Southern Cooking

When considering where in the country renewable energy is thriving, one might be inclined to point to California or Hawaii or maybe Massachusetts or Iowa.  That would be fair, given those are examples of places where clean energy today has the biggest footprint.  But to get a confirmation of the fact that renewable energy will play a bigger and bigger role in our energy future, take a look at the Southeast.  Long considered the land of God, Guns and Fossil Energy, the South is changing.  In South Carolina and Georgia, the last year has seen laws passed and deals cut to open markets to renewable energy — and solar in particular.  In Florida, a constitutional amendment ballot is being considered that will open that state to distributed energy options like rooftop solar.

These states all have something in common that makes the changes happening there surprising — they are all states that rely on the 20th century model of vertically integrated monopoly electric utilities.  There is little or no market competition for the generation or delivery of energy.  The incumbent utilities all operate on the traditional model of a single provider building centralized generation assets (largely coal and gas) and transmitting and distributing that power to customers at rates designed to return the utility’s investment with a regulated profit.  Consumers have little choice in the matter.

Perhaps the most fascinating political aspect of these changes is that they were driven not just by environmentalists but by conservative activists.  The South is the birthplace of the “Green Tea” movement — Tea Party-inclined conservatives who are asking the basic question — why is the government telling me that I do not get to choose how and from whom I buy energy? Consumers have choices in a free market when it comes to buying almost anything else.  Add to that the fact that many are attracted to self-sufficiency of self generation (such as by installing solar on their rooftop), and the conservative argument for solar becomes more clear.

Last week, Southern Company — the dominant investor-owned utility system in the South — announced that it would now get into the rooftop solar business.  “[Y]ou can call Georgia Power [one of Southern’s companies], and Georgia Power will arrange to get a solar panel on your roof” said Southern CEO Tom Fanning at the Company’s annual meeting. Certainly, Southern now has little choice given a law passed (unanimously) by the Georgia Legislature earlier this year.

But there is more (and less) going on here.  First, the glass half-full: the move into distributed generation by an old-school player like Southern flies against the narrative of most of the regulated utility sector, which is that distributed generation is disruptive to their management of the grid, shifts costs to non-solar customers, and is otherwise a threat to basic business model that built America’s electricity system.  It also is an acknowledgment of the rapid decline in the costs of solar.

On the other hand, what is happening in Georgia and other southern states is short of what both free market conservatives and solar advocates really want — unfettered competition for the supply of energy choices.  The question is not just whether I can call Georgia Power to get my solar; but can I call a whole bunch of suppliers and have them compete for my business. This is precisely the question before the North Carolina legislature, which is considering a bill which will allow for full competition for the provision of distributed energy services.  Southern’s regulated utility sister company Duke Energy is, so far, vehemently opposing that bill.  Duke and Florida Power and Light are taking the same position in Florida.

But progress is progress.  Whether you think solar will help fight climate change or whether you just don’t like the government telling you what to buy, from whom and at what price, the winds of change are blowing — even in Dixie.

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3 thoughts on “Southern Cooking”

  1. Roger: kudos for spotlighting the progress that F I N A L L Y seems to be getting traction in the Southeast U.S. We’re spotlighting these and other clean energy market-enabling developments at SoutheastEnergyNews.com.

    Like

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