Why net metering is a farce
Let me tell you a story.
This story is about a far-off place that existed a long time ago. It was called Energyville. Now Energyville was located in a remote place in a remote country. In fact, it was damn near a hundred miles to the next town with more than a hundred people in it — but that’s how the Energyvillians liked it.
Like any town, however, Energyville had its hot-button topics. In Buffalo, people talked about snow. In Seattle, they talked about rain. In Energyville, people talked about how expensive electricity was:
“That damn privately-owned utility. They’re overcharging us. They always have.”
As you might expect, this went on for years. It never stops snowing in Buffalo, it never stops raining in Seattle, and privately-owned utility companies never stop overcharging customers — in Energyville or anywhere else. Everyone knows this; there is no debate about it. People understand that electricity is something they need almost as much as they need water — and so as long as those investor-owned utilities don’t gouge their customers too terribly deeply the general public doesn’t complain very much.
Most of them don’t even look at their bill.
The problem in Energyville, however, was that the citizens were smarter than that. They actually did look at their bills and there came a point (a long, long time ago) when they finally started saying, “these rates are too damned high.” It was right about the point where the average price of electricity was $0.1041/kWh in the larger country — of which Energyville and its citizens made up just one speck of a town in a province of about fifty provinces all generically associated with one another by a piece of paper which had nearly outlived its usefulness.
Right about the time when the average price of electricity around the country was more than twice that of solar — not even including associated “access fees” and demand charges.
As it happened, an upstart of a progressive was running for mayor of that also progressively minded town at the time: a man named Ubedayah Dunneed. He ran on a platform of distributed energy via wind and solar and promised to make Energyville the first off-grid town in the country of Greatprovinces. His campaign slogan rather predictably became:
Ubedayah sez U. Dunneed their power!
Ubedayah wasn’t a mathematician, but he knew that with a little cooperation between residents, some solar and wind power, and a relatively small number of grid-scale batteries they could all cut their costs significantly and wave goodbye to the gouging utility. He knew they’d have to install significantly more renewable energy generation than they probably needed, he knew the federal rebate wouldn’t cover the total cost of their project, and he knew they might to waste quite a bit of extra power at times, but in exchange they could cut their costs, snip the 100-mile long power lines, and tell the privately-owned utility of Grift and Grift, Inc. to take their product and shove it.
It would be worth it.
Ubedayah was an engineer by trade, but he could also read English and was capable of some rudimentary accounting. Years previously, he had been among the first to actually look at his power bill. He saw things like “Line access charge”, “Monthly maintenance fee”, and “Service charge” and saw that those fees always amounted to a rather alarming percentage of the small amount of power he used at his modest residence. He assumed, of course, that the first fee was roughly associated with being a customer, the second was associated with maintaining his ‘share’ of the grid, and the third was a slop figure that utilities always threw in to account for the 400 people they employed per million customers served (and to make sure that utility bills were properly regressive.) [Even Ubedayah never asked himself why, as a customer, he ought to pay ‘his share’ of the grid for a private company. The local Walmart never asked him to pay ‘his share’ of keeping the parking lot paved or the lights on. It was all a very curious thing.]
So sure, the ‘service charge’ was only $3.41/month but it netted them $3.41 million every month ($40.92 million/year) to cover their 400 employees — 250 low-level people being paid an average of $36,000/year inclusive of benefits, 145 of whom averaged $90,000/year (transmission line workers and such), and 5 of whom shared $18.87 million yearly with their shareholders and lobbyists in Washington — the Greatprovinces national capital which coincidentally shared its name with another lesser known country of a different era.
There were a thousand common shares of stock in Grift and Grift, Inc. — of which 900 were owned by two brothers named Charles and David. They paid the CEO of the company a salary of $3 million annually and the remaining four VIP’s $1 million each. That left $1.87 million for lobbying and $9 million for the pair of them to split annually with the rest of the lesser shareholders. Those other shareholders took their million — nine grand per common share — but Chucky and Davy pocketed $4.05 million apiece. Before you even included any of the profits they made per unit of energy sold.
$0.75 per month from each and every pocket of each and every customer of Grift and Grift, Inc.
Perhaps as importantly, those customers all paid $0.1558/month for the privilege of having lobbyists in Washington work directly against their own interests — all through the magic of opaque accounting. Of course, none of this ever came to light in Energyville until Ubedayah arrived on the scene with his flashlight and spectacles and started sniffing around a little.
Unsurprisingly, he won in a landslide. In fact, of the 8,558 votes which were cast in a town having just 9000 registered voters, he received 8,555. (The local statistician later concluded that the three votes he didn’t receive may well have come from a few members of the Blind Ladies Open Bridge club — “The BLOB” — who continued voting long after they could no longer see who they were voting for because they still felt it their civic duty.)
Upon inauguration, Ubedayah immediately set to work on his plan. He knew “net metering” was a farce —regardless of where it was implemented, utilities always gained more advantage out of the arrangement than did their customers. It was just the way things were. No utility with lobbyists worth their salt could be compelled to lose any money on any of their solar customers and thus the default arrangement was *ALWAYS* that the utility profited on a customer-to-customer basis. Utilities looked at distributed renewables as a threat to their business model and thus fought them from start to finish —despite all the while profiting from them.
