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Profile: David Roberts
David Roberts was a participant or observer in the following events:
Some skeptics of global warming embrace a recent scientific study showing that ocean bacteria, not greenhouse gases and fossil fuels, are the primary cause of global warming. Unfortunately for the skeptics, the study is a hoax. The faux study, published in the “Journal of Geoclimatic Studies,” is laden with pseudo-scientific jargon “proving” that bacteria in the Atlantic and Pacific Oceans emit at least 300 times more carbon dioxide than industrial activity, and apparently fools skeptics. A British scientist e-mails the report to 2,000 colleagues before realizing it was a spoof. A US scientist calls the report a “blockbuster.” [Reuters, 11/8/2007] The conclusion of the “study” is especially interesting to those who dispute global warming. The authors write, “[W]e recognize that in [overturning man-made climate change] we lay our careers on the line. As we have found in seeking to broach this issue gently with colleagues, and in attempting to publish these findings in other peer-reviewed journals, the ‘consensus’ on climate change is enforced not by fact but by fear. We have been warned, collectively and individually, that in bringing our findings to public attention we are not only likely to be deprived of all future sources of funding, but that we also jeopardize the funding of the departments for which we work.” [Note: The site hosting the spoof study has disappeared from the Web, but remains for now in Google’s cache.] [Institute of Geoclimatic Studies, 11/3/2007; Grist Magazine, 11/9/2007]
Rush Limbaugh Taken In - Talk show host Rush Limbaugh tells his listeners of the study, apparently misunderstanding a warning from global warming skeptic Dr. Roy Spencer. While Spencer tells Limbaugh that the study is a spoof, Limbaugh tells listeners that the study proves global warming itself is a hoax. Spencer will apologize to Limbaugh for “not being clear.” [WeatherQuestions (.com), 11/11/2007] (Spencer is a scientific adviser for the “Interfaith Stewardship Alliance,” a “coalition of religious leaders, clergy, theologians, scientists, academics, and other policy experts committed to bringing a proper and balanced Biblical view of stewardship to the critical issues of environment and development.” [Interfaith Stewardship Alliance, 2005] Conservative blogger and global warming nonbeliever Neil Craig writes: “This could not be more damaging to man-made global warming theory.… I somehow doubt if this is going to be on the BBC news.”
Hoax Exposed and Revealed - But real scientists quickly knock the study down. Deliang Chen, professor of meteorology at Sweden’s Gothenburg University, says, “The whole story is a hoax.” Two of the report’s supposed authors claim to be on the Gothenburg staff, but Chen says they are not students or faculty at his school. [Reuters, 11/8/2007] The research center cited by the article does not exist. Nor does the “Journal of Geoclimatic Studies,” which supposedly published the study. [WeatherQuestions (.com), 11/11/2007] The actual author of the spoof uses the pseudonym “Dr. Mark Cox” in an interview for Nature magazine’s blog, “The Great Beyond.” “Cox” says he wrote the spoof “to expose the credulity and scientific illiteracy of many of the people who call themselves climate skeptics. While dismissive of the work of the great majority of climate scientists, they will believe almost anything if it lends support to their position. Their approach to climate science is the opposite of skepticism.” He says the science proving global warming “could scarcely be clearer.” To a question asking what he would say to those taken in by his hoax, he replies, “More fool you.” [Nature, 11/9/2007]
A report by the Edison Electric Institute (EEI) finds that within a decade or so, solar energy and other renewable distributed energy resources (DER) could lay waste to the utility business model and to American power utilities. The utility business model, which has remained relatively unchanged since the early 20th century, is not capable of coping with the “disruptive challenges” posed to it by solar and other renewable energy power generation. David Roberts, a staff writer for the environmental news publication Grist, will write of the EEI report in April 2013: “It is one of the most prescient and brutally frank things I’ve ever read about the power sector. It is a rare thing to hear an industry tell the tale of its own incipient obsolescence.” Standard power utilities are “regulated monopolies,” which means they are the sole providers of power in their service areas. The business model relies on the utilities selling power as “overseen” by public utility commissions (PUCs), which control what utilities can charge for their power. Inexpensive solar (photovoltaic, or