ANAHEIM, Calif. — A new poll of U.S. voters and their energy preferences reveals a split on customer trust in utilities and large energy companies, and heavy support for solar generation.
The Global Strategy Group, in collaboration with Solar Energy Industries Association (SEIA), released the poll on Tuesday at the Energy Storage International / Solar Power International Conference. The results highlighted a growing consumer appeal for policies that advance solar power, including net metering and renewable energy mandates.
"Consumers hate the fact that utilities can control their choice of electricity," Dan Whitten, SEIA's vice president of communications, told Utility Dive. Many of SEIA's members — solar manufacturers, installers and developers — profit from pro-solar and pro-distributed energy policies.
The poll said 88% of voters agreed that utilities should not be able to block residential solar. That margin increased to 96% when asking "opinion leaders," or voters who self-identified as being college-educated, employed and engaged in public policy news.
"I think utilities are incredibly responsive to their customers and what this survey tells us is that customers want solar."
Abigail Ross Hopper, President and CEO, SEIA
At stake is the way utilities would reward distributed solar customers for selling the excess energy they generate back to the grid as utilities work to establish a transition from net metering rates. In recent post-net metering debates, some utilities argue that less competitive export rates for rooftop solar do not necessarily reduce solar deployment, especially given certain commitments for utility-scale solar.
The survey is meant to provide data to show "that a high percentage of the people we polled are resentful of the idea that utilities can restrict their options," Whitten said.
With customer choice debates occurring across the country, more utilities are trying to address their customers' demands.
However, SEIA president and CEO Abigail Ross Hopper says the more important takeaway is customer support for solar power.
"I think utilities are incredibly responsive to their customers and what this survey tells us is that customers want solar," Hopper told Utility Dive. "I don't think customers have a particular care in the world about who owns it or how it gets there, they just want to make sure it happens."
The survey also highlighted support for a 'fair' net metering policy, a 50% renewable portfolio standard for utilities and other consumer attitudes toward the market, as highlighted in the graph below.
The online polling was conducted on 750 registered voters and on 480 opinion leaders. Each survey question asked the voters to identify their approval or disapproval on a scale of 0 to 10, with "5" being neutral.
The state consumer advocate says the 50 MW project is a bad deal for ratepayers, but others say Indiana can’t delay on clean energy.
Indiana consumer advocates are split over a solar proposal that would boost clean energy in the state but at a high cost-per-kilowatt to customers.
The state agency that represents ratepayers says Vectren’s $76 million project is a bad deal for everyone but the utility, which would build and own the plant.
In testimony to state regulators, the Indiana Office of Utility Consumer Counselor said the project is “structured to deliver financial and public relations benefits to Vectren under the otherwise noble guise of developing clean energy.”
A nonprofit consumer advocate, though, says that while the 50 megawatt project isn’t perfect, the state’s clean energy transition can’t wait for such a plan.
“We can sit here and argue — which we have for decades — about the way we regulate utilities, the way in which we recover costs,” said Kerwin Olson, executive director of Citizens Action Coalition. “But the planet’s not waiting for that conversation to conclude.”
Citizens Action Coalition has a history of supporting clean energy and fighting utilities over rate hikes. In this case, the Sierra Club agrees with it, arguing that the project’s biggest problem is that it’s too small.
Diversification’s price tag
Vectren, a small utility in southwest Indiana, announced plans in February to build a 50 MW solar plant as part of its “Smart Energy Future Strategy.” The company relies almost exclusively on coal, and the plan would diversify its generation by retiring coal plants and building the solar plant and a 700 MW natural gas plant. Vectren said the added solar would help meet the needs of corporate and industrial customers with renewable energy goals.
The state consumer advocate argued in a separate case about the gas plant that Vectren doesn’t need the new capacity because customer demand has decreased, and it makes the same complaint against the solar plant. And the solar farm doesn’t meaningfully diversify the company’s generation mix, the agency said.
The agency also complains that Vectren didn’t seek competitive bids, which would have led to much lower costs. Instead, Vectren exclusively sought a build-to-own solar project that allows for a traditional utility model for recovering “significantly higher” costs from customers, according to utility analyst John Haselden.
Vectren calculated the plant would need to earn 7 cents per kWh to break even, a confidential figure revealed in an improperly redacted testimony document filed by Alliance Coal. Haselden testified that a more competitive process could drive the costs down to 4 to 5 cents per kWh.
