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Published on February 20th, 2014 | by Peter Allen

17

Civil War At Duke Energy?

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February 20th, 2014 by
 
In 2013, rooftop solar battles had two clear sides: a burgeoning solar industry bringing clean, renewable energy and consumer choice to the masses; and the monopoly utility industry looking to salvage its profit margins. After going undefeated in these battles, the solar industry is on a roll, building grassroots coalitions, and growing stronger than ever. Meanwhile, it appears that big energy insiders are eating their own and struggling with internal conflict.

The most obvious example right now is the case of North Carolina’s Duke Energy. Recently, Duke CEO Lynn Good has been on a media warpath against net metering. A rooftop solar advocacy group, The Alliance for Solar Choice (TASC), posted this recap on CleanTechnica last week.

rooftop solar installerIn case you’re not familiar with net metering, it’s a policy in 43 states — including North Carolina — that gives rooftop solar customers full retail credit for the excess energy they deliver back to the grid. Utilities then sell this energy at the full retail rate to the neighbors, even though it doesn’t cost the utilities a dime to generate, transmit, or distribute that energy. But as more and more consumers embrace rooftop solar, energy demand decreases across the board, and utilities lose revenue.

As the TASC piece points out, Good’s talking points are straight from the big energy playbook set forth by the utility trade association Edison Electric Institute (EEI). Utilities like Duke seek to eliminate net metering to stifle rooftop solar and protect their monopolies.

It appears as though former Duke CEO and Chairman Jim Rogers has a bit more vision than that. After running Duke for nearly a decade, Rogers has suddenly come out strong in support of more distributed energy and fewer large power plants. After receiving the Charlotte Business Journal’s first Lifetime Achievement Award in the energy industry, Rogers told the Journal the key to success in any industry is to “run to the challenge and embrace the change.” He also had this telling comment from someone who’s spent a quarter century as a utility executive: “I think in the next decade to 15 years, this industry is going to be very different from the one you see today.”

This has all the markings of a warning shot at Good and other utility executives, alerting them to the need to embrace rooftop solar and other renewable energy markets. Let’s see if they get the message. If not, it looks as though Rogers is ready to set them straight.

Rooftop solar installer image via Shutterstock

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About the Author

is an independent media strategist based in San José, CA. You can read his many musings on Twitter @pjallen2.



  • Don P

    “In case you’re not familiar with net metering, it’s a policy in 43 states — including North Carolina — that gives rooftop solar customers full retail credit for the excess energy they deliver back to the grid.”

    I just ran across this article while Googling for something else. I don’t know how the net-metering works in the other states, but the statement above is not fully accurate in Florida… and I doubt that it is in many, if any, other states. Yes, during the year the monthly total of electricity sent to the grid are subtracted from the amount taken from the grid on a one for one basis. In that sense it is correct. During the year, if the residential user creates more than is used, the excess goes into a carried forward balance. If the customer uses more than is created, the overage is made up from the carried forward balance. If there is not enough in the carried forward balance to offset the overage, the customer pays for the excess.

    Where the statement falls apart, however, is in the payment between the two. If the residential user uses more than he has created and doesn’t have enough in the carried forward balance to make up the difference (which is my usual situation in January and February) the excess is paid at the full retail rate to the power company. If the customer has a balance at the end of the year (which is my usual situation), the balance is zeroed out and the power company pays the customer for the amount of electricity that had been carried forward… at the wholesale rate.

    Yes, the back and forth exchange is at a one for one, but not if there is any money changing hands. I have to pay them at the retail rate and they pay me at the wholesale rate. So, saying the power company gives rooftop solar customers “full retail credit” for the excess energy they deliver back to the grid” is accurate only to the point that you haven’t delivered an excess amount of electricity, over and above what you used, at the end of the year.

  • BiggerFatterPolitics

    The corporate gang at Duke are among the highest compensated corporate gangsters in America.

    Duke’s Leaking Ash Ponds Continue To Kill and Maim

  • BiggerFatterPolitics

    The corporate gang at Duke are among the highest compensated corporate gangsters in America.

