You Want Solar? Swear Fealty to the Monopoly
The push to create retail electricity choice about to start in Virginia is already fully underway in Florida, with the dominant utility there first proposing and then abandoning a stunning opposition tactic. It wanted to offer an attractive solar option only to customers loyal to its monopoly.
The recent Miami Herald story (here), accompanied by a long video clip from a June regulatory meeting on the issue, is in the past tense because Florida Power and Light (FPL) quickly retreated under pressure.
It’s SolarTogether program is a utility-sponsored community solar approach, open to commercial and residential customer wanting to tap into a wide network of new solar farms. It is likely to produce lower costs overall for participants. But to join, customers would have had to support “continuity of the program”, which FPL claims would have to discontinue under a deregulated market structure. As quoted by the Herald:
“While FPL’s SolarTogether program is poised to be the largest voluntary community solar offering in the United States, participation is limited to the capacity we’re approved to build,” the FPL spokesman said in a statement. “We have felt it would be unfair to allow customers — such as large businesses — to enroll in the program that may take subsequent actions which would work against program goals and potentially impose more costs on other customers.”
And: At an informal meeting hosted by the PSC on June 5, FPL’s Vice President of Development Matt Valle said that “advocating for a position that would unravel this program for anyone who is a subscriber seems to be talking out of both sides of your mouth. If you want to advocate for that position, that’s fine, but you shouldn’t be in the voluntary program.”
Under questioning on the video, company spokesmen said it would not be digging into people’s social media accounts or conducting some “Spanish Inquisition” (their words) to discover who was working for customer choice. But signing a ballot initiative petition or engaging in open advocacy for choice would prevent enrollment by either residential customers or, more threatening to FPL, larger commercial users.
Florida advocates are seeking to put retail choice before Florida voters in the middle of the huge 2020 vote turnout, using a petition process allowed by Florida law. The Virginia Energy Reform Coalition, with a similar goal and perhaps some overlapping financial backers, will have to work its way through the 2020 General Assembly.
The background material on the Florida group’s advocacy website makes the same claims that have started making the rounds here: up to $5 billion in retail savings per year, plus better service and innovation. It also points to the parts of Texas with retail choice as the example, citing evidence of success which might or might not translate to other markets.
The text that would be added to Florida’s constitution by the ballot question is here.
Ohio is another state often cited as a model for successful retail choice, and here is Direct Energy’s description of how things work there. Ohio moved to a deregulated model about the time Virginia started to, 1999, but unlike Virginia stood by the effort. Virginia returned to a form of regulation in 2007.
The Florida ballot question petition started after proponents failed to insert retail choice language during a state constitutional revision in 2018, a decision made by five members of a seven-member drafting subcommittee.
Who is paying the bills for the petition and public relations drive, which would have to be followed by a major mail and advertising and GOTV campaign before the vote in 16 months? You won’t find it on the website, although the various companies hoping to offer competitive supply are involved.
A similar fight in Nevada came to be a battle of corporate billionaires, Warren Buffet against Sheldon Adelson, as described by Politico. Buffet’s “no” campaign prevailed in 2018, reversing a vote in support of the proposal in 2016 that needed to pass a second time to take effect. Wrote Politico:
Buffett’s holding company, Berkshire Hathaway Energy, controls several large regulated utilities in the West, including PacifiCorp, which provides power to nearly 2 million customers in six states without having to compete against other power companies.
“One of the reasons Berkshire Hathaway is coming out with such force here in Nevada is because it’s not just about Nevada. They know these discussions are happening in other states too,” said Karen Wayland, the executive director of the Clean Energy Project in Nevada and former energy aide to Reid. The former senator is backing the amendment, but Wayland isn’t affiliated with either campaign.
Reading about the legislative and ballot initiative efforts in Nevada and Florida, with the huge amounts of customer revenue being fought over by the various business interests, has not changed my earlier conclusion that Virginia needs some changes to its process before starting down this road. But it is probably coming. Large amounts of money are in play and those who want to chase it or retain it are gathering fast. All swear protecting consumers is their first loyalty.
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