PV) power “eats away at [that business model] like acid,” Roberts writes. Solar power is not regulated for the benefit of the utility companies. In simplistic terms, a kilowatt-hour (kwh) of solar energy generated by, say, a rooftop solar array is a kilowatt-hour of reduced demand for the utility. Solar power peaks each day at noon, usually the time of most intense sunlight, which is one of the power utilities’ “peak load” times. Power utilities make much of their profits from peak load electricity, as they charge more per kwh for peak load electricity. Roberts writes, “[W]hen solar panels provide peak power, they aren’t just reducing demand, they’re reducing demand for the utilities’ most valuable product.” The EEI report also challenges the myth that power consumers must rely on grid power and not solar power because solar power is not available when the sun is not shining. Battery storage, micro turbine, and other developing technologies are making it possible for many consumers to go entirely “grid free,” to opt out of grid-generated electricity entirely. Duke Energy CEO Jim Rogers says, “If the cost of solar panels keeps coming down, installation costs come down and if they combine solar with battery technology and a power management system, then we have someone just using [the grid] for backup.” If a large number of consumers begin generating their own power and using the grid for backup alone, the EEI report says, the utilities face “irreparable damage to [their] revenues and growth prospects.” Utilities generally anticipate revenues that allow them to invest heavily in fossil fuel plants that will not recoup costs for 30 years. Those investments could be more difficult to recoup if consumers begin generating their own power via solar and other DER power sources, leading the utility companies to contemplate raising the rates of those consumers who do not opt out of grid-based power. The EEI report states: “The financial implications of these threats are fairly evident. Start with the increased cost of supporting a network capable of managing and integrating distributed generation sources. Next, under most rate structures, add the decline in revenues attributed to revenues lost from sales foregone. These forces lead to increased revenues required from remaining customers… and sought through rate increases. The result of higher electricity prices and competitive threats will encourage a higher rate of DER additions, or will promote greater use of efficiency or demand-side solutions. Increased uncertainty and risk will not be welcomed by investors, who will seek a higher return on investment and force defensive-minded investors to reduce exposure to the sector. These competitive and financial risks would likely erode credit quality. The decline in credit quality will lead to a higher cost of capital, putting further pressure on customer rates. Ultimately, capital availability will be reduced, and this will affect future investment plans. The cycle of decline has been previously witnessed in technology-disrupted sectors (such as telecommunications) and other deregulated industries (airlines).” In other words, as consumers begin to opt out of grid-based power consumption, and utilities raise their rates to compensate for the loss of revenue, more and more consumers will opt out, further shrinking the number of consumers paying the utilities to generate their electricity. Even small numbers of consumers using rooftop solar strikes at the utilities’ main profit centers (one reason why German utilities are already feeling the pinch). Currently, less than 1 percent of US electricity is generated by solar arrays. But a projection by Bloomberg Energy Finance forecasts that in some areas of the nation, up to 10 percent of power load will be generated by solar arrays. The EEI report speculates that utility consumers in those areas will see massive increases in their rates as the utilities compensate for the lost revenues. [Kind, 1/2013 ; Grist Magazine, 4/10/2013]
Solar expert David Roberts, a columnist for the online magazine Grist, writes that like most modern industrial systems, the traditional electricity generating utility is extraordinarily “over-engineered,” which he defines as “built to be prepared for maximum demand even though maximum demand is, by definition, rare.” Over-engineering is not necessarily a bad thing; for example, an SUV can be considered “over-engineered” until it becomes involved in a collision, when its capability of protecting its passengers comes into play. The electricity system is also over-engineered, Roberts says, mostly because there is no simple way to store electricity. Demand for electricity must be met by generated electricity; it cannot be stored. “That imposes a certain logic on the system,” he writes. “There must always be enough power generation capacity available to