The tag line of a new website targeting the major investor-owned utility American Electric Power reads: “AEP: Overcharging you for electricity so they can buy politicians to kill competition.”
The Alliance for Solar Choice (TASC), a downstream solar advocacy group whose members include SolarCity, Solar Universe, Sungevity, Sunrun, and Verengo, launched the provocative site last week to highlight what it sees as the utility’s “shady tactics” to stifle competition from the solar industry.
As proof that AEP is running a national campaign against consumer choice, the website points to recent lobbying expenditures, proposed rate increases in AEP territory, executive compensation, and the utility’s request for guaranteed income to run its coal-burning plants in Ohio.
“They’ve been using the same tactics in every state where utilities are trying to make sure the policies are fair for all customers who use the grid,” said Tammy Ridout, AEP spokesperson, in response to the TASC-backed website.
“I think it’s a misrepresentation of what the issue is all about,” she said. “They position the issue as the big, bad utility against homeowners who just want to have solar on their roofs, but that’s not really who these groups represent. [...] These groups are trying to prevent the elimination of the outdated polices that support their businesses. They represent the solar developers and advocacy groups and not necessarily the solar customers in our service territory.”
As the solar industry continues to grow, clashes over rates and solar policies are cropping up across the United States. The latest confrontation is unfolding in Arizona, where the Salt River Project’s (SRP) elected board recently approved a roughly $50 monthly fee on solar customers. In response, SolarCity launched a lawsuit against what it called SRP’s “anti-competitive” actions.
A major public fight erupted in Arizona last year when Arizona Public Service (APS) proposed increasing fees on solar customers. Millions of dollars were spent on advertisements and lobbying in the net metering battle, with utilities far outspending solar companies -- $3.7 million versus $436,000, according to a tally from the Arizona Republic.
TASC is now calling AEP the “APS of the East.” According to Bryan Miller, co-chair of TASC and vice president of public policy and power markets for Sunrun, AEP is working to craft legislation that prevents regulators from considering the benefits of solar while setting rates.
“It’s fine to have legitimate policy debates on the relative benefits and costs of solar or AEP's subsidized coal plants,” he said. “But the idea that AEP gets to be the thought police and tell legislators they can’t consider any benefits at all from solar is outrageous.”
Miller referred to a specific piece of net metering legislation in West Virginia that required regulators to consider “the practice of charging costs directly incurred by the electric utility in accommodating a net metering system.” Ultimately, the bill was vetoed by Governor Earl Ray Tomblin. In Indiana, similar legislation recently died in the House of Representatives.
AEP is not anti-renewable energy, said Ridout. The utility has nearly 2,200 megawatts of wind and solar. Indiana Michigan Power, an operating unit of AEP, announced last month it is building five solar projects with a combined capacity of 16 megawatts.
“I am sure there can be benefits to solar, but the grid was not built to accommodate these changes that are happening,” said Ridout.
“We are making significant investments in the grid to make sure that the system can continue to be reliable and support further integration of not only rooftop solar and other distributed generation, but also utility-scale renewable projects,” she said.
In order to support these investments, outdated policies that give preferential treatment to solar customers must be changed, Ridout added.
Ohio rejects AEP's subsidized coal plant proposal
Today, there are relatively few rooftop solar customers in the 11 states in which AEP operates. Of AEP’s more than 5.3 million customers, the utility has just 73 and 74 net metered residential customers in West Virginia and Indiana, respectively. The utility has fewer than 35 net metered customers in Michigan, Tennessee and Kentucky combined.
Given that solar is so nascent in these states, it’s unlikely to be harming the grid. When asked why AEP was campaigning for policy change in such markets, Ridout said that while solar is only just starting to take off in some states, the regional grid is already changing, and the costs of those changes need to be borne by all who use it.
“The grid operates on a regional basis, so it doesn’t stop at state lines,” she said. “Changes need to be made now to the grid to make it so distributed generation can continue to grow.”
A more contentious point for some is that AEP is opposing incentives for solar while requesting public support for its coal plants.
Last week, the Public Utilities Commission of Ohio (PUCO) rejected AEP’s controversial proposal seeking guaranteed income for one of its coal-fired power plants. Consumer and environmental groups opposed the plan, claiming that it would put the risk of the costly, aging plants on ratepayers.
AEP claimed the move would give ratepayers more control of their energy and, in the long run, provide a net benefit of $8.4 million. Opposition groups asserted the plants could cost Ohio residents and businesses more than $100 million.
“Ohio has been through a process of moving to a competitive market, so the proposal was one way to address what could be a big problem in the state when a lot of generation is shut down and we’re going to have to start importing power into the state,” said Ridout.
AEP has not determined how it will proceed with the coal plant proposal, she said. Duke Energy and FirstEnergy have similar proposals pending before PUCO. AEP is also exploring options for selling off its coal plants.
“This is a desperate company, in a desperate financial situation, seeking desperate things,” said TASC's Miller.
TASC claims that AEP has bought politicians to protect its “fossil fuel monopolies.” The group has homed in on Oklahoma politician Mike Turner, who supported state legislation for higher fixed charges on solar customers, and then went on to lose his bid for Congress. TASC released a video calling attacks on solar policies toxic to lawmakers.
But while Turner sought to increase solar fees, the 27-year-old Congressional hopeful, whose campaign was backed by his parents, also introduced a bill to ban all marriages in Oklahoma and claimed to have business experience that media outlets could not substantiate. So it’s reasonable to contend that his stance on solar might not have been the only reason he wasn’t elected.
Ridout called TASC’s allegations that the utility is buying politicians “ridiculous.”
“We obviously work with commissioners and commission staff in all of our states to try to do what’s best for customers,” she said. “We also educate lawmakers on the issues, just like any other company.”
While some states, such as South Carolina, have found ways for utilities and the solar industry to work together, clashes over solar policies are likely to intensify in many parts of the country this year. As factions on both sides of the debate resort to hard-line tactics and smear campaigns, ratepayers are struck in middle grappling with conflicting information.