Thursday, August 25, 2016

Yes On 4, No On 1.


In recent weeks, there has been a campaign to encourage voters to vote Yes on Amendment 4 on the August 30th ballot.  Some of the advocates of the "yeson4" campaign also urge voters to vote No on Amendment 1 on the November 8th ballot.  Both questions have to do with solar power.  Setting aside that there's something weird about making either of these an Amendment to the State Constitution...

The August 30th question is straightforward.  It asks voters whether they think solar panels installed on private homes should be exempted from homeowners' paying a valuation or property tax on those panels.  The idea is that extra taxes on home solar panels would inhibit homeowners from installing them, but since moving to renewable sources of energy (like solar) is considered a good thing, then we should avoid impediments to it.  It's hard to imagine any homeowner voting No on this question.  Why would they?  If they want solar panels, the exemption will help them.  If they don't want them, the exemption won't hurt them.

The other question, Amendment 1 on the November general election ballot, is trickier.  It has a few components. Here it is:

(a) ESTABLISHMENT OF CONSTITUTIONAL RIGHT. Electricity consumers have the right to own or lease solar equipment installed on their property to generate electricity for their own use.

(b) RETENTION OF STATE AND LOCAL GOVERNMENTAL ABILITIES. 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.

(c) DEFINITIONS. For purposes of this section, the following words and terms shall have the following meanings:
(1) "consumer" means any end user of electricity regardless of the source of that electricity.
(2) "solar equipment," "solar electrical generating equipment" and "solar" are used interchangeably and mean photovoltaic panels and any other device or system that converts sunlight into electricity.
(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.
(4) "lease," when used in the context of a consumer paying the owner of solar electrical generating equipment for the right to use such equipment, means an agreement under which the consumer pays the equipment owner/lessor a stream of periodic payments for the use of such equipment, which payments do not vary in amount based on the amount of electricity produced by the equipment and used by the consumer/lessee.
(5) "electric grid" means the interconnected electrical network, consisting of power plants and other generating facilities, transformers, transmission lines, distribution lines and related facilities, that makes electricity available to consumers throughout Florida.
(6) "electric utility" means any municipal electric utility, investor-owned electric utility, or rural electric cooperative which owns, maintains, or operates an electric generation, transmission, or distribution system within the state.
(d) EFFECTIVE DATE. This section shall be effective immediately upon voter approval of this amendment.

So first, the Amendment offers Florida residents the right to have solar panels on their homes.  But at some level, this doesn't make sense, since Florida residents already have the right to have solar panels on their homes, and there is no public safety or other reason to abridge that right.  So it would be fair to wonder what is the implication of confirming for Florida homeowners a right they already have.  And there is an implication.  In fact, there are three of them.  First, the casual and superficial reader will read that the State, by an Amendment to its Constitution, is guaranteeing Florida residents a right to have solar panels on their homes.  A guarantee like that seems like a wonderful thing, and some voters might automatically seize it.  You're guaranteeing me I can own solar panels?  Done!  "Yes" on Amendment 1.  Second, and related, is that such an offer, and a guarantee, can be such a relief, that no one would bother to read the rest of the Amendment/legalese.  It's a sucker punch.  It's the carrot.  It's like offering someone rohypnol, telling them it'll make them feel great.  Which it might well.  (But aside from that, Mrs Lincoln, how was the play?)  And it's a version of the "are you still beating your wife" question.  Because finally, if anyone gave it a bit more thought, they might suspect that voting "No" could mean, no, I don't want the State to guarantee me that I can have solar panels on my house.  But who wouldn't want that guarantee?  And if I don't seize the guarantee, does it mean the State could or will prevent me from having solar panels on my house?  So it seems best to vote yes.  (Who, then, are these "No on 1" people, and what are they, {or the rest of us?}, missing?)

The Amendment then goes on to reassure Florida residents who do not have solar panels that the presence of solar panels on their neighbors' homes will not adversely impact the cost of electricity to them.  People who don't have solar panels will not "subsidize" the cost of electricity of people who do have panels.  Of course, voters might reasonably wonder how the presence of solar panels on one home could affect the cost of electricity delivered to someone else's home.  FPL, or any other electric company, creates electric power.  It delivers it to everyone's home.  You use as little or as much as you like, and you pay for what you use.  If you use less, because you're efficient, or because you have solar panels on your home, what's that got to do with me?

