John Klar: Taking from the poor to fund solar panels

Vermont’s supposedly “progressive” net metering program subsidizes residential solar panels by paying homeowners a whopping premium for the solar energy they generate. These costs are passed through to ratepayers, many of whom cannot afford or do not support solar power. This is not only unethical, but unconstitutional: there is no due process by which ratepayers can appeal this extrication of wealth. More Vermonters must understand why their electricity rates are so high — and so unfair.

Vermont’s Department of Public Utilities Commission (DPUC) is authorized by 30 Vermont Statutes Annotated Sec. 8010 to create the net-metering program, under rules that, “to the extent feasible, ensure that net metering does not shift costs included in each retail electricity provider’s revenue requirement between net metering customers and other customers.”

John Klar

As I outlined in an article almost exactly one year ago, that’s precisely what has been done: “This wealth transfer impacts poor and elderly ratepayers, who are forced to subsidize those with the resources to install expensive — and profitable — solar arrays. Further, the solar panels are manufactured using fossil fuels and mining operations (mostly in China), are shipped or flown long distances at environmental cost, and will one day become obsolete toxic waste at further environmental cost. Poor ratepayers are undermined in their ability to install comparable systems because their wealth is depleted by inflated fee structures that Vermont’s statutes forbid.”

Despite my commentary’s very public complaint, the DPUC issued its biennial net metering rate update on Nov. 12, 2020, in which it reduced the net metering rate a single cent. I attended a DPUC hearing last spring, in which I was told I could not, as a mere ratepayer, be granted standing to protest against this inequitable and grossly regressive scheme. Thus, we ratepayers lack any process whatsoever to appeal these rates, though special interest groups are specifically granted party status under DPUC rules.

In its Biennial Report, the DPUC not only ignored my public complaints made on the record on behalf of low-income ratepayers, but it ignored the issue entirely. The Commission’s Report revealingly just omits that statutory requirement that “to the extent feasible … net metering does not shift costs included in each retail electricity provider’s revenue requirement between net metering customers and other customers.” Sounds like clear legislative direction — but the DPUC does not even pay the concern lip service in its report. (Though it says that’s the purpose of the thing!)

The DPUC, noting on page 3 of its report, does not deny there is money transferred:

According to Green Mountain Power Corporation (“GMP”), the additional cost of net-metering means that each 20 MW of new capacity creates a cost shift of $47.4 million to non-participating customers over 25 years. In 2019, GMP interconnected over 29 MW of new net-metering systems.

And to its credit, the DPUC increasingly understands that net metering is only one path forward:

What REV has not persuasively shown is why Vermont ratepayers should pay such a large premium for net-metering systems when the value of those benefits is not commensurate with the cost of net-metered power and when solar can be developed in Vermont using more cost-effective strategies. (p.35).

Presumably this awareness is the reason the DPUC did drop the net metering rate by a penny. But that’s not enough to correct this grossly unfair imbalance.

The Department of Public Service, which has been a very aggressive advocate for consumers (but is similarly swept aside) was noted in the report:

The Department argues that net-metering is among the State’s least cost-effective pathways to advance Vermont’s renewable and environmental objectives. According to the Department, the compensation rates currently paid to net-metering customers substantially exceed the value of the output and the cost of obtaining an equivalent resource elsewhere, resulting in an inequitable cost shift between customers who net-meter and those who do not. … The Department estimates that net-metering systems installed through 2018 are costing customers an additional $37 million annually, or $60 per residential customer. The Department contends that this cost shift falls heaviest on lower-income Vermonters who cannot afford the up-front costs of purchasing a net-metering system. (pp. 13–14).

Numerous solar energy business interests were recounted in “the Report that ignores ratepayers.” This highlights the implicit conflicts of interest that have corruptly plagued every step of this boondoggle rip-off program.

Consider this warning from a 2005 Vermont Law Review article:

By failing to assert consistently the interests of ratepayers through an ecumenical prudence standard, PUCs create a void into which those asserting other interests, such as industry organizations, can creep … Notwithstanding the fact that industry organizations do represent industry ratepayers, individual electricity consumers do not enjoy the support of an organized group outside the PUC to advocate for their interests.

