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Business Observer Friday, Sep. 30, 2016 2 years ago

Amendment 1: Bad for the Future

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This proposed amendment appears to be pro-solar. A closer look reveals its true intent is to protect utility companies' profits.
by: Adrian Moore Staff Writer

Amendment 1 looks good — until you scratch its surface. This wolf in sheep's clothing is a lose-lose for everyone except the utilities. Its language confuses voters into thinking this is a pro-solar bill that will protect customers from rate hikes, but its provisions actually secure Florida's investor-owned utilities a monopoly on electricity sales by making solar power prohibitively expensive to produce. Let's pull back the wool on this disguise, shall we?

The first half of the amendment appears to grant residents the right to generate solar electricity:

Electricity consumers have the right to own or lease solar equipment installed on their property to generate electricity for their own use.

But this is a moot point. Florida residents already have that right. The proof is that they're already doing it. This is pure wool, fluffy salesmanship, making voters think they're getting new rights to solar out of this bill. It's a clever disguise to suck in voters.

The second half of the amendment enshrines the power of the government to protect consumers from “subsidizing” solar panel owners' costs as a means of protecting “public welfare:”
State and local governments shall retain their abilities to protect consumer rights and public health, safety and welfare, and to ensure that consumers who do not choose to install solar are not required to subsidize the costs of backup power and electric grid access to those who do.

This makes voters think this amendment will allow utilities to protect them from high rates, but let's see what that “subsidy” actually is.

Florida Power & Light's website says that it buys excess solar from solar owners at below-retail prices, about 2-4 cents per kilowatt-hour, when retail (what we all pay for electricity) is about 11-12 cents per kWh. This hardly looks like a subsidy to solar owners. In fact, this means utilities are paying rock-bottom prices for excess solar energy and are selling it back to conventional electricity customers for many times more money — a great deal for the utilities. Yes there are costs to the utility from providing backup power and grid access to consumers with solar panels. But those costs are not a subsidy to solar,. They are cost of utilities adapting to changing technology.

The future of electricity is distributed and diverse generation, harnessing new generation technologies, but also new technologies in metering, electricity flow management, power storage and telecommunications. The kind of disruption that Uber brought to taxi markets is slowly but surely coming to electricity, though by different means. Utilities can either embrace this reality and start to find ways to reduce the costs of these kind of connections and transactions, or they can deny it and remain rooted firmly in the 1950s.

Amendment 1 would not just quash distributed use of solar power by homes and businesses, it would halt any progress toward embracing a more dynamic system of electricity generation and consumption.

Enter the Wolf
So ask yourself: Who benefits from locking out that future?

Enter the wolf. What this bill is really about is locking in a utility monopoly on the right to sell electricity in Florida. Amendment 1 is utilities companies funding legislation to shield themselves from competition that would drive the price of electricity down for customers.

The group sponsoring this bill is the Consumers for Smart Solar. Sounds pro-solar, doesn't it? More wool here. This group is funded by the utilities and fossil fuel front groups — not consumers, not solar and certainly not smart for Florida's electricity customers. Its motto, “Yes on 1 for the sun,” fools voters into thinking Amendment 1 encourages solar generation, when it will actually drive solar out of Florida. This anti-solar, anti-consumer bill protects only the investor-owned utilities and fossil fuel groups that sponsored it, and nails the coffin closed for free-market generation of power in Florida.

Florida is behind in the nation, and getting more behind, when it comes to solar power generation.

Shockingly, given all California's missteps on energy policy, it has succeeded with one aspect of solar power. By deregulating its solar market 1993, it allowed the proliferation of clean, solar-generated electricity that is often cheaper than utility grid electricity because third parties who generate solar power can directly engage with consumers. If Amendment 1 passes, that will never happen in Florida.

Already in Florida it is illegal for citizens to buy and sell energy from anyone besides a public utility, effectively outlawing third-party solar or other electricity sources, protecting utilities from competition and allowing a public board to set rates at which utilities buy solar power.

This amendment goes even further to protect the current monopoly constitutionally, because statutes can be overturned by majority, but constitutional amendments require 60% vote of the people to change. This locks Floridians out of the free market, forcing us to pay unnecessarily and persistently higher energy bills, and ensuring Florida will fall further and further behind in the evolution of electricity technology and markets.

By Adrian moore and spence purnell | contributors

Adrian Moore, is vice president of the Reason Foundation and lives in Sarasota. Spence Purnell is a policy analyst at Reason.

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