Rebuttal!

I recently (June 7th) posted a blog titled “Repercussions” dealing with the fact, as I supposed then, that the energy companies would be forced to raise the costs of energy to the poorer customers who cannot afford solar panels if the wealthier (and more socially aware) customers continue to go solar. It seemed reasonable to me at the time (it was based on a New York Times article, after all!), and I simply hoped aloud that the energy companies would have enough sense to realize that they should climb aboard the clean energy bandwagon and become part of the solution instead of remaining part of the problem. But it turns out I bought a line of rhetoric the energy companies themselves are spewing and I want to clear up the mess.

In an article online recently David Sirota deals directly with the claim summarized above:

Also misleading is the implicit notion that Big Energy would somehow be forced to jack up rates in order to recover the small amount of revenue allegedly lost to solar panel owners. A perusal of the profit margins of the fossil fuel and electric utility sector shows how absurd that idea is. These are the opposite of destitute industries subsisting on razor-thin margins; they have plenty of profit cushion to absorb an infinitesimal loss of revenue from solar panels. That means when they raise rates, they are protecting those eye-popping margins, not being forced into anything by any economic circumstance.

In a word, the energy companies will claim that they need to raise costs to poorer customers in order to try to justify future increases and create an atmosphere of doubt and confusion — as was the case in my blog. I daresay there may be higher costs to non-solar customers on their way but they are not necessary: they will be an attempt on the part of the power companies to profit from the situation and to weaken the clean energy industry. I should have known. Given the terrible track record of the large corporations when it comes to assaulting the environment and their fixation on increasing profits no matter what, it should have been obvious that their claim that rates will necessarily have to rise if people keep going solar is the little boy crying “wolf.” There is no wolf: there is simple greed and it is not new; we have grown used to it.

I do think it would be sound business for the energy companies to stop crying “wolf” and to get on board the solar and wind energy bandwagon. If Warren Buffett has enough confidence in the clean energy business to invest a good deal of his money, it would make sense for the energy companies to simply buy into the industry and become partners instead of trying to compete by means of deceit and deception — as when David K. Owens, executive vice president of the Edison Electric Institute announced publicly, “Low-income customers can’t put on solar panels – let’s be blunt. So why should a low-income customer have their rates go up for the benefit of someone who puts on a solar panel and wants to be credited the retail rate?” Sirota has a rejoinder:

. . . the utilities’ argument is first and foremost undermined by the reality of the consumer market for solar power. The fact is, many solar integrators are now offering  zero-dollars-down lease packages for homes to go solar — packages that save ratepayers money over the long haul and eliminate a major income barrier to going solar. Yes, it’s certainly true that one typically has to own a home (and thus a roof) to go solar, and that therefore home ownership unto itself is an income threshold. However, the blanket statement that “low income customers can’t put on solar panels” is, to say the least, misleading.

Deceit and deception seem to be matters of course for large corporations these days — anything in the name of profit.  But I will continue to hope that eventually some (at least) of the large companies will realize that ethics and business can be conjoined and need not be forever at loggerheads.

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4 thoughts on “Rebuttal!

  1. Of all the industries, issues — perhaps even more than health care — this is one I really believe the government should step in on much more firmly. As Sirota writes, it’s not like the oil companies are just scraping by and need to raise prices to break even or make minimal profits. Almost every quarter, Exxon Mobil and Chevron post record-setting PROFITS. They are booming, and on our backs! My father-in-law talks about price controls during World War II, needed simply to keep the homefront economy endurable. Why not treat the oil companies like we electrical and water — other essential utilities, in other words — and regulate them or make them municipally owned or owned by regional government agencies. Especially in the Midwest, affordable transportation is essential to the workforce, to shipping of goods, even to getting to places of medical care. It is a matter of national economic security.

  2. Good post. I watched Bill Maher last night and it was interesting to see the argument over fracking with Nick Gillespie,, the libertarian leaning author, and Mark Ruffalo, the actor. Ruffalo turned out to be quite the learned advocate against fracking, while Gillespie tended to use a lot of corporate supported information, which surprised me somewhat. Related to your point above, Ruffalo noted (so this is hearsay at this point), the Oil/ Gas Industry is using the same PR firm who promoted cigarette use and combatted the cancer linkage. To find the best data on fracking, you need to read newspaper and scientific articles where real homework has been done. The scary thing to all of us, there is so much money needed to get and stay elected, corporations will have even more clout than they ever did. So, we citizens and customers need to be even more vigilant which is hard.

    • So much money needed to be elected and stay in office — and so much available after Citizens United! Sad business, indeed. The best thing I have read on fracking was your blog! Thanks for the comment.

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