These are not small sums of money: initial installation incentives are substantial; the net metering transfers are additional subsidization. There was never any question that net metering programs would be regressive, which is why the (earlier) Essex Plan included provisions for rebates to low-income electricity consumers: this never happened.

It is unconscionable that our Legislature passed laws leaving it to the DPUC to ignore taxpayers while favoring renewable energy interests. This is perpetuated under Vermonters’ noses while progressives seek to enact yet more regressive policies in the name of helping those they impoverish. In fact, the Vermont Tax Structure Commission recently proposed to subject electricity to a sales tax, compounding the inflated rates caused by net metering. (Presumably, sales of solar panels would remain exempt from sales tax!)

The final irony is that the inflation of electricity prices caused by net metering becomes a selling point for the renewable energy industry. Says one retailer:

Vermont’s electricity rates are more than 43% higher than the national average, but increased control of electric bills isn’t the only reason Vermonters are going solar. When you switch to solar, you can also create and store your own clean, renewable energy to protect your home from outages and reduce your carbon emissions. Plus, there are excellent state incentives to help you start your solar journey for less.

The higher prices go, the more economically attractive solar looks, even though Vermont is one of the worst states for sun in America. And the more residences that install solar systems, the higher the rates will be for ratepayers unwillingly subsidizing them, even if the DPUC graciously drops them another penny in 2022.

This picture should look familiar by now — destroying the poor while claiming to help them. OneCare Vermont, single-payer health care, EB-5, “affordable” housing, free opioids, EV cars, welfare, free lunches, pensions — in these and many other cases, our government purports to rescue us, expanding itself exponentially while making everything worse.

None of this is economically or politically sustainable.

John Klar is an attorney and farmer residing in Brookfield, and the former pastor of the First Congregational Church of Westfield. © Copyright True North Reports 2021. All rights reserved.

Image courtesy of Wikimedia Commons/Public domain

9 thoughts on “John Klar: Taking from the poor to fund solar panels

  1. John Klar,

    You are raising some very good points.
    You are telling me, I could not make my opinions known during a PUC hearing about any energy issue?
    You mean I have no “standing”? That is unreal.
    Wow, that is as bad as it was before the USSR collapsed.
    Did the pro-lobbyist Legislature give the PUC the power to ban ordinary Vermonters?

    The Dem/Progs have been screwing up almost ALL energy aspects they touched in Vermont.
    Instead of a Midas touch, the Dem/Progs have a Destruction touch; just take a look at the chaotic border.
    There is absolutely no sanity whatsoever.
    All of the “thinking”/finagling is lobbyist driven.
    Everyday Vermonters are not involved

    Spending on government energy programs, including Efficiency Vermont, has averaged about $210 million/y from 2000 to 2015, a total of at least $2.5 billion, but Vermont CO2 emissions increased 18% from 1990 to 2015. That means, on average:

    1) These RE projects have been expensive failures for 20 years
    2) These RE programs led to higher energy prices, and higher other prices, than they would have been without those wasteful programs.

    Those who advocate giving the same incompetent RE folks five times as much money per year, to implement the Shumlin/Klein-inspired VT CEP, per mandate of the unconstitutional GWSA, are very far beyond rational.

    Advice: When you are stuck in a pit, it is best to stop digging, and find something better to do, such as increased energy efficiency, which would reduce CO2 at a very low cost per metric ton. See Appendix.

    Regarding net-metered solar, it is heavily lobbied for by Sun Common and allied RE folks
    RE folk, and many Legislators, do not allow any of their RE programs challenged.
    They vehemently protect their heavily subsidized programs and projects.

    Net metered solar pays an owner about 17.4 c/kWh, plus about 3.7 c/kWh is paid to utilities for managing the program, i.e., charged to the utility rate base at 20.8 c/kWh.

    That price should be compared with the NE wholesale grid price, which has averaged about 5 c/kWh, starting in 2009, courtesy of low-cost CCGT gas plants and low-cost nuclear plants, which (thank the Lord) provided at least 65% of all electricity loaded onto the NE grid in 2019. Wind, solar, landfill gas, and methane power plants provided about 4.8%, in 2019, after 20 years of subsidies

    A net-metered homeowner also received about 5.2 c/kWh as federal and state subsidies.

