Electric cooperatives let energy innovation shine in
Electric cooperatives in South Carolina moved forward Wednesday with plans that will result in the largest solar installation in the state.
Months ago, we were looking for ways to explore solar energy production on a large scale. We asked Santee Cooper to work with us to grow our partnership in renewable energy and to look for ways solar energy could benefit our members.
We will have that opportunity by year’s end.
As responsible businesses, it was not appropriate to discuss our plans publicly before details were in place. It was particularly hard to remain silent about this project recently as some groups perceived electric cooperatives as working against solar energy instead of working in favor of its cost-effective deployment.
As member-owned, not-for-profit businesses, electric cooperatives have focused a tremendous amount of time and energy over the last several years trying to save our members money in a climate of regulatory uncertainty and increasing prices. We designed and tested a home energy efficiency program that qualified participants based upon their projected energy savings and then used those savings to help members repay a low-interest loan to cover the efficiency upgrades. Our approach became a national model. When it comes to looking out for our members, we put our money where our mouth is.
As we did with energy efficiency, we are applying our “measure twice, cut once” philosophy to solar generation. We will learn some valuable lessons about how to incorporate these resources technically and in a financially sustainable way.
The difficulty to overcome is that today, solar costs more money than conventional generation, even in the estimation of many of its reasonable advocates and even after you factor in hefty federal and state tax incentives. The question is not whether additional costs will be paid, but by whom. If they are paid via tax incentives, all citizens pay based upon their income. If they are paid via rates (without changing rate structures), ratepayers pay according to the amount of electricity they use.
When the discussion turns to distributed generation (power produced in small amounts, often near the point of use) and intermittent power such as solar, the often missing piece of the conversation is reliability. In your electricity bill, you pay for power, but you also pay for meters, wire, transformers, line maintenance and even unused power plant capacity that must remain on stand-by. All of these things are important for reliable electricity service, and the cost of this reliability exists regardless of whether you use any electricity. Rates are structured to collect these costs based on customers’ average use patterns. However, when customers generate their own electricity, they benefit from the power grid’s reliability, but they do not pay their share of those costs, which shift to their neighbors.
These problems are not unique to South Carolina. State regulators in Arizona, Colorado and California, where there a lot of installed solar technology, are also grappling with these issues. Electricity providers, solar advocates and policy makers in our state would all be well-served not to ignore these difficulties and, instead, to insist on finding sustainable answers to these challenges before making big investments. Such problems do not go away on their own. We are excited about this project because we expect the price of solar eventually to be comparable to conventional resources, and we agree renewables such as solar can work. Our job —our responsibility — is to figure out how to integrate them into the power system in a way that maintains reliability, maximizes the value to our members and prevents customers from reaching into each other’s pockets. This new installation will help us do that.
South Carolina’s electric cooperatives have put our money where our mouths are. We did so with energy efficiency, and we are doing so with solar.
Financial challenges presented by renewable technologies can be solved. By creating a real-world laboratory through which our members can access those technologies, we will advance our state’s ability to create a sustainable system that allocates costs fairly, ensures reliability and promotes innovation.
Michael N. Couick is president and CEO of The Electric Cooperatives of South Carolina, the state association of independent, member-owned co-ops, providing power to more than 1.3 million people in 46 counties.