That lower figure would be in line with a recent deal between co-op Hoosier Energy and the 200 MW Riverstart Solar Park, Haselden said. He also cited a recent request for generation proposals from Indiana utility NIPSCO that brought an average bid of 3.6 cents per kWh for solar PPAs.
The National Renewable Energy Laboratory’s most recent report on the solar industry set a levelized cost benchmark of 4.4 to 6.1 cents per kWh for utility-scale one-axis tracking systems like the one planned by Vectren.
But Vectren wasn’t required to seek competitive bids, according to testimony from Wayne Games, the company’s vice president of power supply. And its no-bid contract with First Solar locked in favorable prices for solar modules as the U.S. International Trade Commission considered tariffs on imported solar panels. The deal also guaranteed the plant would be built within Vectren’s service territory, which will avoid costs of grid congestion, Games said.
Games also dismissed the the advocate’s references to the lower costs of PPAs as “apples-to-oranges comparisons” that ignore the benefits of utility-owned solar. He cited a consultant’s report that the project’s capital costs are “consistent with — if not lower than — market conditions for a utility-scale PV project, using union labor, in Indiana.”
The price discussed in regulatory documents — $76.2 million — is actually higher than the company’s previous public estimates, which stated the project would cost between $70 million and $75 million to build.
The figure was also revealed through a redaction error in testimony filed by Alliance, which opposes the project. Copying and pasting redacted text from the document, which was available on the IURC’s website before it was replaced Sept. 10, removed the redaction marks.
A law firm representing Alliance, a mining company that has supplied fuel from its Indiana mines to Vectren, wouldn’t confirm or deny the accuracy of the improperly redacted testimony, citing confidentiality rules.
Vectren did not return a request for comment but has since confirmed the $76.2 million cost in more recent unredacted filings.
Citizen, environmental groups support
Supporting the utility in this case is a group that has often at odds with the company. Citizens Action Coalition regularly oppose utility infrastructure investments as bad deals for ratepayers. They agree with some of the state agency’s criticisms of Vectren’s solar project, but also argue the threat of climate change outweighs those flaws..
Vectren’s project is a small, no-regrets investment for a company that currently has recently had no solar generation on the books and a large amount of coal capacity that it will need to be replaced soon, Olson said. If Indiana clean energy advocates have any hope of replacing it with anything but natural gas, he said, they have to start somewhere.
“Of course there is a better way to do it. There is a better way to finance it,” Olson said in an interview. “But at the same time, utility-scale solar is one of the cheapest resources right now, and we should be absolutely encouraging utility companies to be making these investments.”
Olson’s testimony filed with the Indiana Utility Regulatory Commission doesn’t mention ratemaking but argues the Vectren project costs less “per installed MW” than solar projects from Indiana Michigan Power and Duke Energy that regulators approved in 2016. Olson’s math on the Vectren plant was redacted in his testimony. A $76.2 million, 50 MW plant would be around 47 percent less per MW than I&M’s 15 MW project approved two years ago for $42.5 million, which Vectren later confirmed in an unredacted document.
Olson testified that this “high level, back of the envelope math” shows Vectren’s project is in line with the widely reported declines in solar costs. That doesn’t stop Vectren from structuring the project to maximize profits and shift the risk to ratepayers, as the state consumer advocate criticizes. But that’s the state of play in Indiana, where utilities have a “blank check and complete regulatory capture,” Olson said.
“We have to accept the political reality of being in Indiana and we also have to accept the regulatory reality of being in Indiana,” he said. “We can’t oppose utility-scale solar investment based on a regulatory regime and a policy structure that we wish we had.”
Jeff Brooks Gillies (@jeffgillies) is a freelance energy and environment reporter based in Indianapolis.
For more information including copies of the testimony filed see:
Conservatives for a Clean Energy Future (CCEF) was formed earlier this year as a 501(c)(4) organization to educate and advocate for policy solutions that move our nation towards its clean energy future. CCEF works collaboratively with the Conservative Energy Network and stakeholders to promote policies that secure affordable, reliable, and increasingly efficient and renewable energy. Commonsense, market-driven clean energy policies will create local jobs, spark innovation and investment, and lower electric rates for all.
As part of our outreach, we’ve worked with myriad conservative policymakers and candidates across America who are making a difference at the state and local levels. To recognize and highlight their hard work, CCEF is excited to announce its inaugural list of Conservative Clean Energy Champions!
