State Rep. Fred Costello is having his Ormond Beach home fitted with solar panels. He has invested in a company that is seeking a patent on new energy generation technology. He considers himself an energy wonk.
So when the former mayor filed a bill last week to open the state’s energy market to solar energy competition — by allowing homeowners and businesses to lease their rooftops to companies that generate solar power and sell it back to the grid — it seemed like the logical thing for a free-market Republican to pursue.
“I believe in innovation and competition because that’s how we get better,” said Costello, a dentist by trade. The current system imposes hurdles to competition and hurdles to innovation, he said. “That’s not what the free market is all about.”
But Costello’s idea is disruptive, and uncharacteristic for Republicans in recent years.
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If it succeeds, it would create a crack in the powerful utility monopoly in Florida that allows only regulated power companies to distribute energy to others. For the first time, it would allow homeowners and businesses that generate 2 megawatts of power to generate and sell energy to their neighbors, and sell any excess energy produced back to the grid.
With fewer new demands on electric companies, the state’s utility giants would have less need to build expensive nuclear power plants or natural gas fired generators. “And that would be a good thing,’’ Costello said.
But the bill, HB 687, also would put into law much of what a proposed constitutional amendment being pushed by Floridians for Solar Choice would do. The coalition of renewable energy advocates, tea party and environmental groups pursued the solar choice amendment after years of trying and failing to get legislators to support opening the solar market to competition.
“It has many of the elements of the Floridians for Solar Choice — it is meant to open the market, overcome barriers to competition and prevent discriminatory actions by the utilities,” said Stephen Smith, director of Tennessee-based Southern Alliance for Clean Energy.
Unlike Costello’s bill, which would open the market to all forms of renewable energy, the amendment focuses on opening the market to solar. Both would allow companies to install solar panels on homes and businesses and sell up to 2 megawatts of energy to neighboring properties without being treated as a utility by state and local regulators.
The state’s largest electric companies are opposed to the Solar Choice plan and have financed a rival amendment that would maintain the status quo. They aren’t ready to say what they think about Costello’s bill.
“We are still reviewing the bill that was recently filed by Rep. Costello,” said Sarah Gatewood, spokeswoman for Florida Power & Light, the state’s largest electric utility.
Duke Power of Florida, the second largest utility, did not respond to requests for comment.
FPL has contributed more than $420,000, twice as much as other utilities, to Consumers for Smart Solar, the initiative that has created confusion for many supporters of solar energy in Florida.
Both Costello’s bill and the Solar Choice amendment prohibit state and local regulators from charging solar energy customers more for net metering, the process that allows residential and commercial customers who generate their own electricity from solar power to feed electricity they don’t use back to the grid.
But unlike the amendment, Costello’s bill also allows for utility companies to charge solar power users for the cost of maintaining the grid — as long as the charge is imposed on everyone else.
Specifically, the bill states that utilities may not charge customers “a new or additional charge or fee that is designed to recover costs associated with providing access to or maintaining the utility’s electric grid unless the charge or fee is also imposed on all other customers of the same class who do not use net metering.”
“The utility can’t say they [solar customers] are screwing the system, and people who are buying solar can’t say they are being charged more for something than others,” Costello explained.
Smith, of the Southern Alliance, said that provision is acceptable to his organization because it is “effectively what we’ve said all along.”
“As long as you treat all customers equally, and you don’t single out solar or somebody who has wind, if the utilities feel they want to add some sort of an additional charge — and they can legitimately justify that charge — they have the right to do that,’’ he said.
Costello said he is close to getting a Senate Republican to co-sponsor the bill and has persuaded Rep. Michelle Rehwinkel-Vasilinda, a Democrat from Tallahassee, to be a co-sponsor.
“Our renewable energy market has lagged behind other states, and this would really move the state forward,” she said. But she expects utility industry opposition.
“The utility companies are not fond of renewable energy because they have not found a way to make a profit off it,” she said. “They make a profit from building new power plants so they’re not going to be for distributed renewable energy.”
But Rep. Dwight Dudley, D-St. Petersburg, a utility critic, is skeptical. He said he supports the focus of the bill but the provision that allows state regulators, particularly the Florida Public Service Commission, to determine what are the fair costs to accessing the grid is “a woefully deficient idea.”
“They have proven to be the handmaidens of the industry — not to give handmaidens a bad name,” he said. “There needs to be a more fair arbiter.”
The chairman of the House Regulatory Affairs Committee, Rep. Jose Felix Diaz, R-Miami, said he hadn’t seen Costello’s bill, which will be heard by his committee, but he supports the idea of opening the solar market to competition as long as solar customers pay the cost of using the grid that has been developed and maintained by traditional electric customers.
“I think there’s a way to have smart distributed generation,” Diaz said. “It think it will be part of the future.”
Mary Ellen Klas: @MaryEllenKlas, firstname.lastname@example.org