TALLAHASSEE — Citing “steep increases in the prices of gas and groceries,” Gov. Ron DeSantis vetoed a bill Wednesday that would have allowed Florida electric utilities to impose steep fees on businesses and homeowners who install solar panels.
“Given that the United States is experiencing the worst inflation in 40 years and that customers have seen steep increases in the price of gas and groceries, as well as escalating bills, the state of Florida should not contribute to the financial crunch that our citizens are experiencing,” DeSantis wrote in a four-paragraph veto letter.
The governor said that while the measure, HB 741, allowed public utilities to “impose additional charges to recover lost revenues resulting from residential solar generation that exceeds the public utilities estimate,” he concluded the amount was “speculative and would be borne by all customers.”
The bill would have required that solar customers pay all fixed costs of having access to transmission lines and backup energy generation as determined by the Public Service Commission, but the solar customers would not have received any benefits for reducing the utility’s electricity demand.
It was a stunning victory for the solar industry in Florida — companies that make, sell, install, lease and maintain rooftop solar equipment — and a defeat for Florida Power & Light, the state’s largest electric utility, whose lobbyists wrote the first version of the bill.
Advocates praised the governor for listening to them.
“Gigantic win. All credit to the people of Florida, who know a bad deal when they see it — and made themselves heard!” said the Florida Conservation Voters on Twitter.
Katie Chiles Ottenweller, southeast director for Vote Solar, an Atlanta-based advocacy organization, said she was “heartened to see the governor put consumers and energy freedom ahead of monopoly utility profit margins” and said she hopes the veto “sends a clear message that attempts to attack Floridians’ solar rights will fail.”
Rep. Lawrence McClure, a Plant City Republican and the House sponsor of the blll, said he understood the reason for the governor’s veto. “We’re dealing with different economic conditions here in May than we had in March,” he said, adding that he expects legislators to revise the bill and return with a different version.
The Legislature is not expected to override DeSantis’ veto.
FPL spokesperson Chris McGrath also said the company would keep working on it.
“At FPL we are always working to deliver clean, reliable energy while keeping customer bills affordable. We remain committed to finding a more equitable net metering solution for all Floridians,” he said in a statement. “FPL is leading the nation’s largest solar expansion, and we will continue to advance solar that is cost-effective for all our customers.”
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Under the proposal, starting in 2024, many homeowners and businesses with rooftop solar would have started receiving fewer financial credits for selling excess energy back to their electric utilities, a practice known as net metering, and utilities could ask state regulators to impose new fees on all solar customers.
The veto now leaves in place the current arrangement that allows homes and businesses that generate less than 2 megawatts of solar power to sell the excess back to their utility in exchange for a bill credit of 11 cents per kilowatt-hour.
Justin Vandenbroeck, president of the Florida Solar Energy Industries Association, said that the rooftop solar industry employs more than 9,000 people, generates over $10 billion of economic activity and has helped more than 100,000 homeowners invest in solar.
“Gov. DeSantis understands the value of solar as an economic engine and a powerful tool for energy independence here in the Sunshine State,” Vandenbroeck said.
Most states allow net metering
Florida is one of 47 states that allow households and businesses that produce power to sell it back to the grid at a set rate. However, those policies are coming under fire as utilities become increasingly concerned about how the growth of distributed solar energy affects their bottom line.
FPL — and legislators who supported the bill — argued that arrangement is unfair to customers who don’t generate their own power but continue to pay for the costs of maintaining the grid that rooftop solar customers also use.
According to documents submitted to the Florida Public Service Commission, Florida utilities estimate they will spend $700 million paying for solar credits between 2017 and 2025.
The utility companies say that nonsolar customers are subsidizing solar customers.
But solar advocates countered that all utility customers benefit from the private investment made by homeowners and businesses who install or lease solar on their roofs because the investment alleviates the need for the electric utility to purchase or generate expensive fossil-fuel-generated energy.
FPL is not the only major electric utility that sees consumer-generated solar power and the rise of distributed renewable energy as a threat to its bottom line. Several other states, including California, have moved to dismantle or reduce the incentives that gave birth to the rooftop solar market.
About 1 percent of the state’s more than 8.5 million customers sold excess energy back to the electrical grid in 2020, but the arrangement has fueled significant rooftop solar expansion in Florida.
Rep. Anna Eskamani, an Orlando Democrat and vocal opponent of the bill, commended “the thousands of advocates across the state of Florida who made their concerns loud and clear: To everyone who called, emailed, came to Tallahassee and testified during the committee process — this win is for you. But we must keep the pressure on.”
Vetoed now but maybe not forever
It was the third time FPL has attempted to pass a version of the so-called net-metering bill, and Eskamani predicted it won’t be the last.
In 2016, it backed a failed ballot amendment that would have allowed regulators to impose fees and barriers to rooftop solar installation. But this year, the measure became a priority of Senate President Wilton Simpson, a Trilby Republican who is running for agriculture commissioner, and it was placed on a fast track.
FPL has long been one of the largest contributors to legislative Florida political campaigns, but in 2020 it also invested millions into groups with untraceable, anonymous donors that launched attacks on state and local politicians.
According to reporting by the Orlando Sentinel and confirmed by the Miami Herald, FPL executives worked with operatives tied to a series of “dark money” nonprofits, one of which figures prominently in the Miami-Dade state attorney’s investigation into a scandal involving a “ghost” state Senate candidate.
Under the scheme, a candidate with no political background was on the ballot as a no-party option in an effort to confuse voters and dilute support for the Democrat in the race, helping Simpson maintain the Republican majority in the state Senate.
Simpson did not immediately respond to requests for comment.
Sen. Jennifer Bradley, a Fleming Island Republican who sponsored the Senate bill, called the bill “sound public policy that is currently being considered by states across the country” but, she said, the “cost recovery” provision that allowed utilities to impose fees on customers “contained in the final version of the bill triggered the governor’s veto.”
“I understand the rationale for the governor’s veto, and future versions of net metering legislation should not include such a provision.”
McClure, the House sponsor, also predicted legislators will return to the issue again.
“We know that rooftop solar is going to continue to grow in Florida. I embrace that and am a huge fan of that,” he said. “Net metering is not a sustainable solution from an economic perspective, so we need to get where we get the benefit of rooftop solar, and also get the economics right.”