What’s in a ‘subsidy’? Fla. may soon find out

Source: Kristi E. Swartz, E&E reporter • Posted: Friday, January 15, 2016

TALLAHASSEE — A utility-backed constitutional amendment for rooftop solar is just 75,000 signatures away from the threshold it needs to go before Florida voters in November.

But if there’s any new policy to expand Florida’s rooftop solar market, then taxes, fees or a redesign of customer rates are certain to follow.

That is what the state’s electric companies and other supporters of a proposal to expand consumer solar options said in briefs filed with the Florida Supreme Court earlier this week. The court must ensure that the measure meets certain legal requirements before being placed on the ballot, but the initiative also needs 683,149 valid signatures by Feb. 1.

The Consumers for Smart Solar amendment has 607,928 valid signatures as of yesterday, according to the state’s elections division.

The measure would let Floridians own or lease solar panels at their home or business, something that is already allowed by law. The key change is that the proposal tees up state and local governments to protect non-solar customers from paying more in their monthly electric bills while solar users enjoy lower ones.

“All of its provisions are directly connected to the purpose of protecting the rights of consumers in the use of solar generating equipment,” lawyers for Consumers for Smart Solar wrote in their state Supreme Court brief.

The most common method of this is a backup tariff. Some electric companies in other states have proposed or required that rooftop solar users pay a tariff to cover the fixed costs of the grid when their panels aren’t working, such as at night or on rainy days.

The electric companies argue this is necessary because as more consumers migrate away from traditional electricity to generate their own, there are fewer customers to pay the monthly costs to maintain and operate the grid.

The argument has made for heated battles between electric utilities and solar companies across the nation. At the center of the debate is the word “subsidy.”

“Subsidies arise because solar equipment only produces electricity when the sun shines,” the coalition’s attorneys wrote.

The group launched its rooftop solar ballot proposal last July. It is heavily funded by Florida’s largest regulated electric companies and related industry organizations.

A brief from the state’s four regulated investor-owned utilities most directly laid the groundwork for additional policies that could come should voters approve this measure. The electric companies have been the most vocal in opposing rooftop solar, using the cost-shifting argument.

Broadly, however, electric utilities do not like customer-generated forms of electricity because it clashes with their business model and threatens what was once a guaranteed revenue stream.

“As more and more consumers turn to solar power as contemplated, it is inevitable that some existing regulations will require enforcement or that some additional regulations may be required,” wrote attorneys for Duke Energy Florida, Florida Power & Light Co., Gulf Power Co. and Tampa Electric Co.

All four companies have added or plan to add solar from large-scale arrays to their power grid. They’ve been willing to do so because it makes more economic sense.

The falling cost of solar has made the renewable fuel more economical for utilities and for individual customers. The utilities acknowledged this in their legal brief and said they expect the trend to continue as solar technology continues to improve.

The electric companies said they supported “fully and enthusiastically” the addition of solar but warned of “significant dislocations in the state’s electric grid and in unintended economic distortions” if there wasn’t any regulatory oversight. In other words, the state’s Public Service Commission is likely to get involved at some point.

Initiative attracts big bucks

The carefully worded ballot language is one more example of how closely Florida’s electric companies are trying to shape — or control, as clean energy advocates would argue — the state’s solar market. In fact, Consumers for Smart Solar formed as a response to another rooftop solar constitutional proposal backed by clean energy advocates and conservatives.

That measure was designed to open up the state’s market for solar and said that local governments and others could not create barriers to stop it.

Floridians for Solar Choice formally stopped its campaign for the 2016 ballot on Monday, saying it would focus on 2018 instead (EnergyWire, Jan. 12). The initiative passed the court hurdle, but coalition members said they were running out of time to obtain enough verified signatures by Feb. 1.

Millions of dollars separated the two campaigns, as well. Consumers for Smart Solar has received nearly $7 million in funds through the end of the year, according to the latest figures from the state’s elections division. That’s even with a marked slowdown in contributions in December.

Floridians for Solar Choice has a little more than $2 million, most of which is coming from the political arm of the Southern Alliance for Clean Energy.

Frustrated with the state Legislature’s failure to entertain any bills on rooftop solar, Floridians for Solar Choice decided roughly a year ago to take the issue to voters. The coalition filed a brief Monday as another attempt to make sure Consumers for Smart Solar’s initiative fails in the courts.

Chiefly, lawyers for the coalition said that local governments typically don’t have the power to regulate electricity rates. The PSC is in charge of that, they argued.

“Because of these false implications, the voter may be tricked into believing that he or she must vote in favor of the Proposed Solar Amendment to preserve a ‘power’ of local government that does not exist,” the brief states.

Floridians for Solar Choice also challenged the idea that consumers who put solar on their roofs only can do so if they receive subsidies. Such language is misleading, the group’s attorneys wrote.