Let The Sun Shine In.

A conversation has begun around the Capitol and across the state about new solar legislation by Rep. Rusty Kidd that I’ve co-sponsored: HB657, the Rural Georgia Recovery and Solar Resource Act of 2014. As readers of this blog know, I’m a fan of competition and using new technologies to solve problems and improve our lives.

In a nutshell, HB657 opens up the solar market for competition to lower rates for consumers. It does this by allowing a new solar provider to provide customers a competitive alternative for solar energy. More home-grown solar energy here in Georgia will also create jobs by helping a growing industry thrive within our state (rather than going to Tennessee and North Carolina for business). HB657 requires competitive bidding for construction of new solar projects by private companies, ensuring that free-market capitalism will drive down costs and deliver real price-savings to customers.

To put it in perspective, the energy that falls on Georgia every year in the form of sunlight is equivalent to over 3 billion barrels of oil. According to the University of Arizona, our state is fifth best for the direct use of solar energy out of the 50 states. Unfortunately, we rank 38th in actual solar installations. The sun is a resource in our state (much as oil is to Texas and natural gas is to the Plains states) and solar radiation is a commodity that Georgians should be leveraging, especially to shore up rural economies. The capital projects selected via competitive bids under the direction of the PSC take place in rural Georgia where we have available land and counties looking to shore up withered tax digests.

I’m proud that this bill addresses the high unemployment and lack of economic mobility in our rural counties. Hundreds of millions of dollars in investment would go into rural areas all over our state if HB657 is enacted, where coal plants are being shut down, where manufacturing operations have left for other countries, and where people are looking for jobs.

To clear up some misinformation floating around out there, no state money would be allocated under HB657. There are no mandates for solar deployment and the program is voluntary for Georgia Power customers only. And unlike Solyndra and Plant Vogtle, there are no federal loan guarantees. Due to laws on the books regarding territorial rights, Electric Membership Cooperatives and Municipalities do not fall under the jurisdiction of HB657 so the legislation only applies to Georgia Power.

I appreciate that Georgia Power has recently moved forward with a 210 MW solar program. Unfortunately, this project would represent one-quarter of 1% of the company’s annual energy needs at a price that Georgia Power says will cause “no upward pressure on electric rates.” HB657 would actually go further and lower electric rates. And once that 210 MW program is over, there are no additional plans in the pipeline for the utility to move forward with more solar projects that would reduce Georgia Power customer bills.

Here’s the bottom line: HB657 would only deploy solar projects in our state if they 1) are economically-viable, 2) compensate Georgia Power for accessing the grid and transmitting energy, and 3) lower electricity rates for Georgia Power customers who voluntarily participate. We can and should do our part to become increasingly energy independent and reliant on low cost fuels.

11 comments

  1. Charlie says:

    Here’s the problem. You use the word competition but this appears to be yet another venture under Georgia Power, and subservient to the same monopoly power structure that Georgia Power holds over both its customers and the general assembly.

    Last year, when an actual bill was proposed to bring competition to solar by allowing third parties to enter into long term finance contracts for individuals to buy and install their own solar power grids, solar was evil, inefficient, and a threat to Georgia Power’s ability to provide reliable service.

    Under this plan that Georgia Power can control, solar is good, technologically proficient, and the sign of a healthy competitive market so long as it is provided with the permission of a monopoly.

    I prefer last year’s bill to get Georgia in the sunshine business. This is yet another attempt for Georgia Power to protect its own monopoly, not an attempt to make sure Georgia gets all it can from solar.

    • greencracker says:

      As I understand it, yes, this bill would indeed create monopolies, aka, utilities for solar in each given area.

      As it was explained to me, the rationale for the bill’s asking the PSC to designate “community solar providers” each with a set territory, is the same reason Georgia Power and the EMCs and MEAGs have geographical monopolies: the state grants them a monopoly in return for providing an life-or-death important and capital-intensive service. That guaranteed monopoly, guaranteed demand, makes it economically possible to set up things like power grids.

      So the argument goes re: utilities.

      For the most interesting. book. ever. on utility policy, may I recommend The Master Switch by Tim Wu: http://timwu.org

      • Charlie says:

        OK, misunderstanding by me. This isn’t the proposal for GA Power to develop its own solar farms, but instead is adding another regulated monopoly to the power production mix.

        I still want the other bill allowing third party financiers to own solar grids on private property. I’ll remain neutral on this one and defer to those who know more about it.

        • I too want to see the third party power purchase agreements legalized. I see parts of this bill that seem like they could be referencing that type of arrangement (recognizing the community solar providers as customer generators), but it’s the billing arrangements that I’m having a hard time following. The language of the bill perhaps is just a bit muddy in my mind. As well, it sounds like the minimum threshold isn’t clear. Does the Commission set it, or does it fall under the 0.2% part that the rest of the customer generators fall under?

      • greencracker says:

        I think it’s an interesting question, utilities … should there be a public monopoly like there is on water? A private monopoly like there is on electricity? Or something else?