handle the maximum possible demand (what’s called ‘peak load’). The result is that most of our power plants, like most of our cars, spend most of their time parked, idled. They are there for those few minutes of the day when everyone gets home from work and turns on the TV.” Because of the “real-time” nature of the electrical grid, it is susceptible to blackouts. On occasion, less responsive grids are prone to cascade failures, leading to hundreds of thousands of customers being without power. In contrast, Roberts writes, the data grid operating the Internet is “fault-tolerant,” with built-in responsive features to handle blockages, slowdowns, and errors. The Internet uses buffering to increase the durability of the system and reduce the need for overcapacity, and has the capability to isolate and route around faults and failures. Electricity systems generally have neither. These capacities can be built into modern electrical grids, and the costs of such upgrades is declining. But most utility companies do not install such upgrades. Why not? Because, he writes, “the oversight system governing the utilities does not provide incentive for upgrades. These costs must be shared directly with the ratepayer and public service commissions have been reluctant to approve such measures.” Public utility commissions (PUCs) are obliged by law to have utilities provide power at the lowest cost to the consumer, and as a result there is no incentive for utilities to spend more money than necessary upgrading and improving their systems. “There is no way build a new power system while also providing lowest-cost electricity from moment to moment,” he writes. “It’s impossible. The legal and regulatory system is practically built to prevent long-term systemic change.” As the energy production and transmission systems of the United States transform themselves into a 21st-century model, systems will need to be redesigned. Roberts concludes: “We could be doing that with our electrical system. We would be doing it already if we had open, competitive markets for electricity services. Instead we have quasi-public quasi-monopolies practically mandated by law to stick with what they know and nibble around the edges. Until that legal and regulatory system changes, we’ll be stuck with the dumb, over-engineered, wasteful system we have today.” [Grist Magazine, 2/7/2013]
San Antonio electric utility CPS Energy says it intends to cut the amount it pays for solar power generated from residential customers by about half, claiming that some of the city’s power users are not paying their fair share for the utility’s transmission infrastructure. Clean energy activists and system installers say the cuts are intended to cripple the region’s solar industry. Lanny Sinkin of Solar San Antonio says: “There was zero consultation with the solar industry in the development of this proposal. They’re going to kill the solar industry.” CPS, a municipally owned utility that in theory is owned by the ratepayers, wants to end the current system of “net metering,” which allows residential customers with solar panels to use each kilowatt-hour of energy they generate to cancel each kilowatt-hour they draw from the utility’s electric grid—in essence, the residence owners cancel a kilowatt-hour they pay for to CPS (at retail rates) by generating a kilowatt-hour of solar energy. Instead, CPS proposes a system it calls “SunCredit,” which would assign a fixed value to the price of the solar power produced and credit that amount against their accounts. The SunCredit program would give only a little over half of what a kilowatt-hour of solar power is worth under net metering, by crediting residential consumers with solar-produced kilowatt-hours at CPS’s wholesale rate. CPS spokesperson Lisa Lewis says of the existing practice: “I think that it’s not unimportant to recognize that solar customers use poles and wires and the grid. If we move to a situation where more and more customers have solar systems, they leave that infrastructure cost… stranded, and the people who can least afford to pay it are the ones paying for it” (see January 2013). Existing solar power producers would be granted the existing rates until 2023, while new solar producers would begin receiving the new, lower rate immediately.
Decision Already Made? - Although Lewis says the utility is still soliciting feedback on the program and will consider making changes, Sinkin says the utility has already made its decision. Recently, the utility informed the public of its decision during a contentious meeting, when solar installers said the new program would make it impossible for them to sell systems to the public. CPS Energy instituted cuts in its solar subsidies in 2012 when it reduced the size of the rebate it offers to help customers cover the cost of installing their solar power systems at their homes.
