Opening NC solar power market requires a balanced plan

What’s next? Republicans in North Carolina’s General Assembly gathered outside their Jones Street headquarters looking for some trees to hug?

Four GOP House members are sponsoring a bill that would allow independent companies to compete for utility customers with the bigs, Duke Energy Carolinas and Duke Energy Progress. Solar energy, a rapidly developing industry, is helping to generate such a conversation.

The bill would allow financing of such energy sales through third-party leasing, wherein an independent energy developer leases a private rooftop, installs solar panels and then sells the power produced directly to the customer. House members have been getting a push from big corporations such as Lowe’s, Wal-Mart, Target and Macy’s to allow it.

One sponsor, GOP Rep. John Szoka of Fayetteville, puts a free-market spin on the idea, given that Republicans generally shy away from anything having to do with renewable energy.

“I believe in free markets,” Szoka says, “and I believe in property rights. This allows property owners to use their property as they see fit.”

Reasonable worries

Now, don’t anybody fall over in a faint here, but believe it or not, Duke isn’t crazy about this idea. The company is in the solar business itself, of course, as development of solar energy has become cheaper and deployment of it has grown in popularity.

And while Duke, a regulated utility, isn’t about to come out and appear anti-solar, it does have some perfectly reasonable concerns. The company might wonder, for example, whether while Szoka is doing all that believing – in free markets, in property rights – he also believes in getting his power back on should an ice storm turn the lights out and the heat off.

Duke is required, in exchange for being a monopoly, to provide power for all in its service area. Another requirement is that it service customers by keeping their power on and getting it back on if it goes out.

So the company is within reason to worry about competition in the free market from independent companies with no such obligations, even if they are providing more environmentally friendly energy.

Finding the path

That’s why some hesitation is expressed by, for one, James McLawhorn, head of the Electric Division of the Public Staff, the agency that represents consumers in matters pertaining to utility rates.

McLawhorn says if independent companies come in without the same regulations Duke has to deal with, it would amount to “cream skimming ... someone coming in to pluck off the most profitable customers. Utilities have built the systems to serve all those customers, and all of a sudden someone takes customers away.”

As much as it may hurt an average consumer to support “the power company,” the fact is that Duke has a reason to raise some questions about free-market power.

Could a system exist that would allow some new entrants into the market while keeping the Duke system? It’s possible, but Szoka and his mates in the House are a ways from having devised a plan under which that’s a workable idea. (It might require an effort more like divining a plan.)

If customers want the convenience and dependability of a power company legally obligated to get the lights on and the job done, they need a sound plan for any change to such a system.

Lawmakers need to bring a change as monumental as this to the table with all the blueprints drawn and all the lines connected, so to speak.

Because this might be a long, hot summer.