APPA advises FTC on consumer protections for solar energy

The American Public Power Association (APPA) cautions that the Federal Trade Commission (FTC) needs to do its homework on the complex world of distributed electricity before its starts drafting consumer protections for rooftop solar power.

That’s one of the chief themes included in comments that APPA filed with FTC on Aug. 22. APPA and its Vice President of Policy Analysis Allen Mosher had participated in a June 22 FTC workshop on completion and consumer protection issues in solar power.

In 32 pages of comments, APPA said the nation’s electric grid is a complex system of infrastructure. Electric utilities, including those owned by small cities and towns, typically have an “obligation to serve” the public with power around-the-clock. This makes the utilities different from rooftop solar providers, APPA said in its comments.

APPA cautioned that many services in the electric power sector will remain heavily regulated, “making it is difficult to predict whether specific policy interventions will yield more competitive outcomes.”

“Public utilities and solar distributed generation (DG) providers have different business models and in fact are selling different products and services to end-use consumers,” APPA said.

“Solar DG firms can take advantage of the utility’s obligation to serve by seeking to avoid paying for power supply reliability and common network costs or to shift costs to non-solar customers,” APPA said. “In particular, rooftop solar business models predicated upon utility net energy metering (NEM) have the direct effect of shifting costs from rooftop solar customers to other utility customers.”

“Claims that rooftop solar also results in cost savings for the utility as a whole that offset these cost shifts, theoretically leaving non-solar customers no worse off, have not been demonstrated,” APPA said.

“Rooftop solar also needs to be compared with other supply alternatives, including utility-scale solar and wind and distributed community solar, that may have lower total costs to meet public policy objectives and provide reliable and affordable electric power to the public,” APPA said.

“In power systems, supply and demand must be exactly in balance at all moments in time. Power systems therefore have complex systems by which certain resources, particularly generators, change output to meet changes in load and other power system conditions,” APPA said.

These 2,000 public power systems provide electricity to customers in every state except Hawaii, provide over 14% of all electrical energy sold throughout the United States, own over 10% of the total installed generating capacity nationally, and serve over 48 million people. Most public power utilities are small distribution utilities located in and operated as departments of cities and towns.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.