In essence, they were complaining about lost profits for power not sold — and attempting to repackage that as somehow equating to lost line fees despite their bills clearly itemizing components. They were complaining that they couldn’t double dip on their solar customers anymore.
Worse, utilities tended to spread a good deal of misinformation about solar customers ‘not paying their fair share of grid upkeep’ because they knew the uninformed general public could be relied upon to lightning rod that misinformation — words like “not paying” and “fair share” were emotionally charged and would guarantee plenty of people got mad enough to help them fight independent solar and wind power.
“I’m not going to pay for those damned freeloaders!”
…the average moron would say.
Never realizing that the early adopters of wind and solar were the ones paying extra to help make sure that the MUCH HIGHER future costs to everyone would ultimately be lower. In other words, the real freeloaders were the ones complaining about the non-freeloaders. Renewable energy people took it as a responsibility to consider negative externalities in determining their courses of action. Others didn’t. Utilities and fossil fuel barons just played on the idiocy of the general public. Why fight the war yourself when all you have to do is convince a whole lot of white-and-pure-as-the-driven-snow but mindless sheep to run in the wrong direction and take all the black sheep with them straight off the metaphorical cliff?
So Ubedayah knew that utilities with money to burn and profits to protect would (and did) pit some of their customers against the rest by falsely claiming that solar customers were taking advantage of the rest— when in reality Grift and Grift, Inc. and other utilities just like it were merely trying to preemptively preserve their entitlement to continue to gouge customers — since that’s the way it had always been.
It was never the case and IS NOT the case that solar customers pay less than their share for line maintenance.
In point of fact, they actually pay far more per unit power delivered — ten times as much if you consider a customer who generates 90% of his/her own power renewably. What all of this boils down to is private entities with fishy accounting practices attempting to ensure that their profits continue to increase and to guarantee that they cannot suffer any losses — regardless of the fact that their principals made the decision to invest in nonrenewable energy long after they knew it was risky and more costly to do so. This isn’t “free market” by any stretch. It’s corporations protecting their interests far beyond what individual consumers ever could. It’s capitalism run amok to the chagrin of the public — those people who always receive the final bill.
It’s large corporations guaranteeing their profits and ensuring that the lion’s share of the costs are invisible as long as possible until John Q. Public gets the bill for all of it in the mail.
To return to the story…Ubedayah knew that people like Charles and David typically had Oil, Coal, and Gas interests as well, and sought to ensure that they could sell all of those commodities to their utility interests regardless of the impact it might have on the world’s environment. Worse, they were entitled to overcharge their customers for this “service” in Energyville and everywhere else. When it came time to cleaning up the mess, the customers would pay and Chuck and Davy would be long gone.
The system was utterly genius in its deception. None of the individual customers were paying a significant enough amount of money to bother chasing after “a few pennies” and as a result, ravenous vultures sat atop the pile buying whatever legislators they needed to and spreading misinformation to discount the benefits of renewable energy versus the type they were making the most money from (discounting, of course, pollution.)
They knew it was disingenuous to ‘grudgingly accept’ net metering as a ‘compromise’ because they knew that the vast majority of the benefits associated with net metering accrued to the utility NOT to the customer. Of course they lived in death fear of the entire grid becoming decentralized, but even that was a farce — considering that big money interests always had the advantage of installing at large scale and cutting their own costs, and considering that the entire grid becoming decentralized is at best a far off dream they would have by far the greatest influence in developing.
Plus, they could always out-compete Mom-and-Pop localized generation of renewable power, and the truth was that they could also install grid-scale renewables for a far lower long-term cost than installing any other type of power plant — and improve their own product if they wanted to. Why didn’t they want to?
That was simple: they still had nonrenewable resources in the ground and they didn’t want to strand those assets — regardless of the cost to the public they represented.
What you had, essentially, was fossil fuel people in bed with electricity people and not enough Xanax to go around. The fossil fuel guys were all petrified of having over-invested in commodities which were never going to come out of the ground — despite having known for forty-plus years this was the case — and so they made damn sure that the utilities would keep buying their burnables regardless of the documented costs to the public and global health.
In turn, the utilities fought solar tooth and nail and engaged in insincere “compromises” in which they would actually complain that residential customers were providing them power to sell — all the while pocketing not only the present versus the future value of that commodity but also bilking their customers with an even more regressive set of associated line charges and access fees.
And demanding they pay more ostensibly because of some imagined future where the grid collapses because there are no longer enough customers to gouge from — which is exactly equivalent to saying that individual customers are NOT paying a proportionally equitable series of fees for line maintenance despite basing the first half of their analyses on the premise that they are!
The only conclusion possible in this situation is that utilities are yet another set of entities which are “too big to fail.” Thus customers are expected to pay whatever those utilities demand — which is nothing more than a proxy for what their shareholders demand, which is fundamentally equivalent to saying what fossil fuel companies demand.
All of it tied up in a nice convenient bow by legislators who do just exactly what they’re told to do by big money interests because voters don’t matter at all anymore. Proof? The President of Greatprovinces is an Orangutan who’s been negotiating with the world’s biggest provider of natural gas and the second largest producer of oil for well over a year.
Maybe the true Energyvillians are everyone except the people who live in Energyville.
If you liked this story, please give it a clap, a comment, etc. I also write on Quora and am responsible for the world’s first and only Negative Carbon Roadtrip.