Utilities ask Congress to weaken longstanding energy competition law More »
The House Energy and Commerce subcommittee heard from a variety of energy industry stakeholders last week about whether to make changes to a longstanding energy law, which serves as the most important federal protection for independent solar companies seeking to compete with utilities in the Southeast.
Originally created in response to the 1970s energy crisis, the Public Utility Regulatory Policies Act (PURPA) requires utilities to purchase power from independent power producers—like solar farms, and solar-generating homes and businesses—and to pay fair rates based on the utility’s avoided cost, or the cost the utility would have otherwise incurred to meet its power needs.
As technology costs have continued to decline, solar power is now cost-competitive with traditional power plants, and PURPA is finally able to serve its intended purpose—to give affordable clean energy a real chance to compete against monopoly-generated power.
Leveling the energy playing field has played an important role in solar’s growth nationwide; PURPA projects make up about 20 percent of all solar capacity installed across the country in the past year.
Particularly in the Southeast, where powerful monopoly utilities and significant policy barriers block any meaningful access to real competitive energy markets, PURPA is the only mechanism in place to prevent a completely utility-dominated market. Allowing renewables like solar to compete fairly with other energy resources has resulted in enormous opportunities for economic growth in the region.
Some states like North Carolina have successfully implemented PURPA through robust and inclusive avoided cost proceedings and complementary state regulations. As a result, North Carolina is now ranked second in the nation for installed solar capacity. Neighboring South Carolina also has one of the fastest-growing PURPA markets in the country.
But as solar power has become cheaper, utilities in the Southeast are ramping up efforts to dismantle PURPA to protect their monopoly status. Just last month, a group of solar installers in South Carolina filed suit against Duke Energy for violating PURPA by refusing to enter into contracts to purchase power from the independent power producers for longer than five years.
Weakening PURPA’s protections would go against its purpose to encourage local, diverse, clean energy and hinder the ability of fledging renewable energy companies to access fair rates that enable projects to get built.
“This is yet another thinly-veiled attempt by utility interests to squash competition in order to protect their bottom lines,” said Katie Ottenweller, Senior Attorney and leader of SELC’s Solar Initiative. “Independent solar developers are ready and able to deliver affordable clean energy to Southerners—which is what PURPA was designed to do—but monopoly utilities are leaning on the same disingenuous talking points to continue getting special treatment for their own resources. PURPA should be strengthened, not weakened, as it continues to serve the policy goals that Congress intended.”
Harnessing the South's Bountiful Sunshine
Despite the South’s abundant sunshine, solar energy is a vastly underutilized resource across the region. Recent developments, however, suggest that state policy makers and utility commissions are beginning to recognize the valuable role of solar energy in meeting the region’s electricity demand. SELC’s new initiative was launched to capitalize on this momentum and to help the Southeast reap the many benefits of solar power—including the many new jobs solar can deliver to our region—and reduce our dependence on outdated fossil fuels. Of all the renewable energy sources available today, solar power combines the greatest raw potential with the smallest environmental footprint.
Overcoming the Barriers
Despite growing recognition of the affordability, value and importance of solar energy resources, there are significant obstacles to achieving the South’s full solar power potential.
Utility Monopolies. Most of our states have no policies to require utilities to use renewable energy like solar. Many do have laws that are interpreted in ways that make it difficult for non-utility solar installers to offer common sense financing options to Southerners, which keeps these solar entrepreneurs from bringing jobs and clean energy to our region. These laws need to be clarified to give businesses and residents in the South the freedom of solar choice.
Utilities Taxing Solar Power. Even as solar energy has come down in price, many utilities are actually trying to make solar investments more expensive for their customers. In fact, some utilities want to charge households and businesses through punitive fees and charges for attempting to use solar power. These utilities ignore the significant benefits that solar energy provides to utilities and to all Southerners. SELC fights for consumers’ solar rights across the region, using the power of the law to ensure fair treatment for every home and business that goes solar. Read SELC’s Solar Bill of Rights.
Solar For All. Even though solar power is coming down in price, it is still out of reach for many Southerners, including renters, those with shaded lots, and low and moderate income customers. Our solar initiative is advocating new ways to make solar accessible to all Southerners, such as Community Solar programs that allow customers to participate in a solar project in their community and get credit on their utility bills.
SELC’s solar initiative focuses on removing these barriers so that solar energy will be widely available to consumers and businesses across the region, as well as highlighting the many ways solar benefits families, communities, and businesses in the Southeast.
Making Solar Accessible
We believe that the spread of solar energy is inevitable, but we are pushing the implementation timetable forward by working with state legislatures, the state utility commissions, and the utilities themselves to create opportunities for everyone to benefit from solar’s incredible potential.
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