In his final State of the Union address last night, President Obama did not spend any time bragging about his signature environmental achievements, such as the Clean Power Plan or the Paris climate accord. Instead, he highlighted the need for a more flexible electric grid in order to accelerate America’s transition to a clean energy economy, noting that, “Rather than subsidize the past, we should invest in the future.”
But some climate deniers and industry leaders alike are stuck in the past, and do not share Obama’s enthusiasm for a clean energy future. They argue that this path will cost too much and have a devastating impact on our economy. We’ve heard this argument before, and it doesn’t hold true. Read More
Utility-scale solar and distributed solar both have an important role to play in reducing greenhouse emissions, and both have made great strides in the past year.
Utility-scale solar, the focus of this article, is reaching “grid parity” (i.e., cost equivalency) with traditional generation in more areas across the country. And solar received a major boost when the federal tax incentive was recently extended through 2021. The amount of the incentive decreases over time, but the solar industry may be able to offset the lower tax incentive if costs continue to decline. New changes in policy and technology may further boost its prospects.
Record year for utility-scale solar
Some of the world’s largest solar plants came on-line in the U.S. during the past year, such as the 550-megawatt (MW) Topaz Solar plant in San Luis Obispo County, California and the 550MW Desert Sunlight plant in Desert Center, California. Last year saw a record increase in the amount of new utility-scale solar photovoltaic generation installed – about four gigawatts (GW), a whopping 38 percent increase over 2013, and enough solar power to supply electricity to 1.2 million homes. This number is expected to increase in 2015 when the final numbers are in. Read More
Last week, the Public Utilities Commission of Ohio (PUCO) staff endorsed a four billion dollar bailout for FirstEnergy’s coal and nuclear plants. The new deal modifies FirstEnergy’s original proposal and, if approved, would prop up the Akron-based utility giant’s uneconomic power plants for the next eight years – making its customers foot the huge bill. Many parties oppose the deal, because it is unfair to customers and interferes with the state’s competitive energy market.
Importantly, FirstEnergy’s bailout is not only bad policy, it also violates federal law.
Ohio restructured its electricity market several years ago, so FirstEnergy’s plants have been operating in a competitive wholesale energy market. The market covers 13 states and power plants bid into an auction to supply electricity to the region, ensuring customers get the lowest electricity prices possible FirstEnergy’s power plants are losing money because they are old and inefficient, and can’t compete with newer, cleaner natural gas and renewable energy that deliver electricity at a lower cost. As a result, FirstEnergy has asked the PUCO for a bailout.
But electricity is sold across several states in the wholesale market, and so is subject to federal law. And federal law bars states from erecting protectionist barriers that harm competition. Read More
A recent study by the Lawrence Berkeley National Laboratory (LBNL) concludes that the way a utility charges customers can greatly influence whether they will install solar panels. It is a timely analysis because utilities across the country are redesigning their rate structures to accommodate our changing electricity system, which is becoming cleaner and more efficient than ever before.
What’s unfortunate is that some utilities are intentionally trying to destroy customers’ incentive to install solar panels. Why? Because rooftop solar reduces shareholder profits and revenue for utilities.
Solar Electric Power Association (SEPA), a solar industry trade group, reports that in 2014, residential customers installed solar panels at an astounding 36 percent growth rate compared to 2013. But the LBNL study says the rate design changes now being proposed by utilities across the country could slash solar panel growth up to 60 percent. Clearly, poorly designed rate changes could devastate the potential for solar panels to help transform the electricity sector. Regulators should not let this happen.
Utilities have the opportunity to change their rate design to provide incentives for more solar adoption while also recouping investments and properly balancing their books. Read More
FirstEnergy isn’t the only utility trying to stick Ohioans with the cost of its poor business decisions.
AEP Ohio has also presented a similar proposal to bail out several old, uneconomic coal plants, asking the Public Utilities Commission of Ohio (PUCO) to guarantee the purchase of power produced by its coal plants. The utility tried the same tactic earlier this year and failed, but is now back with an updated proposal. Last week, Environmental Defense Fund (EDF) filed testimony opposing the deal and recommended that AEP Ohio should invest in grid upgrades if the PUCO decides to approve AEP Ohio’s proposal.
Ohio has a competitive retail electric market, meaning customers can buy electricity from many different sellers. But utilities still have a monopoly when it comes to service territories. So if you live in AEP Ohio’s territory, the company will deliver your electricity – even if you purchase it from a different provider. Since AEP Ohio’s bailout proposal applies to its entire service area, essentially the utility wants to force all of those customers to pay for its coal plants, including those who don’t buy their electricity from AEP Ohio. Read More
In a long-awaited hearing which began last week, Ohio’s largest utility is seeking approval for a rate hike of $3 billion. FirstEnegy is asking the Public Utilities Commission (PUCO) to force customers to pay for its old, dirty, uneconomic coal plants and a nearly-expired nuclear plant.
Although there are many reasons to oppose the bailout proposal, one key objection is that FirstEnergy’s sister company – FirstEnergy Solutions – owns these power plants. Rather than undertaking a competitive bid to find the best deal and most affordable prices available, FirstEnergy agreed to buy the power from FirstEnergy Solutions. Imagine if the owner of your company forced you and every employee to buy expensive health insurance from their cousin, even though you could easily get a better price if you shopped around.
If this sounds bad, it gets worse – this isn’t the first time FirstEnergy has tried this tactic. The utility did the same thing in 2013, and the PUCO slammed FirstEnergy for doing so. This is just a case of déjà vu all over again, and FirstEnergy should expect the same result. Read More