Expert Explains Issue - Solar expert David Roberts of Grist explains the issue, writing: “Under net metering, if a rooftop solar customer generates as much electricity as she consumes, she pays nothing. If she generates more than she consumes, the utility pays her. In either case, her portion of the utility’s fixed costs is transferred onto other, non-solar ratepayers. As more and more people opt for solar, fixed costs are paid by a smaller and smaller group of customers, which drives rates up, which drives more and more of them to solar, in a vicious cycle. The utility’s fixed assets are ‘stranded’—it is unable to recover those investment costs because of the shrinking pool of customers. (It’s also worth noting that the first customers to go solar tend to be well-off, which leaves the less well-off paying more, so there’s an economic-justice angle here too.)” Roberts notes that CPS is being ingenuous in its contentions that solar consumers are costing the utility money, as rooftop solar arrays save the utility money in terms of avoided transmission and equipment costs. Moreover, solar power benefits the region in reduced air pollution and carbon emissions. He also notes that CPS did not hesitate to offer its employees $16.4 million in bonuses in 2012 (most of which went to the firm’s top executives), the same year it cut its solar subsidies. Roberts concludes: “The dilemma… is how to align CPS’s incentives so that it can drive rapid solar adoption and reliably recover costs from its fixed assets and protect its lower-income ratepayers from being unfairly burdened. If we can’t figure out a solution to that dilemma, more and more utilities will do what CPS is doing and the spread of rooftop solar in the US, which has barely gotten underway, will slow to a crawl. That isn’t what we want, is it?” [San Antonio Express-News, 6/21/2012; San Antonio Express-News, 4/9/2013; Grist Magazine, 4/12/2013]
Idea that Solar Power Consumers Pay Unfairly Low Share Challenged - Many solar advocates have successfully challenged the idea that solar power consumers cost their area’s utilities revenue (see April 5, 2013).
Utility Agrees to Postpone Implementation - Following the announcement, CPS will agree to postpone implementation of the new policy for a year and to work with solar advocates to craft changes to the policy. [CPS Energy, 5/9/2013; Grist Magazine, 5/15/2013]
Grist columnist and distributed energy expert David Roberts attempts to explain the viewpoints of the solar and the conventional utility industries over utility regulations as they pertain to solar power generation. He calls the issue “unavoidably wonky” but “a pivotal issue” that is “long overdue” for public understanding. The problem between the two has two components: short-term and long-term. The short-term argument between the two camps involves how electricity rates are structured and how utilities compensate, or do not compensate, customers who generate some of their own power with rooftop solar PV panels. The long-term issue revolves around the creation of “an entirely new business model for utilities, one that aligns their financial interests with the spread of distributed energy.” Battling over the short-term issues delays resolution of the long-term issue, Roberts writes.
Utilities' Perspective - About 70 percent of Americans are served by investor-owned utilities (IOUs), the traditional, for-profit, regulated-monopoly utilities that have what Roberts calls “a captive customer base and profits guaranteed by law.” IOUs are leading the pushback against distributed solar energy. IOUs make their profits by:
estimating how much power their customers will need;
estimating the investments they will need to make in power plants, fuel, transmission lines, and so forth in order to meet that demand;
estimating how much they need to charge customers to cover their investments and offer a reasonable rate of return to their investors;
convincing their state’s public utility commission (PUC) that their rates are warranted and fair; and
charging that rate until they can convince the PUC to let them raise their rates.