Conservative Clean Energy Champions are state and local leaders who have shown consistent and exceptional support for conservative policy initiatives that promote renewable energy and energy efficiency. Champions have been fighters for our nation’s transition to clean energy—working on issues ranging from net metering and third-party ownership to energy efficiency, renewable siting, and more, to make clean energy technology more accessible to ratepayers.
Included with this letter is the full list of our 44 Champions. Over the coming months, CCEF will highlight the clean energy record of these Champions and educate the public about their leadership in the conservative clean energy movement. Please visit our website for additional background information on each Champion.
As an industry leader, here’s how you can help:
Help spread the word. We need to make sure that the clean energy industry is aware of the contributions of our Champions.
Consider a contribution to their campaigns.
Make a contribution to CCEF, so that we can ensure that folks in their districts are aware of their leadership on clean energy. As a 501(c)(4) organization, we can accept corporate, PAC, and individual contributions. Such contributions are not tax deductible.
On behalf of CCEF and its leadership, I want to thank you for all you do to help support the development of favorable clean energy policies in state capitols across America. We look forward to continuing to work with you—and our Champions—to continue making a difference for our clean energy future.
Sincerely,
Mark Pischea
President
JOIN INDIANADG IN CONGRATULATING THE INDIANA 2018 CONSERVATIVE CLEAN ENERGY CHAMPIONS!
Renewable energy is hot. It has incredible momentum, not only in terms of deployment and costs but in terms of public opinion and cultural cachet. To put it simply: Everyone loves renewable energy. It’s cleaner, it’s high-tech, it’s new jobs, it’s the future.
And so more and more big energy customers are demanding the full meal deal: 100 percent renewable energy.
The Sierra Club notes that so far in the US, more than 80 cities, five counties, and two states have committed to 100 percent renewables. Six cities have already hit the target.
The group RE100 tracks 144 private companies across the globe that have committed to 100 percent renewables, including Google, Ikea, Apple, Facebook, Microsoft, Coca-Cola, Nike, GM, and, uh, Lego.
The timing of all these targets (and thus their stringency) varies, everywhere from 2020 to 2050, but cumulatively, they are beginning to add up. Even if policymakers never force power utilities to produce renewable energy through mandates, if all the biggest customers demand it, utilities will be mandated to produce it in all but name.
The rapid spread and evident popularity of the 100 percent target has created an alarming situation for power utilities. Suffice to say, while there are some visionary utilities in the country, as an industry, they tend to be extremely small-c conservative.
They do not like the idea of being forced to transition entirely to renewable energy, certainly not in the next 10 to 15 years. For one thing, most of them don’t believe the technology exists to make 100 percent work reliably; they believe that even with lots of storage, variable renewables will need to be balanced out by “dispatchable” power plants like natural gas. For another thing, getting to 100 percent quickly would mean lots of “stranded assets,” i.e., shutting down profitable fossil fuel power plants.
LightRocket via Getty Images
In short, their customers are stampeding in a direction that terrifies them.
The industry’s dilemma is brought home by a recent bit of market research and polling done on behalf of the Edison Electric Institute, a trade group for utilities. It was distributed at a recent meeting of EEI board members and executives and shared with me.
The work was done by the market research firm Maslansky & Partners, which analyzed existing utility messaging, interviewed utility execs and environmentalists, ran a national opinion survey, and did a couple of three-hour sit-downs with “media informed customers” in Minneapolis and Phoenix.
The results are striking. They do a great job of laying out the public opinion landscape on renewables, showing where different groups have advantages and disadvantages.
The takeaway: Renewables are a public opinion juggernaut. Being against them is no longer an option. The industry’s best and only hope is to slow down the stampede a bit (and that’s what they plan to try).
100 percent renewables is a wildly popular goal
The core of the industry’s dilemma is captured in this slide (on the left is the industry perspective):
EEI
Utilities don’t think it is wise or feasible to go 100 percent renewables. But the public loves it.
And I mean loves it. Check out these numbers from the opinion survey:
In our polarized age, here is something we almost all agree on: Renewable energy is awesome.
Here’s the most striking slide in the presentation:
EEI
In case you don’t feel like squinting, let me draw your attention to the fact that a majority of those surveyed (51 percent) believe that 100 percent renewables is a good idea even if it raises their energy bills by 30 percent.