    Duke’s Leaking Ash Pond Continue To Kill and Maim

  • Will E

    solar makes money for the owner.
    combined with EV car and heat pump heating it doubles profit
    and easy make 6000 euros a year is 10000 dollar profit every year in a clean way.
    cheap and easy 100000 dollar in 10 year.

  • Guest #2

    I continue to be amused and yet frustrated by all of these ‘so-called’ experts on renewable energy, most of whom love to throw out soundbites but have no depth of understanding of the electric utility business. I have worked for 17 years in the industry, and I have working knowledge of the power grid and how energy is generated, transmitting and distributed throughout the regions. As with most zealots, the author conveniently distorts facts or offers ‘half-truths’ to support his argument while ignoring facts that don’t quite fit the mold. If the words of the Duke CEO are examined closely, she did not advocate an end ot rooftop solar or distributive generation. Instead, her statement was that the energy RATE being paid to these (typically wealthy) owners of these renewable assets are too high and is forcing other utility consumers to bear the cost of these assets, which is likely true. Instead, the CEO advocates for lowering the energy rate paid to the owners of these renewable assets to account for the costs that the utility is incurring to manage them. Contrary to the author’s statements above, there IS a cost for a utility like Duke to build and maintain transmission and distribution lines to move energy around the grid, and there IS a cost to Duke to be able to take power from these renewable assets and deliver it to other customers. It is NOT free to Duke. Moreover, when the sun doesn’t shine, generation assets such as nuclear, natural gas and coal are there to provide power to everyone, including the ‘green’ customer who has solar panels. The ‘big green machine’ continually shows that it wants to have its cake and eat it too. Green advocates such as the author pretend to be all ‘green’ and environmentally conscious when it suits them, but please don’t turn off their power when the sun doesn’t shine or the wind doesn’t blow. Instead, like the rest of us, they want their share of energy from that $1 Billion nuclear plant that Duke built — but oh, they want to pretend they are not taking that energy or using the power grid to get that energy. And, oh by the way, they don’t want to help pay for the grid to get it to them. Instead, they will hide behind those flashy solar panels on their ‘green friendly’ house while complaining, distorting, blaming others and confusing the issue. The future of renewables is indeed bright, but the hack jobs like this are pitiful.

    • Bob_Wallace

      Part of what you write is correct. There needs to be a financial model that pays end-users for the power they produce from their solar panels but is fair to both end-users and utilities.

      As for what is going to provide power when the Sun isn’t shining – coal and nuclear are likely on the way out. Coal first. Coal will soon be half of what it used to be.

      We have the technology right now to keep the lights on 24/365 with only renewables and storage. It will take at least a couple of decades to build a renewable grid, but that’s where we’re headed.

    • http://zacharyshahan.com/ Zachary Shahan

      Some of what you note is worth noting, but also consider that solar provides numerous benefits that are also not accounted for. In the most comprehensive studies I’ve seen of benefits and costs, it seems that solar power producers should be getting more than the retail rate as long as externalities from fossil fuels are not internalized.

      http://cleantechnica.com/2013/02/21/the-value-of-solar-could-be-worth-much-more-than-austin-energy-pays/

      also worth noting is that it’s not the rich who are driving solar growth these days. it’s the middle class. http://cleantechnica.com/2013/10/28/us-solar-growth-driven-middle-class-americans/

    • Jonny_K

      Not typically wealthy. Typically middle class. This is a disingenuous and off-putting argument. Utilities want to make it a class war, using terms like “usually wealthy” and “free rider.” It takes what should be a reasonable discussion of the value of distributed generation off the table and replaces it with bogus class stereotype passions.

    • Ross

      Wouldn’t it be great if the rest of the world stood still and let you monopolists continue with your old comfortable business model? Welcome to the pain experienced by many an old industry. Your distribution network still has some value and there’s some value left in the core network but your industry is going to have to radically reform itself to the disruptive change that is happening. You’re inevitably going to be getting a smaller slice of the pie so need to cut your cloth to measure.