Residential customers pay the PUC-approved “retail rate” for their electricity. [Grist Magazine, 5/15/2013]
Net Metering - NC State’s Database for State Incentives for Renewables and Efficiency (DSIRE) defines net metering as “a popular and administratively simple policy option [that] allows electric customers who generate their own electricity using solar or other forms of renewable energy to bank excess electricity on the grid, usually in the form of kilowatt-hour (kWh) credits.… In effect, the customer uses excess generation credits to offset electricity that the customer otherwise would have to purchase at the utility’s retail rate. Traditionally, net metering has been accomplished through the use of a single, conventional, bi-directional meter.” In its most simple terms, customers who participate in net metering programs get rebates or subsidies from their IOUs based on how much solar energy they generate for themselves: if they generate 10 hours of solar power a week, they receive 10 kilowatt-hours (at the retail rate) of credit on their electric bills. The policies are in force in some 40 states, though the details of their implementation vary widely from state to state. The utilities say that net metering is inherently unfair, since a consumer who lowers or even zeroes out their utility bill through solar power generation does not pay enough for fixed costs such as power plant construction, transmission line installation and maintenance, etc., even though these consumers still make use of these services. The utilities argue that the complexity of managing these distributed energy producing consumers increases their costs; net metering, they say, makes customers who cannot afford solar arrays subsidize those who can. (This argument has been strongly challenged—see April 5, 2013.) Utilities in many states are trying to end or dramatically cut back on net metering rebates (see April 9-12, 2013). As noted in a January 2013 report that predicted utilities will be forced into near-bankruptcy by increasing use of solar-generated power (see January 2013), many IOUs are attempting to add “customer service charges” to subsidize their fixed costs, and to lower the subsidies paid to rooftop solar producers. David Rubin of Pacific Gas and Electric has said, “We need to set the stage for continued growth in solar in what we believe will be a sustainable way which is to not have solar customers that are being subsidized by the rest of our customers and producing unsustainable rates for those customers.” [DSIRE Solar, 2013; Grist Magazine, 5/15/2013]
Solar Perspective - The solar community is not convinced, Roberts writes, and is actively, and sometimes angrily, pushing back against the utilities’ stance. Recently, some of the nation’s largest solar installers formed an organization called the Alliance for Solar Choice (see Shortly Before May 10, 2013). Their argument boils down to the contention that utilities raise their rates regardless of who produces solar or wind power for themselves. In fact, they charge, utilities raise their rates far more than is warranted to cover what they argue are higher costs due to solar generation. Because of their monopolistic structure, they are able to make extraordinarily high profits even while bemoaning their costs. PUCs guarantee them hefty profit margins (rates of return on their investments) regardless of whether the investments were necessary. They essentially have a captive customer base, Roberts writes, and are used to charging heavily padded retail rates on the power they sell their customers. Utilities have no interest in innovation or competition, he writes, and as a result their customers “are getting shafted all over the country. Utilities overestimate demand, underestimate efficiency, and contract for gigantic central-generation power plants that customers pay for whether or not they need the power.” Roberts cites the examples of Southern California Edison customers, who are paying $68 million a month to subsidize a nuclear plant in San Onofre that has not produced a watt of energy in over a year. Mississippi customers are paying huge amounts to subsidize a coal-fired plant in Kemper County. We Energies in Wisconsin is trying to force its customers to pay for its Oak Creek coal plant, a hugely expensive facility that has been plagued with outages and breakdowns. Roberts says that utilities are not worried about increasing customers’ rates, but do not like the loss in revenue due to solar consumption. “It’s competition they don’t like,” he writes, “the potential loss of their captive customers.” Homes that are essentially “unplugged” from the grid do not impose costs on the utility, and actually save the utility money on transmission and distribution costs and in other areas. Utilities rely on consumers to pay exorbitant rates for their poorly envisioned and constructed power plants, transmission facilities, and the like, Roberts argues, instead of absorbing the losses themselves. [Milwaukee Journal-Sentinel, 6/27/2012; Grist Magazine, 5/15/2013]