That is wild. As anyone who’s been in politics a while knows, Americans don’t generally like people raising their bills, much less by a third. A majority that still favors it? That is political dynamite.
Insofar as utilities were in a public relations war over renewables, they’ve lost. They face a tidal wave. So what can they do?
Explaining why 100% renewables is impossible backfires
What they can’t do is tell customers why they can’t do it. Customers do not want to hear excuses.
They tested the following message (this is an excerpt, with emphasis added): “Today, we can choose between a balanced energy mix, which provides reliable energy whenever we need it, and 100% renewable energy. But we cannot have both. We also need to consider the costs. ... The logistics, resources, and costs would be immense.”
Nope. Customers didn’t want to hear it.
“You could tell what side he was leaning toward,” said one Phoenix focus-group participant. “He offered no solutions. It was just problem, problem, problem.”
“I want to hear about how the work would get done,” said a Minneapolis participant. “I don’t want to hear him complain about how much work it will take.”
Other can’t-do arguments drew similar reactions:
EEI
Can’t-do arguments get a company branded as anti-renewables, and that means Bad Guy. After that, customers aren’t listening.
If they want people to keep listening, utilities must begin by convincing them that they are on board with renewables. Thus, the very first piece of advice on “framing the conversation” reads, “Positive, pro-renewable message first ... every time.”
An anti-renewables message, even a message that implies anti-renewables, is simply untenable.
That is worth noting. It’s something I’m not sure US climate hawks or political types have entirely internalized. There aren’t many contested political issues on which public opinion is so unequivocally on one side.
The public might be willing to let the experts work out the details
So utilities must convince customers that they support renewable energy, first thing, off the bat. (The best way to do that, of the options tested, was telling customers about investments — highlighting the rising level of investment in renewables. Money talks.)
If they can make that key connection, then they can swing the conversation around. Once customers are convinced that utilities are sincere about supporting renewables, they become more open to the message that getting to 100 percent will take some time, that it needs to be done deliberately, and that costs need to be taken into account.
“Given the cost and the complexities of it, it should be done gradually,” one Phoenix respondent said. “Not the next five years, but maybe by the end of our lifetimes,” said another.
The researchers tested the following message (excerpted): “[A balanced energy mix] helps us maintain consistent service for our customers and avoids over-reliance on a single fuel type or technology. This means we’re able to bring our customers increasingly more renewable energy without asking them to compromise on reliability or cost.”
That worked much better. “It seemed like we all have the same goal that we’re working toward,” said a respondent in Minneapolis. “In the meantime, they’ll use a balance to serve us. It’s sensible.”
In fact, in terms of reasons not to rely entirely on renewables, by far the most potent argument was that it would slow the transition to clean energy: “We can get to cleaner energy faster and more effectively if we use a range of sources and technologies.”
The state-of-the-art message for utilities, then, is this: Yes, we want to pursue renewables, but to protect consumers, we want to do it in a way that is “balanced, gradual, affordable, [and] reliable.” That means we should avoid, ahem, “short-term mandates.”
EEI
(How much this message will merely cover for efforts to block legislation and slow the transition depends on the utility.)
On renewables, “yes, but” is the only countermessage left
So where does this leave us in terms of the messaging landscape?
In the 100 percent renewables debate, there are roughly three camps, at least among the researchers, energy executives, climate advocates, and journalists who pay attention to these sorts of things.
The first, with most activists and advocates, supports 100 percent renewables as a clear, intuitive, and inspiring target, an effective way to rally public support and speed the transition.
The second camp believes that the cheaper, safer way to get to carbon-free electricity is not to rely entirely on renewables but to supplement them with “firm” zero-carbon alternatives like hydro, nuclear, geothermal, biomass, or fossil fuels with carbon capture and sequestration. (See this paper, from a group of MIT researchers, for the best articulation of that argument.) This camp supports the strategy California has taken, which is to mandate 100 percent “zero carbon” rather than “renewable” resources, to leave flexibility.
The third camp, containing many utilities and conservatives, flatly doesn’t believe 100 percent carbon-free electricity is possible anytime soon, and would just as soon not close working fossil fuel power plants before the end of their profitable lives. They would like to continue balancing the rising share of renewables with natural gas.
The first camp has won the public’s heart. Big time. Everyone, even those gritting their teeth, has to signal support for renewables if they want to be taken seriously.