Well, Amendment 1 in November contemplates that question, and it has what seems to be a very twisted way of reasoning it out.  It begins, fairly enough, by noting that electric companies have to produce electricity all the time.  If everyone had solar panels, and those panels worked so well that no one had to buy power from the electric company when the panels were absorbing sunlight and converting it to electric power, the electric companies would still have to have the capacity to produce electric power.  At night and on less than sunny days, they would have to provide all the power (assuming Elon Musk didn't also sell everyone batteries to store the power they didn't use during the sunny days) for all those homes.  So the electric companies argue that since they have to maintain capacity, that they might not be fully using, because of the people who don't need to buy power from them at a given moment, because they have solar panels, then those people should pay them a premium to maintain that capacity.  As I said, it's a bit of a flaky argument, but it could in theory have a reasonable logic to it.

It helps many kinds of business to know they have a reliable clientele.  And they will reward people who promise to be a reliable clientele.  If you commit to one business or another, you can get concessions, or a discount.  Or, if you commit to a level of usage, you can get a better per unit rate.  The electric producers in Florida could be invoking that kind of theory.  They could be saying that unreliable customers, like people who generate their own solar power, much of the time, or some of the time, but have to be accommodated when they need to buy from the grid, should pay a higher per unit price.  And that's not a wrong theory.  The only question is whether that's really the theory of the electric production companies.  If it is, then they would offer cheaper power to higher, more consistent users.  They don't.  Or, as with the mobile phone industry, they would allow you a flat rate, and you can use as much power as you like, as long as you commit to a payment level.  They don't do that, either.  So it seems that's not really their theory.

In Nevada, the local electric power producer got the State to agree to what our State, and we, are asked to agree to.  They used the same "reserve capacity" theory, and they slapped a monthly surcharge onto the electric bills of people who had solar panels.  That surcharge was so high that the solar panel industry collapsed in Nevada.  Very few Nevadans are willing to pay that much, just to tell themselves they're doing the right thing by having a renewable source of electricity.  That appears to be the intention of Amendment 1 on the November ballot here.  The electric power production industry wants a captive clientele, and they want us to buy all our power from them.  The funny thing is that although most commercial electricity production in this State now comes from burning stuff (fossil fuels), the commercial producers are not limited to that source of electric power.  They can rely on solar panels, too.  Or wind.  And when the fossil sources of fuel are gone, they will.  They don't mind if we use and pay for electric power sourced sustainably.  They just want us to buy it from them.

There was a time that Americans got around, even in "town," by riding horses.  The automobile industry displaced the horse industry.  That's the way it went, and that's the way it goes.  I recently saw copies of Time magazine and the Miami Herald.  They're shadows of their previous selves.  It's all online now.  Brick and mortal stores are going out of business, replaced by internet shopping.  No one has a home encyclopedia any more.  Everyone has the internet and computer or smart phone.  And it's not that there are no more horses, or print publications, or stores, or books.  There's just a lot less reliance on them.  Would those industries like to blame and punish someone for the fact that progress moved the world in a different direction?  I understand that.  But it's just not how it works.

So I agree.  Yes on 4 in August, and No on 1 in November.

PS: It's not that FPL hasn't been adequately good to Floridians.  They've done what anyone could have wanted them to do, at a fair price, and they've been overseen by the State's Public Service Commission, to control them in ways public utilities must be controlled.  They're a private corporation, out to benefit themselves, too, and I don't fault them for that.  It's business-- their business-- and it's reality.  The "problem" is that there is now a competing reality, and it doesn't favor FPL.  It's the increasing availability and perfection of ways private individuals can actually create their own electric power, and allow them no longer to need a third party producer as they did before.  It threatens the electric company's business.  What is unique here and now is that the same people who might appear to want to thumb their noses at the electric company, by creating their own electricity, also need the electric company, when they can't create electricity on their own.  If the electric company complains they're being used by the public, they're not wrong.  A book about personality disorder is called I Hate You Don't Leave Me, and a book about adolescents is called Get Out of My Life, But First, Could You Drive Me and Cheryl to the Mall?  It's like that.  And I wouldn't even argue that the theory of charging a premium to less reliable customers is wrong.  The theory of charging extra to less committed customers, who maintain the need for reserve capacity for which they will often not pay, is a fair theory.  But charging them an exorbitant and essentially punitive and inhibiting premium is not a fair exercise of the theory.  Having to pay interest to borrow money is fair.  Usury is not.

