The state’s chief utility regulator crafted a compromise that will save many solar installation companies from imminent bankruptcy. But the price he asked was to support his re-election and abandon any backing of his opponent.
Described as either as “borderline illegal” or basic hardball politics, depending on the speaker, the proposal by Louisiana Public Service Commission Chairman Eric Skrmetta, which will be debated Wednesday, is something that even his election opponent Forest Bradley-Wright could support.
Bradley-Wright, a New Orleans consumer advocate, is backed by some of the companies seeking to ease the regulations that are crimping the sale of solar panels that make electricity for their owners. In particular, the solar industry wants to lift the restriction that gives traditional utilities license to suspend full credit for the incentives for new customers once a certain number of solar arrays was sold.
Skrmetta’s proposal eliminates the cap, but he also demanded they join his campaign efforts, according to an account of the meeting a Baton Rouge lobbyist emailed Saturday to members of the Gulf States Renewable Energy Industries Association, a New Orleans-based trade association.
“Though he understands that the solar industry cannot dictate to Forest that he run or not, he expects the solar industry to privately and publicly support his re-election. This means not supporting Forest’s candidacy!” wrote Andrew B. Ezell, a Baton Rouge lawyer representing the trade group. “I strongly recommend that the GSREIA board take heed of this caveat!”
“My concerns about an opponent are irrelevant,” Skrmetta said Monday when asked to respond to that sentence of the email. “Would I prefer not having an opponent? Well, of course. … I don’t need anything from anybody on that element. It’s more about three weeks ago when the first company came to me and told me that if they didn’t get this cap lifted, they probably would go into bankruptcy.”
He said he has worked on a compromise for the past several years.
“The cap is the No. 1 thing that restricts the expansion of solar energy,” Bradley-Wright said Monday. “The cap needs to be lifted. I only wish responsible policy didn’t have to come to the table as a poker chip.”
Bradley-Wright said he had been urged to run by many people, including executives with solar companies. But he hadn’t decided until hearing of the email from supporters. He said he definitely would run.
“I don’t know if you can make that kind of ultimatum stick,” said PSC Commissioner Clyde Holloway, of Forest Hill.
Holloway argues that the solar incentives allow a couple thousand wealthy customers who can afford the upfront expense to have systems subsidized by the couple million electricity buyers who can’t. He said he supports Skrmetta’s proposal because it addresses, at least for the time being, the key financial issues for the utility companies and the business operations issues for the solar sellers.
“It settles an issue that needs to be settled,” he said.
But it won’t be settled with the help of PSC Commissioner Foster Campbell, of Bossier Parish. He opposes the deal and says Skrmetta’s actions skirt so close to the edge of the law that they could be “borderline illegal.”
“You can’t promise a vote for support. These people have been against him and now he’s trying to do something for them in return for their support. That’s going way too far,” Campbell said. “It’s not the first time he’s tried to bully people.”
Campbell and Skrmetta have had a number of loud and angry public arguments over the years.
Electricity must be used immediately. Because solar only produces during sunshine hours — Entergy Corp. says its research indicates primarily between 10 a.m. and 3 p.m., when most people are at work — the individual systems add power to the utility’s grid of electricity. At night, they draw power from the grid. Owners of solar panels are “paid” for the power moved onto the grid during the day and those credits reduce the amount they have to pay for the electricity used at night. The system is called “net metering.”
In addition to eliminating the cap, Skrmetta’s proposal would allow a solar customer to offset his bill from the utility company for all the electricity used in a given month. Anything above that amount would sell back to the utility company at a cheaper wholesale amount.
Lobbyist Ezell, who would not comment on his email, said the proposal removes the uncertainty for solar operators and allows them to transition more easily into a world without the tax incentives, which begins in 2015.
“I’m not trying to tee something up for an argument as much as I am trying to listen to the troubles that the companies are having,” Skrmetta said. “We’ll still have a discussion on it. If there is support for it, then the PSC will vote for it. If there is no support for it, they will not approve it.”