FTC gets earful from lawmakers, consumer groups, companies

Source: Christa Marshall, E&E reporter • Posted: Wednesday, August 24, 2016

A Federal Trade Commission summit spawned charges and countercharges this summer about how utilities and solar companies are treating customers.

The comment period ended yesterday for FTC’s June 21 solar workshop, which examined competition and consumer protection in the renewable-energy sector.

The commission doesn’t have to take action, but it’s also not precluded from issuing new guidance or regulations as a result of the event.

Among those who weighed in: Senate Minority Leader Harry Reid (D-Nev.), who urged FTC to “closely consider the market barriers to [distributed generation] that utilities are erecting and lobbying state regulators to impose.”

Reid’s home state has been the focus point of national arguments about net metering, after the Nevada Public Utilities Commission last year slashed compensation amounts for residents with solar panels generating excess power to the grid. Installers like SolarCity later abandoned the state market.

Reid charged that the outcome in Nevada was not an accident but the result of a national campaign by utilities to dampen competition from rooftop solar. “Utilities in Nevada and other states have made deceptive statements that exaggerate the costs and disregard the benefits of distributed generation,” he wrote.

In its own comments, the Edison Electric Institute did not address Reid directly but outlined many of the industry’s concerns with rooftop solar policy in some states. The institute said compensation to rooftop customers can be too high, resulting in an “anti-consumer” policy that can transfer costs to utilities and non-solar customers.

“Some members of the solar industry seek rules that would increase their companies’ profits at the expense of equally environmentally-friendly, but more efficient, alternatives and would subsidize private solar consumers at the expense of those less well-off,” EEI said.

Several state attorneys general, the U.S. Chamber of Commerce, state lawmakers, universities and the solar industry also provided comments.

The Solar Energy Industries Association, for example, echoed Reid’s remarks, arguing that many utilities are using “anticompetitive” behaviors and taking advantage of their market position to stifle competition for rooftop solar companies.

Earlier this year, Rep. Yvette Clarke (D-N.Y.) warned FTC of a “growing problem” of deceptive marketing practices by segments of the solar industry (E&E Daily, June 8).

Yesterday, the advocacy group Public Citizen further called on FTC to ban what it termed “rip-off clauses” preventing consumers from taking solar companies to court if they engage in abusive practices.

The group sampled solar leasing contracts from companies like SolarCity and determined that many contain mandatory arbitration clauses that require disputes to be settled in an arbitration process rather than a court.

As solar leasing companies are not regulated by state utility commissions, the group said it is “critically important” that solar consumers have legal recourse available to them. It cites cases where consumers could be put at legal and financial risk, including if a state changes its net-metering policies and alters how much consumers are compensated.

“These mandatory arbitration clauses, when combined with the lack of effective state utility regulatory oversight, expose consumers to unnecessary harm,” wrote Tyson Slocum, energy program director at Public Citizen.

But Dan Whitten, SEIA’s vice president of communications, said customers have legal recourse through arbitration. Those types of contracts are not unique to the solar industry and are common in many other industries, he said.

“It’s very important to us that consumers fully understand their contracts, including any arbitration or other legal clauses,” Whitten said. “This is of paramount importance to us.”