Every place I go to attend cultural events will charge me more per event, if I go to select concerts or shows, instead of subscribing to the whole series or season.  Because that event will occur, whether I'm there or not.  And if I'm the patron who might or might not be there, and might or might not support the company by paying for a ticket, then I will pay more when I do.  The per issue price for a random copy of a magazine or newspaper is far higher than the per issue price paid by subscribers.  Because the magazine or newspaper will be produced, and will be at the newsstand, whether occasional readers buy that issue or not.  There will always be "reserve capacity."  And if the per issue, or per concert, price is too high, people will either be forced to subscribe, or they'll shrug their shoulders and not buy.  The difference with public utilities is that the public must have the availability.  It's not discretionary, as attending a concert, or buying a magazine, is discretionary.  The utility is in the unenviable position of having to tolerate, and maybe even enable, evolution that undermines its business.  I have never been a proponent of making cigarette companies advertise what's wrong with their product.  It's not fair to them to make them work against themselves.  If cigarettes are bad and dangerous, we should outlaw them.  If we don't do that, it's on us.  The utility is different.  We have no beef with what they provide.  We need it, and we want it.  We just want to compete with them, and we don't want them to complain about it.  We say we want them out of our lives, but we want them waiting outside, in an air-conditioned car, with our favorite music playing on the radio, in case we suddenly feel a need to be driven to the mall.  And since they're our mommies and daddies, we don't want to have to compensate them for the ride.  If I had, or come to have, solar panels, I would understand a higher per kWh charge for the power I irregularly use.   Just not artificially high, and high enough to undermine my "independence."

Yes on 4 in August, No on 1 in November.




7 comments:

  1. Thanks Fred,
    Very happy I read your Blog today and did some research on the vote YES and No and the Nevada issue with solar and I tell you after sparking conversation within the family and with in my friend base Im voting yes on 4 on the August Ballot.
    I want the option to use solar or buy it from the grid when I want. And understand that I would pay for the option of using it on a as use bases with out any long term contract with the Power Company in my case FPL. But would not want them to raise it to an exorbitant amount that is unfair to the solar user be it part time or full time.
    Voting Yes on 4 in August and Voting No on 1 in Nov.

    Thanks again always like it when I can create a good conversation in my household.

    ReplyDelete
    Replies
    1. Hey, William,

      There's one other angle I didn't discuss, because it's not related to the November election Amendment. Another of the manipulations (I guess it's fair to call it that) the electric company perpetrates regarding solar panel owners is its schedule for selling and buying power. It will sell power to anyone for the going rate (even if it doesn't slap on the punitive premium). But if solar panel owners create enough electric power on their own that the serve their own needs, and send excess back into the grid, FPL buys that power at a much lower rate. It's not like a normal agio. It's much more dramatic than that. Again, it's their way of making it not fully worthwhile for homeowners to create their own power, at least not if they expect to make money on the deal.

      Fred

      Delete
  2. Yes I was aware of the selling back to FPL but have no clue how much they buy it back for. I do have a friend that fitted his house with all solar a few years ago and will ask him his take on this issue. I know he said it would take him quite awhile to make it worth it. I think he paid around 50 thousand to do it. I'll update after I speak to him.
    w

    ReplyDelete
    Replies
    1. Wow, I never heard of anyone spending that much for home panels. And I heard the same thing about its taking a long time to make back your money, even just in lower electric bills. In fact, I read or heard that because panels are not permanent (eventually, they stop working, or they break), you actually never make back your money, before you have to replace the panels. One of our neighbors wrote me today (in response to this post, but she didn't want to comment publicly), that she had one panel, which, to her knowledge was put there when the house was built, and it got ruined in one of the '05 hurricanes, and had to be replaced. She didn't say what she spent. She doesn't seem to know to what extent this one panel lowers her electric bill.

      Fred

      Delete
    2. Yes well he put in panels and batteries to hold that power as well. So it was not just solar panels. He also said something about the panels not being covered in a big storm with his insurance company but this was years back we spoke about it so I may be a little off on my comments about the conversations.

      Delete
    3. Oh good for him. That was my Elon Musk reference. That's a really great idea, although, as you can see, it's expensive. But if you have enough panels and enough batteries, you can manage never to pay for power from the grid. And you have power all the time: even when the power is out for everyone else.

      Delete
  3. There's a chance you are qualified for a new government sponsored solar energy program.
    Click here and find out if you qualify now!

    ReplyDelete