Solar Wars

Dawn may be breaking for big solar in Georgia, but not without a storm.

Last week, the Georgia Public Service Commission, the all-Republican elected utility regulator, did the improbable: It approved its own plan to force Georgia Power to more than triple the company’s flagship solar program.

The move followed weeks of debate and jousting between environmentalists, conservative groups backed by special-interest money, the tea party, and a solar start-up. Interestingly, the state’s largest utility, which serves about 2.4 million customers, didn’t object to adding 525 megawatts of solar power to its portfolio by 2016.

“I see it as part of the planning process we go through every three years,” says Kevin Greene, a Troutman Sanders attorney who represents Georgia Power. He added that the expansion shouldn’t make power bills higher.

The move was heralded as a bold step. But even after the growth, very little Georgia electricity will come from solar. Most of the rest comes from a mix of coal, natural gas, and nuclear. For comparison, the solar panels atop the Atlantic Station IKEA alone produce 1 megawatt of electricity.

But there are some people who are gearing up to fight for more solar — and the usual suspects stand ready to push back.

To misquote an old movie, solar energy is legal in Georgia. But it’s not 100 percent legal. It’s legal to make it, it’s legal to use it, but unless you’re the proprietor of a utility company, according to Georgia Power, it’s illegal to sell it.

Georgia law, the utility claims, grants it the sole right to supply electrons in its territory, which includes much of metro Atlanta. Its executives, lawyers, and army of lobbyists under the Gold Dome cite the Territorial Electric Service Act of 1973, which divvies the state among Georgia Power and a host of electric membership corporations and other small-ish players.

Georgia Power has pointed to that law in cease-and-desist letters to the likes of North Georgia’s Rabun Gap-Nacoochee School, which in 2010 wanted to strike a deal with a solar installation company to install panels on its roof and pay for the power over time.

That, Georgia Power claimed, amounted to the school buying power from someone beside itself — and was an illegal transaction, the utility says.

The argument in letters like that “chills” the market for solar power in Georgia, says John Sibley, a senior policy fellow at Southface, an Atlanta-based sustainable building nonprofit and self-described solar advocate. Sibley thinks the 1973 law, which was drafted long before the dawn of Big Solar, has nothing to do with regulating sun power and that a Nacoochee-type deal is legal.

Mark Bell agrees. He’s president of Empower Energy Technology, an Atlanta-based engineering firm that focuses on installing energy-saving technologies for businesses. And he’s board chairman at the Georgia Solar Energy Association, a trade group that counts solar professionals and companies from electricians to lawyers.

“Third-party PPAs are legal instruments in the state of Georgia,” he says. (A third-party PPA is a fancy word for what the Rabun Gap-Nacoochee School wanted to do: essentially have a company lease space on rooftops, install solar, and sell the electricity to the building inhabitants or even the greater power grid.)

But Sibley and Bell’s interpretation has not been proven in court. Neither has Georgia Power’s. In the meantime, the cease-and-desist letters are doing their work. Georgia Power guards the Territorial Act (and its turf) jealously.

That uncertainty, says Sibley, is one of the biggest problems in the regulatory environment for solar in Georgia.

Until either a court or the Legislature clears the haze, the outlook is foggy for people who are trying to calculate if they can save money — or make money — by generating power from the sun.

Last year, a new company called Georgia Solar Utilities burst onto Georgia’s growing clean energy scene. The Atlanta-based firm asked the PSC for permission to build a big, utility-scale solar farm, but got turned down based on the Territorial Act. So Georgia Solar Utilities walked across the street to the Gold Dome and asked state lawmakers to help them in their efforts by penning legislation. The result: House Bill 657.

As the bill is now written, it would set up one statewide, PSC-regulated solar “bank” that would secure the financing to source as much solar power as Georgia demands. It would measure that demand by asking people on their power bills if they wanted the clean energy. Georgia Power would be obligated to buy based on customer demand, subject to PSC oversight and price controls.

It’s what’s “politically possible,” says Robert Green, a serial utility entrepreneur and CEO of Georgia Solar Utilities.

The bill skirts the Territorial Act, but Georgia Power is still not impressed and stands ready to fight. State regulations, Georgia Power spokesman John Kraft says, already provide a process for setting up new power generation when it’s needed and that the result is cheap, reliable energy — be it coal, nuclear, solar, or some other fuel. Georgia Power has previously frowned upon solar, citing either the state’s geography or cost. But Kraft emphasized the utility would support cost-effective solar regulated wisely.

