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Cities, utilities say solar customers would get away without paying under proposed amendment

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A proposed solar energy amendment could unfairly shift the cost of maintaining electricity plants and power lines from homes and businesses with solar energy to other utility customers, representatives of cities and electric utilities said Friday.

Floridians for Solar Choice proposes a constitutional amendment establishing that the state’s policy is to promote local, small-scale solar energy production and prohibit barriers to solar energy. The group has collected enough petition signatures for review by the Florida Supreme Court but still needs more than 600,000 to get it on the ballot.

Barry Moline, executive director of the Florida Municipal Electric Association, said those utilty customers who buy the power from small solar energy producers could end up paying less in taxes collected by utilities for cities and the state as well as revenues to local governments from franchise fees.

He spoke during a workshop Friday of the Financial Impact Estimating Conference, which is a panel of state  analysts working to determine the cost of the solar amendment.

And he said the solar customers also would pay less of the $8 billion in debt incurred by municipal utilities for power plants and the power distribution system than other customers.

“Ultimately they’d be imposing costs on their neighbors, their fellow citizens, and ultimately raising their utility rates, the utility rates of their neighbors,” Moline said. “It would raise rates for everyone, but the solar folks wouldn’t be paying those costs.”

But Jose Diez-Arguelles, staff director for the Senate Committee on Finance and Tax, asked whether the utilities already shift some of the fixed costs burden to year-round customers and away from winter residents, or “snow birds,” to avoid making them pay more during months when they’re not in Florida.

“Why are they (winter residents) any different than if I put solar panels on my roof to provide 25 percent of my electricity?” Diez-Arguelles asked.

“I think that’s a fair comparison — it’s a policy issue,” Moline said.

And Moline conceded there also are other benefits of solar, including environmental, but the Fiscal Impact Estimating Conference is only dealing with the financial costs.

“It may have sounded like I was an opponent, but we’re not — we’re not an opponent,” Moline added. “What we want to do is we want to put all the numbers on the table and understand the impact as we move forward.

Similarly Amber Hughes, representing the Florida League of Cities, said her group’s 411 member municipalities collected more than $560 million a year in franchise fees and $666 million from the public service tax.

“At the end of the day we believe this amendment could impair the current contractual relationships cities have with utilities,” Hughes said.

And Jerry McDaniel, representing the state’s four largest investor-owned utilities, said all utilities in Florida in 2014 together provided about $2.9 billion in state and local taxes and fee revenues. So each 1 percent in power sales lost to solar would cost $29 million for state and local governments.

Susan Glickman, Florida director of the Southern Alliance for Clean Energy, cited studies from other states to show that the assumption that solar energy users are “freeloaders” within the electric power system is flawed.

“I felt like this conversation went down a dangerous path,” she told the state analysts. “We can’t start with that assumption because it is not a true assumption.”

She said the big utilities are trying to create barriers to solar and other distributed energy technologies — barriers that the amendment seeks to prohibit. And she said the discussion of utilities’ fixed costs and the obligation of solar customers to pay them should be based on studies and real data and not “knee jerk assumptions.”

“We do believe the utilities should get compensation for that infrastructure,” Glickman said. “But let’s be real about what’s already been paid — we’ve all been paying for it for years — and what’s really necessary.”

Bruce Ritchie (@bruceritchie) covers environment, energy and growth management in Tallahassee. 

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