There is some room for the third camp to convince the public that the transition to renewables needs to proceed carefully and “gradually.” That’s the ground advocates and utilities will be fighting on in coming years: not whether to go, but how fast. (There’s a lot of room within “not the next five years, but maybe by the end of our lifetimes.”)
And there is some room for the second camp to convince the public that the transition to clean energy is best achieved by relying on sources beyond renewableenergy, or at least by not locking ourselves into renewables prematurely. One of the survey’s findings is that under a range of questions, the public does not have a strong preference between increasing renewables and reducing carbon emissions. I doubt most people differentiate the two at all — they are vaguely good, environmental-ish things.
Similarly, I doubt the public at large will care much about the distinction between “renewable” and “clean,” which serves as a pretty good argument for the California approach. (The California approach, or at least earlier variants of it, has helped keep existing nuclear plants running in Illinois and New York.)
But these are implementation details. The decarbonization ship has sailed. Renewable energy is in the vanguard and, at least for now, it appears unstoppable. At this point, it is difficult to imagine what could turn the public against it. (Perhaps a giant wind spill?) The more relevant question is when lawmakers will catch on to renewable energy’s full political potential.
The basic message from the public, if I could pull together all the strands of the research, is this: We want clean, modern energy, and we’ll pay for it. We’re willing to let experts work out the details, but we don’t want to hear that it can’t be done. Just do it.
Utilities can’t make that sentiment go away, though they can and will try to soften it. In the meantime, in the off-chance that their messaging efforts fail, they’d better get serious about giving customers the clean energy they want.
For years one of the key catch-phrases in the energy business has been all-of-the-above. Even in coal country in southwestern Indiana that has also become the attitude for power generators. Recently the administration of Donald Trump announced a new policy toward pollution generated by power plants. That policy, which leaves the decisions mostly up to state regulators, replaced one from the Obama Administration called the Clean Power Plan that put heavy regulations on the use of coal.
The Trump policy may slow down the number of coal-fired generating stations that are closed, but it most likely will not lead to any of the old ones reopening. At least two plants have been shut down in southwestern Indiana in recent years. Duke Energy closed the Wabash River Station near West Terre Haute. "It was an aging coal plant," said Lew Middleton with Duke Energy. "That decision was based on the EPA regulations at the time. It was going to require more pollution mitigation equipment and given the age of the plant and the length of time it would take to pay off that equipment the decision was made to close the plant."
Even with a change of regulations the Wabash River Plant is gone. "We are already dismantling the station," said Middleton. "I think it would take some incredibly extraordinary circumstances for that to re-open as a coal fired station."
Another plant to close down in the area was the Frank E. Ratts Station in Petersburg. The plant that opened in 1970 ran for 45 years before being shut down in 2015. "Given the regulatory requirements and the age of the plant at the time the company decided it had run its course and closed it down," said Claire Gregory with Hoosier Energy. "It has now been demolished and is a "greenfield."
Officials with both firms say they know of no plans to add any new coal-fired plants. Instead they are looking to use many different forms of energy to produce electricity. "We know environmental regulations are going to intensify," said Gregory. "Hoosier Energy is trying to strike a balance between energy sources that produce little pollution and those that are reliable."
"Our decisions on fuels are market driven, as much as they are by regulation," added Middleton. "Natural gas, given its price, has become very attractive. It also produces much less carbon dioxide."
Duke still uses coal in its power operations in Indiana. The Gibson Generating Station is one of the major energy producers for the state. The Edwardsport Power Plant can use either coal or gas.
Meanwhile, the Merom Generating Station is the final coal-fired plant in the Hoosier Energy portfolio. "We really are embracing the all-the-above approach," said Gregory. "We are using natural gas, landfill gas, and a lot of other sources."
That includes a solar farm just off I-69 in Greene County, which is one of 10 solar generating sites for Hoosier Energy in Southern Indiana. "We are very excited because we just signed an agreement to tap into a 200 megawatt solar array in eastern Indiana that will be the largest solar plant east of the Mississippi," said Gregory.
The agreement with EDP Renewables for the Riverstart Solar Park in Randolph County will give Hoosier Energy access to a power operation that is capable of using solar power to operate 37,000 homes.
At Duke the same attitude is becoming more prevalent. "We are going through a period of change," said Middleton. "We are adding natural gas, solar, wind, hydro and moving away from coal."
That move includes a newly opened solar operation just put in place in cooperation with the Navy. The Crane Solar Farm is a 17 megawatt operation that is now fully in service.
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