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Published on April 23rd, 2010 | by Susan Kraemer

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How Southern Company Keeps Solar Competition Out of Georgia

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April 23rd, 2010 by
 

Georgia has about 12 laws on the books to make it difficult for solar power to compete head to head with fossil power. All twelve were lobbied for successfully by Georgia Power, and its parent Southern Company. But the most effective of the twelve anti-competitive laws is the Territorial Electric Service Act which gives the utility a monopoly over “the purchase of energy”.

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The cheapest way to get solar is to just purchase the energy. Power Purchase Agreements (PPAs) can deliver clean power at a lower cost than utility power.

Under a PPA, you simply buy the electricity from the the solar panels on your roof – just like you now buy the electricity from your utility now.

Shouldn’t any solar business be able to sell you solar power off your roof? In California, and Colorado and many states they can.

I am not sure why the Southern Company is not regulated by the FTC for restraint of trade. Forbidding “the purchase of energy” – except from them – constitutes imposing  an anti-competitive monopoly.

Power purchase agreements compete directly with your current electricity bill, because just like you don’t have to buy the actual coal-fired power station that your utility sells you the power from – under a PPA, you don’t buy the solar panels on your roof, but just pay monthly for the power they generate.

You don’t have to invest in your own coal plant to get dirty power – you just pay for the power. (And pay. And pay, and pay , with hidden costs amounting to 8 cents a kwh of asthma and brain damage and an unsafe future climate.)

The fossil interests that spread the disinformation that solar is more expensive than fossil energy, are really asking you to compare the cost of buying an entire power station (a solar system on your roof – that will generate power for 40 years or more) with a monthly payment for just electricity (paying a monthly power bill) that comes from the utility coal or gas-fired power plant.

Of course it sounds terrifyingly expensive to put in your own solar if you compare it with a little monthly electricity bill. Who cares if you could buy a house with what you save with solar over 25 years. It’s just the next month’s bill that matters to most of us.

Yet PPAs can compete on price with utilities – when you buy the power monthly. In many states it is cheaper to pay for solar than for dirty power, when its paid for the same way.

In my own experience canvassing with SunRun, for example, I see that this amounts to as little as 12 cents a kilowatt hour for some options, 25 cents for others – and that is a flat rate for 18 years. Yet Californians PG&E rates are increasing at 7% every year, and they can be charged almost 50 cents now for PG&E power, if they use a lot.

So solar is competitive with traditional power – when paid for the same way.

This is why the Georgia Power has forbid “the purchase of energy”. Instead it is building two new coal plants and two nuclear reactors in the state.

“The clean technologies are here today. The companies are blocking the market,” said Erin Glynn, director of the Sierra Club’s Beyond Coal Campaign. “They are trying to block clean energy by trying to flood the market with cheap, dirty energy.”

While many big utility companies employed two dozen or more lobbyists to oppose the clean energy bill; Georgia Power’s parent company, Southern Company, employed three times as many – 63 lobbyists to fight the recent federal clean energy bill.

But the Senate should attempt to end the anti-competitive nature of  these “purchase of energy” monopolies like that long held by the  Southern Company, simply as part of financial reform.

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About the Author

writes at CleanTechnica, CSP-Today, PV-Insider , SmartGridUpdate, and GreenProphet. She has also been published at Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow, and Scientific American. As a former serial entrepreneur in product design, Susan brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention, solving climate change is the mother of all necessities! As a lover of history and sci-fi, she enjoys chronicling the strange future we are creating in these interesting times.    Follow Susan on Twitter @dotcommodity.



  • Anonymous

    You are very wrong about Georgia’s Territory Act. It was in no way designed to block solar power. It was ONLY designed to prevent “cherry picking” of electric loads and the duplication of distribution lines (not transmission). It has served Georgia very well in that capacity. If you don’t believe so, compare historic rates in Georgia to other states. The reason Georgia’s energy prices are rising is because of Obama’s EPA. The goal of many who want solar to succeed believe it can only be done if prices for tradional energy sources are forced higher, or out of business. But your analysis is all wet. Residential costs per kWh in Georgia average about $.10, far less that the pipedream $.12 you claim solar can produce and vastly lower than the more realistic $.20 to $.25 solar costs available now.