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“Creating a new sole-source provider of solar power, we don’t think, will benefit our customers or the competitive solar industry in this state,” he says.

But Georgia Solar Utilities’ Gold Dome proposal comes with a tall, tasty side of sun tea: Georgia’s most outspoken Tea Party activists are on board, arguing Georgia regulation now puts blinders on the free market.

Debbie Dooley of the Atlanta Tea Party Patriots says the bill would break what she called a monopoly: Georgia Power. Trying to halt solar, she argues, is like telling Orville and Wilbur Wright that they ought to stay on the ground.

Bell, however, says his organization is currently neutral on HB 657. “It’s a pretty novel concept, one we haven’t really seen in the market yet,” he says. He’d like to see clearer detail on how the utility or central solar entity would be structured and how it would award projects.

“From our standpoint, it’s ... some level of hurdle,” says Bell. “It’s nebulous to us at this point how all that would operate.”

What GSEA wants to drive home, says Bell, is that Georgia should clarify its positions on such things as PPAs and the value of solar — not just in terms of dollars but also clean air.

The PSC exists to make sure Georgians don’t get gouged for some of the things they have to buy, like electricity. So it’s always looking at dollar signs.

But it’s hard to say what solar costs, except that it’s much cheaper than it used to be.

Bell says the cost of installing and starting a solar array on a commercial building’s rooftop is now a little more than $2 per watt installed, versus about $10-$12 in 2007.

But how much does it cost to run a lightbulb for one hour with power generated by the sun? That depends. Unless a Georgia building is completely off-grid, it gets most of its electricity from a mix of fossil fuels and nuclear power. Power bills reflect a sort of regulated average among all those sources.

So the price people see on their bills depends on a lot of things, such as demand, the season, and the price of natural gas and coal. If those fuels are expensive, relatively cheaper solar could drive down the average power bill. If those fuels are cheap, solar would bring up the average.

One price point for solar is 13 cents per kilowatt hour, or kWh — around what Georgia Power pays for some solar that it buys. A newer idea should cost less.

At least some of the bids coming in from solar companies on a new Georgia Power contract are under price point. (An average Atlantan paid about $0.108 per kWh before taxes and fees in June this year, according to this writer’s power bill.)

Commissioner Stan Wise, the PSC’s sole “no” vote on solar growth, remains skeptical: “We’ve got more power than we need and we’re adding more?” Wise accused his colleagues of “Washington-style feel-good” public policy rather than protecting customers from a form of electricity that he thinks is not yet economically proven, such as is the case with coal, natural gas, or nuclear.

While solar’s getting cheaper, coal, at least, is getting pricier. Or, to put it in the words of Georgia Power parent Southern Company CEO Tom Fanning at its annual general meeting this year, the Obama administration has “declared war” on coal.

And coal is taking a loss in Georgia. The PSC on July 11 also ratified a Georgia Power plan to retire 2,100 megawatts of coal capacity that’s too old to be worth bringing up to today’s green standards. The utility is replacing that coal by moving toward natural gas and, eventually, more nuclear. Crews are currently constructing two new reactors — the first the country has seen in decades — at Plant Vogtle, an existing nuclear site near Augusta.

Last Thursday’s PSC vote settles only round one. Plenty of signs suggest round two is coming and that it will be brutal.

Georgia Solar Utilities will bloody its knuckles if it has to for HB 657. It has its eye on becoming that solar bank proposed in the bill. Georgia Power is also no slouch at legislative fights, which the utility made clear when it pushed a financing deal it wanted for Plant Vogtle.

Sometime this fall, the state House Energy, Utilities and Telecommunications Committee plans to hold a hearing on HB 657. And Dooley, of the Tea Party, says she and her allies might even consider asking for legislation to break apart the Territorial Act when state lawmakers reconvene in January.

Solar is a polarizing and emotionally charged issue, notes Commissioner Chuck Eaton. It’s attracted money, lobbyists, activists, media, and public interest — very unusual for his normally sleepy regulatory body. “If we were talking today about adding 500 megawatts of natural gas capacity, you would not have one-one hundredth of the complexity and attention.”

Expect even more attention — and debate — in the months ahead.