Struggles Over Utilities’ Grip on Energy Headed to Vote in Two Sunny States

Read time: 7 mins
Boat with solar panels in Florida.

When voters in Nevada and Florida hit the polls they will see ballot measures on energy that, if passed, would have a significant impact on consumer choice and monopolies for energy utilities. 

In Nevada, the ballot measure would weaken the dominance of the state’s main utility. Meanwhile the Florida initiative could be a boon to big utilities, thanks to what critics call deliberately deceptive wording. 

Florida’s Amendment 1: Wolf in Sheep’s Clothing

The Florida Solar Energy Subsidies and Personal Solar Use Initiative, also known as Amendment 1, sounds like it would benefit consumers and promote solar energy. However, two of the largest donors pushing to get the amendment on the ballot are Duke Energy and Florida Power & Light, calling into question the true nature of the initiative.

According to Ballotpedia, these utilities have given a combined $11 million to the cleverly named Floridians for Solar Choice, the group sponsoring the amendment.

Amendment 1 would change the state's constitution to ostensibly let consumers generate and use energy on their own property. The ballot summary states:

“Amendment 1 establishes a right under Florida's constitution for consumers to own or lease solar equipment installed on their property to generate electricity for their own use. 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.”

But critics say the “Rights of Electricity Consumers Regarding Solar Energy Choice,” as the amendment is phrased on the ballot, would actually take away consumer choices and allow utilities to monopolize the solar industry in the Sunshine State. 

The problem lies in the legal implications of a key phrase which might be overlooked by voters, but which critics call a poison pill: “… 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.”

For the amendment, the phrase “backup power” has a specific meaning:

“(3) “backup power” means electricity from an electric utility, made available to solar electricity consumers for their use when their solar electricity generation is insufficient or unavailable, such as at night, during periods of low solar electricity generation or when their solar equipment otherwise is not functioning.”

Unless solar users are completely disconnected from the grid, they engage in what is known as net metering, where they sell excess solar-generated electricity back to the utility or buy extra electricity from the utility when the solar panels aren’t producing energy (e.g., at night). But the electricity that customers buy from the utility isn’t backup power; it’s the same electricity bought by non-solar customers and delivered through the same power grid. 

The bottom line, according to critics, is the amendment would allow utilities to charge more than the market rate for electricity sold to roof-top solar customers when they need it, and to pay those customers less than market rate for any electricity they produce and sell back to the utility. 

A lawsuit filed against putting this amendment on the ballot describes how the misleading wording obscures the measure’s real intention, which is to allow state and local governments to impose fees that create a financial disincentive for Floridians to go solar.

The suit states that “ … by explaining that the amendment would ensure that ordinary customers would not have to subsidize solar users’ “electric grid access,” the summary would mislead voters into thinking that it applied only to the cost of converter boxes and wires to connect to the utilities’ power pole.”

Several newspaper editorial boards have advised voters to approach the issue skeptically or vote against.

The Tampa Bay Times has written: “The wording of this solar energy measure financed by the utilities is deceptive, and the justices should not allow it to go on the fall ballot. The amendment is an attempt to block the private market for solar in Florida — not to expand consumer choice — and voters should not be confronted with this sneak attack.”

On Tuesday, former Vice President Al Gore joined Hillary Clinton in Miami and urged Floridians to vote down the “phony-baloney” Amendment 1.

Possibly because of the confusion over the title and wording of Amendment 1, the measure appears likely to pass. A poll by the Florida Chamber of Commerce, a supporter of the amendment, finds almost two-thirds of Florida voters in favor of it and other polls have shown even greater support.

There is a bright spot in Florida’s solar ballot wars. In August, Floridians passed another solar initiative, Amendment 4. Unlike Amendment 1, Amendment 4 would revamp several polices that discourage solar deployment. It was backed by environmental groups and passed with 73 percent support.

Amendment 4 would make solar and renewable energy equipment on commercial buildings exempt from property taxes and would eliminate certain personal property taxes on solar equipment. The measure was aimed at large solar users and would go into effect for 20 years starting in 2018. Advocates hope it could push big-box retail stores to cover their roofs with panels. 

After the approval of Amendment 4, Sean Gallagher, vice president of state affairs for the Solar Energy Industries Association, said the vote “sends a strong signal that Florida is open for business and the well-paying jobs and economic benefits that solar provides.”

Amendment 4 may ultimately be a small victory for solar customers in a state that’s openly hostile to allowing solar power to gain a foothold. A Rolling Stone article earlier this year laid out the political barriers to rooftop solar, with Koch-funded groups pushing for rate hikes on solar customers in one of the sunniest states in the nation:

“The solar industry in Florida has been boxed out by investor-owned utilities (IOUs) that reap massive profits from natural gas and coal. These IOUs wield outsize political power in the state capital of Tallahassee, and flex it to protect their absolute monopoly on electricity sales. “We live in the Stone Age in regard to renewable power,” says state Rep. Dwight Dudley, the ranking Democrat on the energy subcommittee in the Florida House. “The power companies hold sway here, and the consumers are at their mercy.”“

The potential for massive disruption of traditional utilities’ business models suggests that fossil fuel interests will continue fighting it, even if it requires tricky wording to get Floridians to do the utilities’ bidding. 

Nevada: Ready to End Utility Monopoly?

Further west, the group Nevadans for Affordable, Clean Energy Choice (NACEC) sponsored Question 3, a ballot measure that would open the state’s energy market to competition.

Nevada’s solar industry was decimated over the past year with the end of net metering, a measure that allows home solar customers to reap the energy they supply to the grid at the same rate. While Question 3 does not address net metering, it would weaken the  monopoly of the state's main utility, NV Energy, an entity that many solar customers blame for pushing to end net metering to turn out the lights on the solar industry. 

The tipping point in getting this measure on the ballot may have been NV Energy’s biggest customers, who have tried to weaken the company’s dominance in Nevada. Casinos MGM Grand and Wynn Resorts agreed to pay more than $100 million in exit fees between them to leave NV Energy’s service in order to procure power on the open market. In July, data storage company Switch sued NV Energy and the Public Utilities Commission (PUC) for not allowing it to do the same and shop around for more favorable energy rates.

Question 3 is broadly popular. A Suffolk University Nevada poll released last week found 72 percent of voters supporting it. 

If it passes, the Nevada legislature would have to approve it to make it law.

Earlier this year, Nevadans were on track to overturn the PUC’s decision to gut net metering with a ballot proposal to reinstate retail rate net metering pushed by the Bring Back Solar Alliance, a coalition of community groups, nonprofits, and small businesses. But in August the Nevada Supreme Court rejected that proposal, saying the proposal’s wording was misleading.  

Main image: Solar boat Credit: Venture MinimalistsCC BY-NC-ND 2.0

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