Conclusion - While the solar advocates have a stronger case, Roberts says, some of them have become a bit extreme in their view that all utilities are automatically the enemy. “Some utilities, at least, seem to be grappling with this issue in good faith,” he says. But even these utilities, he says, “are struggling with the question of how to appropriately compensate for distributed solar. The fact is, as long as utilities operate under their current business model, rooftop solar really does hurt them.” Roberts says the best solution is to revamp the business model, particularly the IOU. [Grist Magazine, 5/15/2013] The regulatory contract that most IOUs operate under—existing as corporations legally protected from competition, charging rates as approved by state governments, and receiving guaranteed returns—is almost completely the opposite of the free market concept. “It is the most Soviet of economic sectors,” Roberts writes. Moreover, utilities make most of their profits not from selling electricity, but from making investments and receiving returns on them. The more power lines and plants they build, the more money they earn. In the ideal free market, companies profit by competing, cutting costs, and innovating. None of this applies to the typical American utility. As long as they can make their local PUC happy, utilities are free to generate revenue merely by building more facilities, whether those facilities are needed or even useful. Now, though, the paradigm is not as profitable. Utilities’ profits have peaked, and in coming years they will continue to drop, in large part because of the increase in the usage of renewable energy in place of utility-generated energy. Meanwhile, utilities are locked into paying for facilities and improvements for the next 20 years or so, and want to charge customers as much as possible to help them pay off the debts they have incurred and keep their profit margins in place. Roberts says that while society as a whole needs distributed, renewable energy platforms, the utilities do not want them: “As a society, we need energy efficiency and demand response. We need distributed renewable energy. We need to cancel out future power plants and transmission lines. All those things are to the good, economically and ecologically. Yet utilities have every incentive to oppose them, as they are direct threats to their familiar, comfortable business model, which has survived nearly a century unchanged.… We need a ground-up rethink of how utilities work, how they are structured, and how they can be reformed in a way that enables and accelerates long-overdue innovation in the electricity space.” [Grist Magazine, 5/21/2013]
Grist columnist and solar power expert David Roberts lays out three ways the American populace can have relatively unfettered access to solar energy, given the recalcitrance and active opposition of the conventional power utility companies and many lawmakers. Once renewable energy becomes more accessible and widespread, it becomes more of an economic force, creating jobs and generating a revenue stream. “That’s why renewable power remains untouchable in German politics,” he writes, “lots of Germans are directly involved with it.” [Grist Magazine, 9/13/2013]
Leasing - Most American families cannot afford the initial costs of a rooftop solar array, especially when it will take five or 10 years to recoup those costs. Add to that the fact that the homeowner must manage their individual “power plant,” and stay in the home long enough to see financial benefits, and most American families are unwilling to take on such a burden. Roberts suggests that many families may benefit from leasing rooftop solar arrays from companies such as SunRun, SolarCity, or Sungevity. “The solar company effectively becomes a utility,” he writes. “You pay them a monthly fee for the electricity the panels produce.” Most homeowners will either break even on their electricity costs, or save money, in part depending on whether the solar providers in their areas are eligible for state mandates or rebates. Southern California is experiencing quite a boom in solar leasing, with some $1 billion in economic activity being generated since 2007. The National Renewable Energy Laboratory recently found that solar leasing “has enticed a new demographic to adopt PV [photovoltaic] systems that is more highly correlated to younger, less affluent, and less educated populations than the demographics correlated to purchasing PV systems.” By appealing to less affluent consumers, “third-party PV products are likely increasing total PV demand rather than gaining market share entirely at the expense of existing customer owned PV demand.” SunRun president Lynn Jurich says, “[A]bout 75 percent of Californians switching to solar now choose solar power service” over ownership. Other states featuring solar leasing include Arizona, Colorado, Massachusetts, New Jersey, Oregon, Pennsylvania, and Texas. SunPower executive Howard Wenger said of his company’s lease program in August 2012: “It’s growing incredibly fast. We’re at a rate of about 1.5 megawatts to 2 megawatts per week.” [Forbes, 8/9/2012; Grist Magazine, 9/13/2013]
Community Solar - Some 70 to 80 percent of Americans live in buildings unsuitable for rooftop solar panel arrays. One alternative they have is to form communities of solar power users. Together, they can lease or buy solar arrays. Some power utilities own or operate solar power projects that ratepayers can join. Other people are forming their own communities, either in a business or non-profit enterprise. [Institute for Local Self-Reliance, 5/1/2012; Grist Magazine, 9/13/2013]
Solar Power Purchasing Agreements - Solar power purchasing agreements (PPAs) are similar to leases, where individuals buy power from third-party owners and operators of solar arrays. One large organization investing in PPAs is the US military, which is working with SolarCity to lease solar arrays for 120,000 military residences in California and Colorado. Some states have laws making it difficult or downright impossible for PPAs to exist. [Los Angeles Times, 7/17/2012; Environmental Protection Agency, 10/16/2012; Grist Magazine, 9/13/2013]
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