And Now the Koch Brothers Will Attempt to Crush the Solar Industry

By Evan Halper, Los Angeles Times

21 April 14

 

The Koch brothers and large utilities have allied to reverse state policies that favor renewable energy. Environmentalists are pushing back, but the fight is spreading and intensifying.

he political attack ad that ran recently in Arizona had some familiar hallmarks of the genre, including a greedy villain who hogged sweets for himself and made children cry.

But the bad guy, in this case, wasn't a fat-cat lobbyist or someone's political opponent.

He was a solar-energy consumer.

Solar, once almost universally regarded as a virtuous, if perhaps over-hyped, energy alternative, has now grown big enough to have enemies.

The Koch brothers, anti-tax activist Grover Norquist and some of the nation's largest power companies have backed efforts in recent months to roll back state policies that favor green energy. The conservative luminaries have pushed campaigns in Kansas, North Carolina and Arizona, with the battle rapidly spreading to other states.

Alarmed environmentalists and their allies in the solar industry have fought back, battling the other side to a draw so far. Both sides say the fight is growing more intense as new states, including Ohio, South Carolina and Washington, enter the fray.

At the nub of the dispute are two policies found in dozens of states. One requires utilities to get a certain share of power from renewable sources. The other, known as net metering, guarantees homeowners or businesses with solar panels on their roofs the right to sell any excess electricity back into the power grid at attractive rates.

Net metering forms the linchpin of the solar-energy business model. Without it, firms say, solar power would be prohibitively expensive.

The power industry argues that net metering provides an unfair advantage to solar consumers, who don't pay to maintain the power grid although they draw money from it and rely on it for backup on cloudy days. The more people produce their own electricity through solar, the fewer are left being billed for the transmission lines, substations and computer systems that make up the grid, industry officials say.

"If you are using the grid and benefiting from the grid, you should pay for it," said David Owens, executive vice president of the Edison Electric Institute, the advocacy arm for the industry. "If you don't, other customers have to absorb those costs."

The institute has warned power companies that profits could erode catastrophically if current policies and market trends continue. If electricity companies delay in taking political action, the group warned in a report, "it may be too late to repair the utility business model."

The American Legislative Exchange Council, or ALEC, a membership group for conservative state lawmakers, recently drafted model legislation that targeted net metering. The group also helped launch efforts by conservative lawmakers in more than half a dozen states to repeal green energy mandates.

"State governments are starting to wake up," Christine Harbin Hanson, a spokeswoman for Americans for Prosperity, the advocacy group backed by billionaire industrialists Charles and David Koch, said in an email. The organization has led the effort to overturn the mandate in Kansas, which requires that 20% of the state's electricity come from renewable sources.

"These green energy mandates are bad policy," said Hanson, adding that the group was hopeful Kansas would be the first of many dominoes to fall.

The group's campaign in that state compared the green energy mandate to Obamacare, featuring ominous images of Kathleen Sebelius, the outgoing secretary of Health and Human Services, who was Kansas' governor when the state adopted the requirement.

The Kansas Senate voted late last month to repeal the mandate, but solar industry allies in the state House blocked the move.

Environmentalists were unnerved. "The want to roll it back here so they can start picking off other states," said Dorothy Barnett, director of the Climate and Energy Project, a Kansas advocacy group.

The arguments over who benefits from net metering, meanwhile, are hotly disputed. Some studies, including one published recently by regulators in Vermont, conclude that solar customers bring enough benefits to a regional power supply to fully defray the cost of the incentive.

Utilities deny that and are spending large sums to greatly scale back the policy.

In Arizona, a major utility and a tangle of secret donors and operatives with ties to ALEC and the Kochs invested millions to persuade state regulators to impose a monthly fee of $50 to $100 on net-metering customers.

Two pro-business groups, at least one of which had previously reported receiving millions of dollars from the Koch brothers, formed the campaign's public face. Their activities were coordinated by GOP consultant Sean Noble and former Arizona House Speaker Kirk Adams, two early architects of the Koch network of nonprofits.

In October, California ethics officials levied a $1-million fine after accusing groups the two men ran during the 2012 election of violating state campaign finance laws in an effort to hide the identities of donors.

The Arizona Public Service Co., the state's utility, also had Noble on its payroll. As a key vote at the Arizona Corporation Commission approached late last year, one of the commissioners expressed frustration that anonymous donors had bankrolled the heated campaign. He demanded APS reveal its involvement. The utility reported it had spent $3.7 million.

"Politically oriented nonprofits are a fact of life today and provide a vehicle for individuals and organizations with a common point of view to express themselves," company officials said in a statement in response to questions about their campaign.

The solar companies, seeking to sway the corporation commission, an elected panel made up entirely of Republicans, formed an organization aimed at building support among conservatives. The group, Tell Utilities Solar won't be Killed, is led by former California congressman Barry Goldwater Jr., a Republican Party stalwart.

"These solar companies are becoming popular, and utilities don't like competition," Goldwater said. "I believe people ought to have a choice."

The commission ultimately voted to impose a monthly fee on solar consumers — of $5.

The solar firms declared victory. But utility industry officials and activists at ALEC and Americans for Prosperity say the battles are just getting underway. They note the Kansas legislation will soon be up for reconsideration, and fights elsewhere have barely begun.

In North Carolina, executives at Duke Energy, the country's largest electric utility, have made clear the state's net metering law is in their sights. The company's lobbying effort is just beginning. But already, Goldwater's group has begun working in the state, launching a social media and video campaign accusing Duke of deceit.

"The intention of these proposals is to eliminate the rooftop solar industry," said Bryan Miller, president of the Alliance for Solar Choice, an industry group.

"They have picked some of the most conservative states in the country," he added. "But rooftop solar customers are voters, and policymakers ultimately have to listen to the public."