Florida utilities spend $29.3 million to make case to limit rooftop solar

Mary Wilkerson, from Indian Rocks Beach, works to get the head of a Monopoly Man costume straight with the help of her daughter Sarah Wilkerson, (right) as community leaders from St. Petersburg protest in front of Duke Energy in St. Petersburg. They claim Duke Energy is intentionally deceiving Floridians into thinking they are supporting solar with Amendment 1, which will block the solar industry in Florida. (JOHN PENDYGRAFT   |   Times)
Mary Wilkerson, from Indian Rocks Beach, works to get the head of a Monopoly Man costume straight with the help of her daughter Sarah Wilkerson, (right) as community leaders from St. Petersburg protest in front of Duke Energy in St. Petersburg. They claim Duke Energy is intentionally deceiving Floridians into thinking they are supporting solar with Amendment 1, which will block the solar industry in Florida. (JOHN PENDYGRAFT | Times)
Published Nov. 3, 2016

Editor's note: In a story published online Tuesday and in print editions Wednesday, the amounts of political contributions made by Florida's largest electric utilities since January 2015 were incorrect and overstated because of errors made in compiling and aggregating data downloaded from the state Division of Elections database. The utilities have contributed $29.3 million overall, not $42.7 million as first reported. Florida Power & Light contributed $14.1 million overall, Duke Energy $8 million, Tampa Electric $4.7 million and Gulf Power $2.5 million.

TALLAHASSEE — Lost in the tumultuous presidential election and the down-ballot fears, something big has been happening quietly in Florida this year: Electric companies have dropped $29.3 million into political campaigns.

Since January 2015, $20 million of the industry's profits went to finance and promote Amendment 1, the ballot initiative that attempts to frustrate the expansion of consumer-owned rooftop solar in Florida. And another $9.3 million more went to fuel the campaigns of a select group of powerful legislative leaders in an effort to prepare for a prolonged war against rooftop solar. (Note this number is updated after a significant miscalculation of the total in initial reports.)

The bulk of the money is being used to promote Amendment 1 but, if that effort fails, the industry is also investing heavily into the Legislature to create favorable conditions in Florida, as utilities have in other states, to push back against the proliferation of rooftop solar. (The money the companies are allowed to use to finance campaigns does not come directly from consumer bills but from utility company profits, which are guaranteed as regulated monopolies.)

In other states, that effort has included attempts to make solar less economically feasible by reducing the amount the utility spends to reimburse customers for generating excess electricity to the grid through "net metering," imposing new fees on solar users and pre-empting local governments from opening the door to more solar competition.

Former Florida U.S. Sen. Bob Graham blasted the amendment on Tuesday as "deceptive" and unneeded. He warned that if the measure is approved, it would be a harmful step "backwards" for the state's energy future.

"I'm discouraged as a citizen how far we have slipped and see Amendment 1 as a means of accelerating that decline in solar in Florida," he said during a conference call with reporters.

According to Division of Elections reports, the biggest spender on the effort is Florida Power & Light, the state's largest electric utility, which has poured $14.1 million into political campaigns this cycle — $6.1 million into state legislative campaigns, and $8 million to Consumers For Smart Solar, the utility-backed political committee promoting the amendment on the Nov. 8 ballot.

Duke Energy, the St. Petersburg-based company and the state's second largest utility, spent $8 million, including $6.7 million promoting Amendment 1. Tampa Electric Co., the third largest utility, has pumped $4.7 million into the political system, including $3.2 million for the amendment; and Gulf Power has invested $2.5 million, including $2.2 million to the political committee backing the amendment.

The committee has raised more than $26 million, including $6 million from nonprofits and special interest political committees that have received substantial funding from the utility industry. By comparison, records show Florida's sugar industry spent $57.8 million over 20 years to dominate legislative policy. The electric utilities will have spent more than half of that in a single year.

The candidates whose political committees benefited most from the money were all Republicans: Agriculture Commissioner Adam Putnam, who accepted more than $381,000; Sen. Bill Galvano, who got $101,000; and Sen. Wilton Simpson, who received $98,000.

The utility-backed political committee and its surrogate spokespeople have promoted Amendment 1 as a "pro solar" initiative. But rather than open the state to more solar, the amendment asks voters to inject new language into the Constitution that will serve as a barrier to entry for any company that attempts to compete with the utility giants in providing solar energy in Florida.

