Monday, August 1, 2016

A Bright Future, Part II: Potential Setbacks


By Sage Ertman, Policy Intern


In Part I of this blog series I addressed the changing political climate in the United States and abroad. Between the Clean Power Plan, last year’s climate change conference in Paris, and the ambitious goals set by Canada, Mexico and the US at this year’s North American Leaders’ Summit, world leaders are demonstrating their much needed commitment to a sustainable future in energy.

Part II of this series discusses how powerful forces in the US have shown much resistance to the movement toward renewable energy.

Attacks On Renewable Energy Policy

Fossil fuel and utility companies play a large role in financing attacks on clean energy policies. As clean energy alternatives gain more traction, companies selling coal, oil and gas are doing whatever they can to delay the growth of this mounting competition in the energy marketplace. These sustainable resources are becoming cheaper every year and are expected to continue doing so. As such, some entities view renewable energy as a significant threat to global reliance on fossil fuels.

One of the primary methods used by these fossil fuel proponents is the funding of front groups that serve to add seemingly independent voices to the anti-clean energy platform. One report suggests that these front groups, motivated by financial and political interests, are attacking the practice of net metering and the use of renewable energy standards in order to make switching to renewable energy less affordable and less appealing.

For example, the Edison Electric Institute (a trade association representing all US investor-owned electric companies, i.e. the entire utility industry) launched a campaign in recent years to repeal or weaken net metering laws. EEI issued a report criticizing net metering as “not fair” and arguing that not only do the customers using distributed generation (DG) systems avoid paying for the utility’s power since they produce their own, they also avoid paying for the fixed costs of the grid. These efforts function to spread biased information about the impact of solar on the grid; though EEI correctly pointed out that rooftop solar passes inflated costs onto other ratepayers, it neglects to weigh any associated benefits. For example, recent research by the Brookings Institution found that distributed solar systems (e.g. rooftop solar) and net metering, more often than not, actually provide a net benefit to ratepayers, meaning the benefit to all ratepayers exceeds what solar customers receive in net-metering credits. A report by the Frontier Group and Environment America found that distributed solar offers net benefits to the entire electric grid through reduced capital investment costs, avoided energy costs, and reduced environmental compliance costs.

While regulators and utilities do need to work together to develop strategies to efficiently integrate DG technologies into the grid, instituting a fair utility cost-recovery strategy does not need to simultaneously weaken or eliminate net metering policies. Unfortunately, in 2015 alone, utility interests successfully weakened net metering policies in at least 16 states.
              
In a developed and educated society, these financially motivated efforts ideally should do no more than delay the inevitable. The shift to renewable energy is a logical and necessary step on the path to mitigating the harm we have caused to this planet and its inhabitants. In

Part III I will discuss various political views on climate change and how those views may shape energy policy in the U.S., especially following the 2016 Presidential election.

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