    In addition, the grid had to be extended and augmented to have weather/season-dependent, variable, intermittent solar (and wind) on the grid, which costs, on average, about 2.1 c/kWh (if batteries were involved, the 2.1 c/kWh would increase big time)

    The all-in cost of wind and solar, c/kWh = price paid to owners + subsidies paid to owners + grid extension/augmentation (not paid by owners) + grid support services (not paid by owners) + battery systems (not paid by owners)

    Pro RE folks always point to the “price paid to owner” as the cost of wind and solar, purposely ignoring or belittling the other cost categories.

    This, the all-in cost of net-metered solar is about 24.7 c/kWh
    This URL has a table of the costs of OTHER sources of electricity

  2. All legislators should be required by law to disconnect personal and business uses from the “dirty” fossil fueled grid.

  3. The language in 30 Vermont Statutes Annotated Sec. 8010 and rules of “to the extent feasible, ensure that net metering does not shift costs included in each retail electricity provider’s revenue requirement between net metering customers and other customers” has to have been drafted by the solar industry lobbyists.

    “To the extent feasible……” is incredible language providing a massive loop hole for the solar installer industry by allowing net metering charges to be passed on to ratepayers.

    What’s even more incredible about this language is the fact that our Legislators and the DPUC staff that drafted and vetted the bill and the enabling rules allowed it to become law…….Who do these Legislators and bureaucrats represent…….The solar industry or the people of Vermont?

    Let’s add another “incredible” about this language to the incredible list…….Net metering does nothing to mitigate climate change. Net metering is a parasite that sucks money from those least able to pay…….It only benefits the solar industry and lobbyists who were able to sell this bill of goods to our naive representatives working in Montpelier…….Quite remarkable.

  4. Solar systems can be deemed racist, by leftist standards. Anything that is a disadvantage to the lower income is labeled racist by Vermont’s radical leftist
    Just throwing that out there

  5. I used PV at my former home but I was totally off-grid and not grid-tied, thus net-metering didn’t apply. Most of my system was paid for entirely by me with zero tax credits; it was small but what I could afford. At my present home I’m just tied to the electric grid with no PV. I absolutely don’t believe we should be subsidizing those with the financial means to install grid-tied systems. My electric bill keeps going up despite my spartan use of power; can only imagine what it would be like if I weren’t so careful with my usage!

    I don’t have any issues with the use of PV(or wind) but I think that either they are private systems(and paid for privately) or public systems in which case it’s the public that benefits and not a private owner. A private system using net-metering imposes costs on the public for the primary financial benefit of the owner of the PV array.

  6. I do NOT have any solar Power by my own choice. Why in hell do I have to pay higher electric bills to support Green Mnt. Power ? If a neighbor wants it, let they Pay for it. At age 78 I choose Propane for my Heat and Cooking I pay a fixed rate Year round, by budget plan. I did some years ago purchase and install with MY OWN FUNDS a Back up generator. Now, I must pay a higher electric rate to subsidize those who install solar systems. It appears that the STATE is bound and Determined to FORCE US to their will, GOOD OR BAD. their Mantra seems to be TAX AND SPEND.

  7. “Every two years, the Vermont Public Utility Commission is required to assess the incentives offered to new net-metering systems and whether they should be adjusted upward or downward. The purpose of this assessment is to ensure that the pace of net-metering deployment is consistent with Vermont’s policy objectives and to ensure that the net-metering program is not having an undue adverse impact on rate payers. The introduction to this Order provides a high-level summary of the key reasons for the decisions made in the Commission’s biennial review and their net effect.”

    Every 20 MW of installed capacity shifts 47.4 million dollars over a 25 year period on those of us not participating.

    That should kill it right there. Why is net metering still a thing?

    If you want solar, install solar, charge your batteries and plan to turn the dryer when the batteries are full and the sun is shining. My neighbor did that. I go to his house for welding. No grid connection.

  8. More regressive taxation. It’s a constant attack on the middle and lower classes by those who know better. Solar is a joke in VT and any business that can’t stand alone should not exist. Subsidies for solar are beyond frustrating. They destroy our landscape and wildlife. GMP’s largest solar array on Mountain View in Williston is a HIGH FENCE facility. No more deer and bear accessing that giant parcel of food. All in the name of the environment?

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