The American Legislative Exchange Council (ALEC), a "stealth business lobbyist" that writes legislation favoring the interests of its corporate members, is moving into the intense debate on net metering for solar.
The move illustrates just how significant solar PV has become in discussions about the future of utility policy.
ALEC is a nonprofit organization that brings corporate members together to draft "model" legislation and pitch it to thousands of state and federal lawmakers. The group has become well known in the clean energy sector for its efforts in 2013 to push legislation to weaken state-level renewable energy targets. So far it has been unsuccessful in getting any of those laws passed.
In early December, ALEC will be holding a task force meeting on energy and environmental issues in Washington, D.C. It has now included net metering on its list of priorities for "model legislation" in 2014.
ALEC recently put together a draft resolution on net metering that will set up discussions at next month's task force meeting on writing laws changing net metering policies.
As currently written, the resolution lacks detail. But the broad framework mirrors the current debate within utilities about how to restructure crediting mechanisms for solar owners:
- Update net metering policies to require that everyone who uses the grid helps pay to maintain it and to keep it operating reliably at all times;
- Create a fixed grid charge or other rate mechanisms that recover grid costs from DG systems to ensure that costs are transparent to the customer; and
- Ensure electric rates are fair and affordable for all customers and that all customers have safe and reliable electricity.
The compromise reached in Arizona earlier this month that created a small fixed charge for solar owners was based on this framework.
"I don't see anything particularly unexpected in there," said Shayle Kann, vice president of GTM Research. "But the model legislation that could come from it would be very informative."
Although the resolution doesn't reveal much about what ALEC may ultimately draft for 2014, its partnership with leading utility organizations show it is serious about the effort.
The Edison Electric Institute (EEI), a trade group for investor-owned utilities, helped write the resolution with ALEC. And Arizona Public Service, a utility at the center of the battle around net metering policy, is also a member of the organization's energy and environment task force.
"We supported them. [...] We worked with them on that resolution," said Rick Tempchin, executive director of retail energy services at EEI, in a video recorded surreptitiously by the Energy and Policy Institute.
Over the summer, EEI released a report warning that distributed generation technologies like solar "directly threaten the centralized utility model" and called for increased attention on how to manage disruption in the power sector.
Months later, EEI began spending money on a campaign to support changes to net metering policy in Arizona -- adding to the $9 million already spent by Arizona Public Service.
"We're getting into it when our members want us or need us," said Tempchin.
It's no surprise that investor-owned utilities worried about declining revenues are clashing with the solar industry over net metering. The conflict has been steadily brewing for years in California and Arizona. But having an organization like ALEC enter the fray may expand the fight to a wide range of states.
"I would bet that ALEC's model legislation would accelerate the net metering issue in more markets," said GTM's Kann.
So far, ALEC has failed to get traction in its campaign to extinguish state-level renewable energy standards. Once renewables targets were passed and local businesses grew as a result, it was difficult to get ALEC's laws past a strong clean energy constituency.
The same thing happened with net metering in Arizona, where the solar industry showed up in force to oppose Arizona Public Service's proposed fees on solar system owners. The state's Corporation Commission ended up preserving net metering, adding a fee orders of magnitude lower than what the utility wanted.
The net metering battles have been largely contained to a couple states. Would sending ALEC's legislation around the country create an all-out war?
"Right now, there are a few states likely to be the next battleground, Colorado in particular. But the solar industry would have a lot harder time combating attacks on many fronts at once," said Kann.