    • Kyle Sager helioshirt.com

      Actually, since Susan’s original post was 2010 and solar hardware costs declined more that 70% in 1 1/2 years her original is not too far off. Additionally, panel hardware has been on a 30 year straight-line logarithmic cost decline. Very predictable. What all this means is: Solar prices are coming down to make PPAs pay off. Additionally: Coal spot prices grow more erratic as years pass and also the BTU per ton is beginning to decline. In the face of these trends, I am curious as to why, tbonedawg, you never once address Susan’s fundamental premise that PPA financing is being TOTALLY BLOCKED by the law. If the Georgia’s Territory Act is so great, why doesn’t Georgia UNBUNDLE transmission from production?? PPA’s have NOTHING to do with running transmission lines…and so their should be no reason to block them. I’ll tell you why: the law is a protectionist measure designed to preserve monopoly power. Southern Company and the Legislature have had YEARS to retool this law to let in PPAs (PPAs don’t run lines!!!)…and the legislature has been ASKED repeatedly for corrective measures by the solar industry here. Southern Company just doesn’t want to lose the revenue. Hence the Territory Act is a socialist measure, plain and simple. It is a destructive block to progress.

      • Kyle Sager helioshirt.com

        “Cherry Picking”…is a very handy euphemism to avoid competition and obfuscate the issues. In fact: “Cherry Picking” is what EVERY competitive market space does. In this case of power, very large, energy intensive manufacturers could not only provide their own power with solar on their rooftops, they could conceivably sell excess back to grid and themselves become competitors to Southern Company (without the additional anti-competitive buy-back caps in RNR-7). The only place that behavior raises prices is on the planet “Opposite World” where fantasies happen. Here on earth, large players shifting to competitive energies would force prices down. Classic economics. Competition with higher supply lowers prices. Socialism constricts supply and raises prices. 101 undergrad economics.

  • jim rogers

    I am a Southern Company Georgia Power customer and I am upset with their rate calculation for budget billing purposes. Last year I purchased green energy credits at 5$ per 100 kwhs. I purchased 50$ per month to supposedly offset 1000 kwhs a month electricity average usage. In February 2011 they added my total current electric service by adding my actual current service cost with fees and tax to my green energy monthly 50$ and then averaged my usage to reset my budget amount so high that I was unable to purchase the energy credits this year. The supervisor I spoke to on the phone, Dec. 28, 2011, said my purchase of green energy credits did not in fact purchase green energy from some existing solar and biomass facility. She said that the green energy purchase by me only went toward building a bridge to green energy mix in the Georgia Power available energy mix. This is not what my purchase was suppose to do. I thought that by buying the green energy I was actually adding 1000kwhs to the overall electricity mix for Georgia Power. Also, by their not calculating my usage by the actual kwhs averaged over the year I now am unable to purchase the energy credits that suppose to buy infrastructure to facilitate green energy mix in the future.

  • Anonymous

    Buddy, you need to adjust your meds. And get a new keyboard; something’s wrong with the one you have now.

  • Lyndel

    I don’t want to pay 1000x as much for electricity. AND CHEAPER ELECTRIC RATES BRING JOBS TO THE SOUTH. OBAMA SMOKES AND IS WORRIED ABOUT CLEAN AIR ? Global warming is the biggist myth of all time and you got sucked into it. C02 is regulated by Earth, not OBAMA. gO GET A SCIENCE DEGREE, NOT JOURNAL-SCIZUMS.

  • http://www.moxyvote.com Moxy Vote

    Sierra Club is supporting the shareholder resolution to be discussed at the upcoming annual meeting for The Southern Company on 5/26.

    Investors can throw their support behind the Sierra Club by using Moxy Vote’s new site to vote their proxy. Details at: http://www.moxyvote.com/ballots/2564

  • http://glueandglitter.com/main Becky

    This makes me furious. Georgia has so many things backward, from transit to this sort of thing. I think the question here becomes…what do we do about it?

  • Leonard Haynes

    Sorry Susan, you just don’t know what you are talking about. Yes, there is a territorial law in Georgia (and most other states in the Southeast, not just ones served by the Southern Company). These laws have been around for a long time (since the 1970′s in Georgia for instance) and were not designed to inhibit the development of solar energy. These laws designed to prevent us from having to look at the power lines of three or four separate utilities running up and down our streets. You talk about solar energy prices of 12 to 25 cents (flat rate). That may be the case in the Southwest where rebates and tax credits are very high and solar energy is much more efficient due to higher levels of solar insolation. But I haven’t seen those types of price estimates for residential installations in the Southeast, unless there were some very hefty rebates and tax incentives available. We must have alternatives to coal energy, and solar photovoltaics needs to be one of those alternatives. But over-selling the cost effectiveness of solar is counter productive and so is blaming everything on the utilities.

    [SK: Exactly: The Territorial Electric Service Act was passed in the 70's... because that's when solar first reared its head as competition - in the 70's. They might have told you it was just about protecting you from unsightly additional transmission lines, but I hardly imagine they were afraid of transmission line competition!

    I agree, the South has the most states with what seems to you to be cheap coal power, so your utility electricity costs ratepayers less. But all of us taxpayers pay an ever growing hidden cost in health and environmental damage for your cheap coal power.]

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