        And then, and then: should broadband be a utility, something as important as electricity, water and phone?

    • The previous link posted by Dr. Jay leads to a YouTube video of Pebbles and Bamm Bamm singing “Let The Sunshine In.”

      This message brought to you by the Society for Open Platform Principled Peach Pundit Posting, Inc., LLC, Ph.D. (S.O.P.P.P.P.P.I.L.P)

  2. Hmmm. I’ve been a bit busy with other things and haven’t taken the time to actually read the bill until now. So far, I too prefer last year’s bill, though I’m not sure to what extent this bill actually protects GP, as Charlie mentioned. Here’s one concern…

    “(2) Determine the processes that will be used to set long-term targets for total solar electric generating capacity and electricity generated by residents and ratepayers in this state, including minimum amounts of electric energy that an electric utility must purchase from the community solar provider;”

    So essentially, the Commission could set a minimum for GP to purchase that perhaps is less than what the solar utility actually produces. Do you think GP is going to proactively purchase more than the minimum? As well, taking into account the Commission’s previous actions, couldn’t the Commission set this minimum threshold way below the amounts actually produced by a community solar provider? (I’d hate to see a community solar provider go out of business because GP decides to only purchase 25% of the electricity they’re able to generate. In those instances, what is the solar utility supposed to do with the excess electricity generated… bottle it up and send it to Florida?)

    “(a) An electric service provider will shall only be required to purchase energy as specified
    309 in Code Section 46-3-55 from an eligible customer generator on a first-come, first-served
    310 basis until the cumulative generating capacity of all renewable energy sources equals 0.2
    311 percent of the utility’s annual peak demand in the previous year; provided, however, that
    312 no electric service provider will shall be required to purchase such energy at a price above
    313 avoided energy cost unless that amount of energy has been subscribed under any renewable
    314 energy program.
    315 (b) Once the capacity is subscribed, an electric service provider may purchase energy from
    316 an eligible customer generator at a cost of energy as defined for a utility by the
    317 commission, in the case of an electric utility, or by the appropriate governing body, in the
    318 case of any other electric service provider or electric supplier”

    Again, there’s the “shall” for purchasing up to 0.2 percent, and then after that, the utility “may” purchase.

    Perhaps I’m just not reading it correctly or a misunderstanding what I’m reading, but overall it appears to me that the bill just over complicates things.

    • dblhoya says:

      David–The part of the bill your citing is actually text from the existing cogeneration statute in Title 46, which is included in the bill to show where it is amending the current language. The meat of the bill is letting the PSC go beyond what’s already in that law, but use the current structure as the must-take purchase mechanism for some larger amount than Georgia Power’s buying now. I agree it does seem to be a complicated approach as far as the drafting goes, but they probably decided to do that because the more straightforward solutions aren’t going anywhere politically. So it’s basically a workaround to give the PSC more tools to expand solar, without trying to upend the existing monopoly system, as someone else rightly points out above.

      It doesn’t have to be an either/or option between this and legalizing third-party PPAs, or imposing a renewable portfolio standard, or whatever other legislation some of us would like to see enacted in Georgia. But it’s probably worth doing on its own if its something the PSC supports and wants the ability to do.

  3. James says:

    Charlie, your skepticism is warranted in this case. This sounds like yet another proposal where the legislature thinks we won’t notice the reinforcement of existing monopolies if they throw the word “competition” into the bill.

    Buzz, what say you? Any response to these criticisms? And what do you think about third-party ownership of solar farms?

  4. Whoa, who is determining these compensations that are listed in 46-3-66 (5)? This bill appears to heavily disfavor the “community solar providers.”

    (5) Require the community solar provider and any electric utility to make payments, and to hold funds in reserve to cover the cost of such payments, as appropriate, for:

    (A) Compensation to electric utilities and other affected companies by the community solar provider for unrecovered, prudently incurred costs identified pursuant to this Code section;

    (B) Compensation to the community solar provider by an electric utility for any unrecovered value of attributes or allowances associated with community solar facilities used to offset environmental compliance costs for electric utilities or to otherwise achieve savings for electric utilities;

    (C) Compensation to the community solar provider by an electric utility for other cost savings and offsets resulting from solar energy production under the rural community solar initiative, where such savings or offsets accrue to the benefit of an electric utility or customers who are not subscribers;

    (D) Charges to the community solar provider for the expenses to the commission of conducting proceedings related to the rural community solar initiative or for any expert testimony and assistance that is reasonably necessary for issues relating to the deployment of solar generation facilities in Georgia;

    (E) Compensation to the state by the community solar provider for the valuable use and enjoyment of solar energy in this state; and

    (F) Rate-reduction refunds to subscribers by the community solar provider, which shall be designed to pass through to subscribers any cost savings realized by the community solar provider resulting from declining costs of solar energy production and which shall be paid from any surplus profits earned by the community solar provider beyond a rate of return approved by the commission for the community solar provider’s activities under the rural community solar initiative.

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