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Monday, 30 December 2013 09:28

Monopolistic Utilities Know Renewable Energy Will Cut Their Profits, So They Stall It

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atransm12 30There's one overhwelming dirigible-size reason for-profit (and often monopolistic) utility companies -- that transmit and sell most of America's energy -- generally discourage, if not crush, residential solar (and other renewable) energy: fear of large scale loss of profit.

Last Friday, I wrote a commentary on a Hawaii for-profit electrical utility company that was taking new measures to dampen the selling (called "net metering" in the industry) of excessive solar energy back for distribution to other utility customers. The commentary was entitled, "Booming Solar Energy Halted by Hawaii Utility Because Sun Produces Too Much Power!" 

The BuzzFlash at Truthout column was based on information provided in a Scientific American (no bastion of leftist bias) article entitled, "A Solar Boom So Successful, It's Been Halted: Photovoltaics proved so successful in Hawaii that the local utility, HECO, has instituted policies to block further expansion." Thus far, the BuzzFlash at Truthout commentary has received 11,000 Facebook likes and a lot of shocked readers. 

However, there was a small number of alleged electrical engineers (and they may have very well been, instead of paid company shills which has become a common and legal practice in comments sections) who objected to both the Scientific American article and the BF/TO account of it.  They argued that "liberals" and "eco-types" don't know about how complicated and aged the electrical grids in the US generally are (although this was conceded in both the BF and Scientific American accounts).  That was the claim of the Hawaiian utility in question, HECO, which asserts on their website that they are avid supporters of renewable energy, just like Chevron or Shell does.

That's all very interesting, but -- on the whole -- for-profit utility companies were dragged kicking and screaming into the concept of allowing renewable households and industries to sell their excess energy back via transmission lines (known as hooking up to the grid). Why might you ask would a for-profit utility company be against households or industries becoming so successful in renewable energy that they are generating excess power?

Simply put, for every household or industry that becomes self-sustainable with renewable energy, the for-profit utility loses a customer, which is the same as saying losing profit.  For every renewable house or industry that uses net-metering to send excess energy over the transmission grid of the utility, the utility is losing both a customer and weakening its energy monopoly.

The primary and ossified model of electric utilities is centralized monopolization of energy transmission (which again only relatively recently has been challenged through both consumer and "electrical energy buyer" lobbies -- which is another issue largely unrelated to renewables). Furthermore, as "Solartopia" author Harvey Wasserman notes, the utilities are members of the same industrial fraternity as the fossil fuel and nuclear plant generators -- sometimes doubling up as in the case of utility-owned nuclear power plants.

The goal of utility companies, on the whole, is to work to ensure that a new model of decentralized renewable energy distribution does not emerge.  If it did, the for-profit utility companies that get their way in so many state legislatures, not to mention favors from the federal government, would become extinct.

Their only hope to survive in the longterm is to monopolize the power grid long enough to build renewable energy sources that they own and distribute -- and only, for the most part, when they run out of fossil fuel (if the earth is still around) -- and that do not come from external sources such as solar-equipped businesses and homes.  Only a few utilities have begun to understand this and start weaning themselves off of fossil fuel, but in the meantime they need to keep homes and businesses from independently establishing renewable electrical cooperatives -- and the way to do that -- they think -- is to stop current customers from converting to independent renewable energy.

That's the story, whatever shills for the industry or technocrat electrical engineers might say. It's an issue of the private good versus the public good: profit vs. what benefits the public commons and life on earth.

As evidence of this theory, there is a utility in Vermont that is breaking from the pack. According to the Burlington Free Press, "Solar Electric Power Association names Vermont's Green Mountain Power 'Utility of the Year'.":

Throughout its territory, GMP [Green Mountain Power] credits customers (at the retail rate, plus 6 cents per kilowatt hour) for their contributions to its grid — a process known as net-metering.

Unlike GMP, several other Vermont utilities have limited net metering, citing an increased shift of maintenance costs to customers without solar arrays.

Mary Powell, GMP’s president and CEO, touts her utility’s approach as a sound, long-term investment: as a hedge against increased transmission costs; and as insurance against costly spot-market purchases during summer spikes in demand.

“"While many utilities see solar generation as a threat to their business, we see solar as an opportunity to cost effectively fulfill customer wants and needs and support new jobs and businesses in our communities,” Powell wrote in a prepared statement. “Rather than fear solar, as many utilities appear to do, we embrace it.” (Italics inserted by BuzzFlash.)

Unfortunately, Green Mountain Power is by far an exception to the rule of electrical companies that monopolize power through the use of fossil fuel -- and will continue to do so as long as it yields a solid profit through consumer fees that are frequently raised by obliging state legislatures. 

(Photo: theclyde)