The Koch Brothers’ Dirty War on Solar Power
The rise of distributed solar power poses a triple threat to these monopoly gains. First: When homeowners install their own solar panels, it means the utilities build fewer power plants, and investors miss out on a chance to profit. Second: Solar homes buy less electricity from the grid; utilities lose out on recurring profits from power sales. Third: Under “net metering” laws, most utilities have to pay rooftop solar producers for the excess power they feed onto the grid. In short, rooftop solar transforms a utility’s traditional consumers into business rivals.
The surge of solar competition has caught the nation’s dirty-power generators flat-footed: The utility trade group Edison Electric Institute (EEI) warns that rooftop solar could do to the utility industry what digital photography did to Kodak, bringing potentially “irreparable damages to revenues and growth prospects.”
Few industries are worse equipped to deal with disruption than power utilities. Their profits depend on infrastructure investments that pay off over a generation or more. “Utilities are structured to be in stasis,” says Zach Lyman, partner at Reluminati, an energy consultancy in Washington, D.C. “When you get fully disrupted, you’ve got to find a new model. But utilities are not designed to move to new models; they never were. So they play an obstructionist role.”
The Sunshine State is a gold mine for its monopoly IOUs. Air conditioning drives the second-highest electrical consumption in the nation; the average Florida household spends $1,900 a year on power – 40 percent more than the national average. Fossil fuel dominates electricity generation: Florida is 61 percent dependent on natural gas, followed by coal at 23 percent. Solar makes up less than one percent of the state’s energy mix.
Key policies that have spurred a rooftop solar revolution elsewhere in America are absent or actually illegal in Florida. Unlike the majority of states, even Texas, Florida has no mandate to generate any portion of its electricity from renewable power. Worse, the state’s restrictive monopoly utility law forbids anyone but the power companies from buying and selling electricity. Landlords cannot sell power from solar panels to tenants. Popular solar leasing programs like those offered by SolarCity and Sunrun are outlawed. Rooftop solar is limited to those who can afford the upfront expense; as a result, fewer than 9,000 Florida homes have panels installed.
Florida’s anti-solar policies are zealously defended in Tallahassee. “It’s no secret we play an active role in public policy,” says Mark Bubriski, spokesman for Florida Power & Light (FPL), the largest IOU in the state. FPL is the monopoly power provider for 4.8 million customers, whose electric bills generated $1.65 billion in profit for the company last year.
The utilities are top political donors in Florida. Since 2004, the state’s four largest IOUs contributed at least $18 million to state politicians and political committees – a preponderance to Republicans, who now control state government. In addition, since 2007, the companies spent at least $12 million on lobbying, employing an average of one lobbyist for every two legislators in Tallahassee. “They’ve got a pretty good harness on the whole deal up there,” says Crist.
The capital city of Florida is more “Southern Gothic” than “South Beach.” Tucked away on Florida’s panhandle, Tallahassee is a slow-walking city of whitewashed churches, wide verandas and dusky oaks, draped with Spanish moss. Nothing from its outward appearance would suggest this city of 190,000 is the seat of power for a state whose economy rivals Indonesia‘s.
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