Twinkle Cavanaugh

Alabama Public Service Commission Backs Alabama Power’s Tax on the Sun

2020 has been a bad year, especially if you’re an Alabama Power customer.

The Alabama Public Service Commission (PSC), never content with how many favors it can give Alabama Power, added insult to injury today when it upheld Alabama Power’s sun tax. As many of you know, Alabama Power taxes small scale solar at one of the highest rates in the country; $5/kilowatt/month, or about 50% of the money you could expect to earn from your system. It is currently unclear if the Commission’s vote today actually INCREASED the sun tax.

In other words, the supposed supporters of small government at the PSC chose to institute an approximate 50% tax on solar for homes and small businesses in order to protect the monopoly of one the largest and most profitable companies in the state.

How the PSC Fails Alabamians

This is not the first questionable decision the PSC has made this year. Here are a few lowlights:

  1. The Commission failed to take any action to protect customers from disconnections or late fees amid COVID-19. Advocates like Energy Alabama had to force Alabama Power to protect consumers, but the PSC claimed its closed doors talks with utility executives were good enough and no action was needed.
    • By the way, Alabama Power is restarting disconnections soon, despite its parent company earning almost $5 billion in net income last year alone.
  2. The Commission ruled in favor of Alabama Power, allowing it build expensive and unneeded gas, and punted on solar and energy storage projects despite them being the most cost effective.
  3. The Commission allowed Alabama Power to overcharge customers for fuel by more than $100 million until a group of advocates, including Energy Alabama, called them out on it. Under fire, the Commission finally did the right thing and refunded customers most of the money.
  4. The Commission, in an attempt to legislate from the bench, is actively blocking the recording of hearings and the use of electronic devices.
  5. And then today, the Commission backed Alabama Power’s tax on the sun. Alabamians of all political stripes want more low-cost renewable energy but the PSC has decided it knows better than the people.

Again, this is just 2020.

The Cost of Being a Puppet

The Alabama PSC has proven itself to be not much more than a puppet for Alabama Power. For instance, the solar tax complaint was first filed back in April 2018, yet it took the PSC more than two years to decide the case. However, Alabama Power was able to file for one of its largest expansions in history and get it approved, all before the solar tax case was decided. If Alabama Power wants it done, it gets done. If the people want it done, nothing happens.

There are real world consequences to all of this deference to Alabama Power. First off, real economic harm is being done to the people of Alabama and many of our small businesses. Our utility bills are some of the highest in the nation, the proportion of income Alabamians spend on electricity is one of the highest in the nation, and we have the worst energy efficiency in the country. But rather than make any of these problems better, the Commission continues to green light expensive and unneeded construction, allow high taxes on alternatives, and ignore any efficiency. Alabama Power does not want any of these things because it would rather you remain forcibly and 100% dependent on them.

Bluntly, the decisions of the PSC are contributing to poverty in Alabama, rather than alleviating it. Alabama has a history mired in poverty and we need our energy policy to help us break that cycle. Favoring monopolies and Wall St. over low-cost distributed energy perpetuates the struggle of hundreds of thousands of hard-working Alabamians.

Photo credit: Pat Byington

And secondly, Alabama is losing out on tens of thousands of good paying jobs in advanced energy stemming directly from PSC decisions. There are tons of folks who could be employed in the energy efficiency sector, making much needed upgrades to our built environment and infrastructure. Renewable energy, such as solar and wind, are some of the fastest growing sectors of the economy in most states, but not Alabama.

Twinkle Cavanaugh, the PSC President, has often touted jobs in statements to Alabama Power-supported outlets like Yellowhammer News, in campaign materials, and even from the dias during PSC meetings. We’d encourage her to actually take her own words seriously and put Alabamians to work.

Public Service Commission Sides with Alabama Power – Time to Move Forward on Renewables, Efficiency

UPDATE: This post was updated on Friday, June 12, 2020 at 12:40 Central Time to provide more context about the Public Service Commission’s vote on Tuesday and to correct an error so that the article states the proposed solar plus storage put downward pressure on customer bills.

 

Yesterday, the Alabama Public Service Commission, led by Twinkle Cavanaugh, capitulated to demands from Alabama Power to raise your utility bill in the midst of a pandemic and unprecedented economic stress.

 

The Commission voted unanimously allowing Alabama Power to:

  • Build Barry Unit 8 (a new 726-megawatt gas plant)
  • Buy Central Alabama (an existing 915-megawatt gas plant)
  • Enter into a power purchase agreement with Hog Bayou (to buy electricity from an existing 238-megawatt gas plant)
  • Acquire 200 megawatts of undetermined Demand Side Management and Distributed Energy Resources

 

The Commission did not approve the proposed solar + storage projects (400 megawatts).

 

We will be blunt. These Commissioners do not serve Alabamians. They serve Alabama Power. They serve their campaign donors. You deserve better.

 

It is has never been enough for the greedy executives like Mark Crosswhite at Alabama Power to be one of the most profitable utilities in the country on the backs of the one the poorest states in country.

 

No. They petitioned for unneeded and expensive new generation simply because they could. Their parent company (Southern Company) is reeling from years of bad decisions in Mississippi and Georgia. Alabama Power and the Alabama Commission keep on delivering shareholder value at your expense.

 

We intervened, along with Gasp, to protect Alabamians and we were represented in this case by the Southern Environmental Law Center. Alabama Power’s own data showed that solar-plus-storage was the least cost resource and would actually put DOWNWARD pressure customer bills. Not to mention the serious and significant flaws in its planning and forecasting methods. The Commission didn’t approve the cost-effective renewables.

 

Even the Alabama Attorney General’s Office had serious concerns about the request’s impact to Alabamians and wanted Alabama Power to bear some of the risk if this request didn’t deliver for consumers. Alabama Power, of course, does not take risks. It makes you take risks. It reaps the profits from your risks. The Commission didn’t blink an eye.

 

Don’t forget that advocates filed a petition to overturn Alabama Power’s solar taxes back in April of 2018! Has the Commission acted? No. But when Alabama Power demanded something, the Commission jumped.

 

Let us be as clear as we can. We strongly disagree with this Commission’s decision to saddle Alabamians with decades of costs and practically eliminate the benefits we should be enjoying from energy efficiency and renewable energy.

 

But, Energy Alabama does not participate in these issues to waste our breath. We do not exist simply to fight utility companies.

 

We want to move this state forward. We want the jobs. We want the savings. We want the cleaner air. We want the choices for consumers. All these things are possible with energy efficiency and renewable energy.

 

This is not and has never been a partisan issue. Alabamians of all stripes want more renewable energy, not less. Polling shows strong support for renewables in Alabama among conservatives AND liberals from the Saturn V in Huntsville to the Port of Mobile.

 

If the Public Service Commission is unable or incapable of handling this issue, it is incumbent upon the legislature to act. We have seen too many neighboring southern states grow massive amounts of renewable energy jobs. In light of the economic devastation from COVID-19, we will need every last one of those jobs created in Alabama and as fast as possible.

 

If you too are ready for growth rather inaction, it is time for YOU to take action.

  1. Become an Energy Alabama member – https://alcse.org/support-energy-alabama/energy-alabama-friend/
  2. Support Energy Freedom Alabama – http://energyfreedomalabama.com/