural gas. The panels allow any homeowner to become a power producer.
Solar has the added advantage of being carbon neutral. I am a man-made global warming skeptic, but many intelligent, well-meaning people believe carbon poses a threat to mankind. This is hard to ignore.
Solar is booming in the United States and the world. With federal subsidies, homeowners in pro-solar states are cutting their utility bills in half by installing solar panels. Payback in neighboring Louisiana, which is pro-solar, is only six years. And solar panels last for 25 years.
Imagine the electricity cost savings to a broiler house if solar panels could provide low-cost solar electricity for the fans during most of the day. Why are the co-ops, backed by our Republican Legislature, erecting barriers to prevent this?
Net metering is a big part of the fight. Net metering means if your solar panels produce more electricity than you consume, you get a credit on your electricity bill. The meter runs backwards. It's real money. Thus the fight.
Only four states in the country don't have a net metering law. Mississippi is one of the four. A Google search will quickly show you Mississippi is far behind other states in the adoption and encouragement of solar.
National companies that will install and finance your rooftop installation are just waiting for the laws to change in Mississippi. They pay for it. Your bill goes down. You save money. In seven years, you own it and save even more.
You would think power co-ops would be supporting this on behalf of their customer-owners, but you would be wrong. Instead, most power co-ops treat solar as a red-headed stepchild. It's more work for the engineers and co-op employees. Somehow their lack of enthusiasm for solar works its way all the way up to the top executives and the board.
Power company executives say homeowners should not get a solar power credit at the same rate they get charged. Instead, they should get a wholesale rate, which is much lower. The wholesale rate is half the retail rate.
What power company executives should be explaining is why the retail rate is twice the wholesale rate. In other words, why is the power company marking up the electricity cost 100 percent? Much of that cost is bloated administrative costs caused by the regulated monopoly world in which power companies exist.
The PSC reached a good compromise with Entergy and Mississippi Power halfway between the retail and the wholesale rate. The rural power cooperatives should follow the same net metering rules. Instead, House Bill 1139, page 22 exempts the co-ops from the PSC's net metering requirements.
regulated monopolies work poorly. The regulators are supposed to ride herd on the monopoly and protect the consumer, but the regulators quickly get sucked into the agenda of the monopoly. It's always been that way.
Worst case, the monopoly just bribes the regulators. Mississippi history has several examples. Other times, the monopoly just overwhelms the regulators with complexity. This works especially well when the regulators, elected politicians, lack the necessary expertise.
The jobs at the regulated company pay far better than the jobs at the regulating agency, so everybody stays friendly and collegial. You often see regulatory staff taking positions at the company they once regulated. This undermines the system.
Remember when the airlines and long distance were regulated monopolies? We had high prices and little choice. Deregulation improved things dramatically.
It may make sense to have the transmission lines as a regulated monopoly. But many states, such as Texas, let homeowners choose which power plant supplies their electricity. That way, consumers can get the lowest cost of electricity. That's not the way we do it in Mississippi. Here, we have a pure regulated monopoly and there's little talk of change.
Net metering with residential rooftop solar panels would be a step toward moving away from the power supply monopoly. The co-ops should be embracing net metering, not running to the Legislature for more protection.