The Tennessee Valley Authority produced a recent study that found the premium it pays to solar energy producers is about 67 percent higher than solar’s actual value (about 12 cents per kilowatt versus 7.2 cents/kw). As reported in the Chattanooga Times Free Press, TVA already has cut premiums it pays to small-scale solar producers in four successive years.
Astute readers will recall that, in North Carolina, Duke Energy this year requested to pay solar producers 15 percent less. Those readers will also remember a big reason: falling prices for natural gas.
No doubt they would recall that traditional-fuel prices had fallen at a greater rate than the costs imposed upon Duke by the state’s renewable energy and energy efficiency portfolio standards (REPS) mandate had risen — so the net effect was a rate decrease owing to traditional energy sources in spite of higher renewable energy costs.
Of course, they’ll remember how the very vocal renewable energy lobby reacted to that news. I refer to the ones who have mastered the art of telling legislators with a straight face that unsustainable, costly, unreliable, intermittent, inefficient renewable energy is actually cutting electricity costs and that people’s electricity bills are “Better Off With REPS.”
They interrupted their solar-leads-to-lower-electricity-rates lobbying whoppers to object to lowering electricity rates, because it would harm solar. As the Charlotte Observer reported:
The N.C. Sustainable Energy Association, which promotes green energy, said lower rates “will make it more difficult for developers to finance clean energy projects.”
Meanwhile, in Tennessee, environmentalists complained about the TVA report and desired a greater premium for solar, like Georgia’s (13 cents/kw, which would be about 180 percent of solar’s value per the TVA), or North Carolina’s “generous” tax incentives for solar installations — which the General Assembly wisely allowed to sunset, years and years after they originally were slated to do so.
One whinged that the TVA’s top responsibilities were “economic development and environmental stewardship.” That complaint — “TVA as a public power utility with a mandate for economic development and environmental stewardship should be a leader in renewable energy, not a laggard behind neighboring states like Georgia and North Carolina” — came from “Amanda Garcia, a staff attorney for the Southern Environmental Law Center.”
Garcia is reported to have served on “one of the stakeholder groups that reviewed the study.” A so-called stakeholder who thinks a public utility’s first duty isn’t least-cost, reliable electricity at the flip of a switch? How very, very North Carolina of her.
Actual stakeholders attended a public hearing, however, and they were allowed to speak, using clear words:
But during public hearings on renewable energy, industrial customers and some TVA distributors have urged TVA to pursue the least-cost source of power to keep its electric rates as low and competitive as possible.
Captive ratepayers given no choice over who provides them electricity and at how much cost tend to favor least-cost, reliable electricity. Even if such a policy is an existential threat to renewable energy providers, that is plainly the standard North Carolina should adopt.
Or, better phrased, the standard of least-cost, reliable electricity is the standard to which North Carolina should return.
Jon Sanders (@jonpsanders) is Director of Regulatory Studies for the John Locke Foundation.