Trouble In Paradise

You may have read about the “power struggle” in Oahu, Hawaii where the number of photovoltaic solar collectors, combined with other renewables, is now generating 200 megawatts of energy that the antiquated electric grid cannot handle. Or so say those who own the power companies. They worry about sudden power surges that will endanger their equipment and the appliances their customers depend upon. The problem is one that may face the rest of the nation in the future if  more and more people buy into alternative energy and the power companies must upgrade their equipment. Those companies will, of course, pass the costs along to their customers: we know they will not let it affect their bottom line. As a recent story on Yahoo News tells us:

What’s happening in Hawaii is a sign of battles to come in the rest of the United States, solar industry and electric utility executives said. The conflict is the latest variation on what was a controversial issue this year in top solar markets California and Arizona. It was a hot topic at a solar industry conference last week: how to foster the growth of rooftop solar power while easing the concerns of regulated utilities that see its rise as a threat.

The problem in Oahu is considerably more intense than it is elsewhere in this country as 40% of the homeowners on that island have rooftop collectors — as contrasted with 1.4% in California, the state with the next highest proportion of collectors in the country. But the point is that the power companies on the mainland are getting nervous about the loss of income, including increasing payouts they will suffer as more and more people generate their own electricity and sell back to the power companies the electricity they cannot use themselves.

The problem, of course, is that the power companies have the political clout to get laws passed that assure their continued profits — as was the case in Oahu where new customers will have to pay a surcharge to the power companies in order to get permission to install solar collectors in the future. The problem may be very real in Oahu where so many folks have chosen to go the way of alternative energy, but it is a small problem on this continent where so few people have made the same choice. None the less, we can still brace ourselves for the coming battles as sensible people who choose to help to save the planet, and save their electrical costs at the same time, ward off the slings and arrows of the power companies that have very full quivers.


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.