      Start reforming instead of fighting it.

    • Don Osborn

      As a former
      utility manager, I can tell you that PV generation provides many direct
      benefits to the utility, the rate payers at large and to the electric grid
      itself as it has a rather good match to utility peak loads when such power is most
      needed and the most costly to produce and distribute. In crying “solar is
      unfair to us”, the utilities are being disingenuous. As a dozen recent studies
      in as many states show, including CA, rooftop PV not only benefits the solar
      customer, but also results in net benefits to all ratepayers. It is only when the utilities put their
      thumbs on the scales by inflating the costs and neglecting many of the benefits
      of distributed PV generation can utilities argue that solar and net energy
      metering somehow is a shifting of costs from Solar customers to Non-solar
      customers. Even the recent utility friendly E3 NEM Report to the CPUC states
      that “the NEM accounts [PV customers] appear to be paying slightly more than
      their full cost of service”. In fact, as with energy efficiency, solar
      generation benefits the entire range of customers, participating and
      nonparticipating alike, by providing not only clean renewable energy but energy
      when it is most needed and is most highly valued — during peak periods. As a
      significant part of our energy mix, solar brings real value to all of us. Right now, the bulk of the data available shows that NEM is fair to both the solar customer and to the utility (as well as to non-solar customers).

      • Bob_Wallace

        Your argument makes sense in the early days of solar. Pre- and early-rooftop days solar produces during the daily demand peak. Normally utilities would pay a premium for power. Solar comes in from end-users, offsetting expensive sourcing, and then utilities get to pay back with cheaper off-peak power.

        But a surprisingly small amount of end-user solar can destroy the “sunny hour” peak and drive the wholesale cost of electricity to that of late night supply. That can leave the utility forced to take relatively low value electricity and then have to pay back during early morning and late afternoon/evening peaks with more expensive power.

        Take a look at the pre- and post-end user solar wholesale price in Germany.

        We need a better model than net metering. One that is fair to all.

        • Don Osborn

          We are not yet close to the levels of penetration that would result in such market distortions. Today NEM, a key
          policy that helps to make sure solar is practical for many Americans, yet it is under
          attack by some utilities and extreme conservative allies such as the fossil
          fuel funded American Legislative Exchange Council (ALEC). Until an alternative
          method is developed that fairly accounts for the full range of costs and
          benefits of distributed solar generation, does so in a more cost-effective way
          than NEM, continues the progress made under NEM, and is fairly vetted by all
          stakeholders in a transparent way, NEM is still the most appropriate, economic, and fairest method of accounting
          for the value of distributed solar on the grid.

          • Bob_Wallace

            We may not be there now but looking at how little solar it took to get Germany there it’s clear that we could get there soon.

            Once there, net metering doesn’t make sense. And we’ll get there.

  • Guest

    Pro-nukers hate the info I’ll post and will try to twist it, but here it is:
    The U.S. is already quietly hugely successful with Wind and Solar Energy.
    Here’s how:
    Already installed capacity in the U.S. of Solar Energy is capable of producing the energy-equivalent of 10 nuclear power plants.
    Already installed capacity in the U.S. of Wind Energy is capable of producing the energy-equivalent of 60 nuclear power plants.
    These successes with Wind and Solar energy will exponentially grow.
    These successes with Wind and Solar energy prove how obsolete and unnecessary nuclear energy is.

    • Bob_Wallace

      I wonder about your math. You may not have adjusted for capacity factor?
      In 2013 we got about 19% of our electricity from nuclear and about 5% from wind and solar.

      We’ve got about 100 reactors, so isn’t it more like the equivalent of ~25 reactors?

  • Matt

    So before he stepped down as CEO of Duke how much solar did he add? By end of 2012 Duke claimed access to (not ownership of) 440MW of renewable electric power, while owning 56.7GW of coal/nuclear. I’m glad he is talking the talk now, but when he was driving the largest power company in the US; he did NOT walk the walk.

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