Graham, a Democrat, suggested that by rejecting the amendment, voters could send a message to the Legislature that they want the utilities to join with solar advocates "to have a constructive discussion" and use the vote "as a springboard for a positive, better energy future for Florida."

But, he warned, if the amendment passes, "it will discourage the expansion of solar by psychologically strengthening the position before an already compliant Legislature and Public Service Commission to erect barriers to solar.''

The utilities argue that homeowners with solar panels still rely on the grid for electricity at night and on cloudy days but don't compensate the utilities enough to maintain their power plants, transmission lines and maintenance crews. The emerging argument is that net metering laws that allow homeowners to be reimbursed for the excess energy their solar panels generate, and tax rebates to solar customers, are unfair subsidies intended to benefit solar users at the expense of non-solar users.

"We are opposed to subsidies that are unfair and regressive," Rob Gould, a spokesman for Florida Power & Light, said in an email to the Herald/Times. "There's a difference between governmental tax break/credit subsidies [such as the property tax credits for solar installations] and subsidies that benefit certain customers on the backs of other customers [rebates, net metering, etc.]."

Gould wouldn't say explicitly what the legislative agenda would look like to oppose these "subsidies." In documents filed with state regulators, and in public statements, many officials at Florida's utilities have made it clear that they want to roll back the current net metering law as utilities have in other states.

Suzanne Grant, spokeswoman for Duke Energy, said in an email that the utility believes "the current net metering policy needs updating, and we believe customers who use the power grid continuously, like solar customers, should pay for grid access, grid services and the backup power they use."

But Graham called the subsidies concept "a false argument." He cited studies commissioned by regulators in states such as Nevada and Mississippi and compiled by the Brookings Institution that conclude that costs associated with more rooftop solar are generally outweighed by the benefits.

"The installation of solar saves customers money because it avoids having to build additional generating capacity, the cost of which in Florida not only gets passed along to ratepayers once those plants are in operation but, as we learned with Duke Energy on the Gulf Coast, they got paid in advance for building nuclear plants that were never constructed," Graham told reporters.

Solar advocates argue that it also provides a net benefit to other utility customers because it alleviates the need to fire up expensive "peaker" power plants when utility use is at its peak, reduces demand for energy delivered by power plants that emit carbons, and offsets the need to construct new power plants.

Graham said Florida should follow Georgia's lead and pass laws that make it easier for property owners to allow third parties to install solar panels on their roofs, not discourage them, and that require utility companies to increase the amount of electricity they generate using solar power.

He echoed the argument of other solar advocates that Amendment 1 is deceptive because it leaves the impression that solar could expand in Florida.

"This is deceptive in that all the things the advocates could say could happen with this amendment can happen without this amendment," he said. "You don't have to have a constitutional amendment to have adequate regulatory power over solar. You don't have to have a constitutional amendment to have safety."

According to utility industry records, the electric industry fears that a surge in rooftop solar also will reduce profits for the investor-owned utility industry, which has benefited from price competition as a regulated monopoly.

"The longer-term threat of fully exiting from the grid [or customers solely using the electric grid for backup purposes] raises the potential for irreparable damages to revenues and growth prospects," wrote the Edison Electric Institute, the investor-owned utility trade group, in a 2013 report.

The 2013 EEI report on "disruptive challenges" suggested that as prices drop for rooftop solar panels, and demand increases, the electric utilities industry faces a "loss of customers." Its business and regulatory models, which depend on a regulated monopoly, face "potential obsolescence," and that the ability of rooftop solar owners to generate excess power, sell it back to the grid or to their neighboring properties poses the "technological obsolescence of existing infrastructure."

The report also compared the electricity industry's existential threats from battery storage, solar power and distributed energy from rooftop solar and other renewable sources to the demise of Kodak and its dependence on film cameras in the age of digital technology, or the U.S. Postal Service, and the threat it faces from delivery companies.

In an earlier 2012 presentation, the trade group warned that the "industry must prepare an action plan to address the challenges." Among the suggestions was to portray the emergence of solar power as a subsidy on non-solar users, as the language in Amendment 1 does.

This story has been updated to correct errors in calculations and updates in official campaign finance reports.

Contact Mary Ellen Klas at Follow @maryellenklas.