Net Metering Opportunity in Arkansas

[Dardedar]

OMNI sent this along:

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Net Metering may be more important then you think
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Net metering is a low-cost, easily administered method of encouraging customer investment in renewable energy technologies. It increases the value of the electricity produced by renewable generating, and allows customers to "bank" their energy and use it a different time than it is produced. Net metering lets customers use their own generation to offset consumption over a billing period, by allowing their electric meters to turn backwards when they generate electricity in excess of the their demand. Customers can maximize the value of their own energy production. Providers may also benefit from net metering because when customers are producing electricity during peak periods, the system load factor is improved.

The Arkansas Renewable Energy Development Act of 2001 passed through committees, the House and the Senate, without a single nay vote. It's a subsidy of sorts, designed to give emerging renewable energy resources a chance to grow in Arkansas.

Unfortunately, today there are only a handful of net metering customers in the state. This is partly due to initial investment costs, the learning curve with new technologies, and most importantly, the low level of support for developing renewable energy resources in Arkansas, as compared to other states.

To develop renewable energy resources, many states are using tools such as tax credits, rebate programs, grants, clean energy funds and a host of other programs as incentives. Wouldn't you know, Arkansas's net metering rules have been deemed to be the poorest in the nation.

Arkansas's existing net metering rules don’t provide for a carryover of credit, when more energy is produced than consumed, from a utility during a given billing period: utility companies get to keep the credits. Arkansas's existing rules also limit the size of commercial and agricultural installations so as to be unattractive to those sectors.

The "net metering bill' is HB2334, and it was introduced by Rep. Lindsley Smith. It will clarify the Arkansas Renewable Energy Act of 2001, and it will more fully meet the intent of the original legislation. It will (as in 37 of the 40 states that now have net metering) provide for the carryover of excess generation from a renewable energy producer, and it will increase the size limitation for commercial and agricultural installations.

This is not just a story about windmills and solar panels, it is about chicken litter being converted to hydrogen, it is about hog waste being converted to methane, it's about rice hulls and tree tops. It is about Arkansas's energy future. HB 2334 has now moved to the Senate Insurance and Commerce Committee, where its fate may be decided as early as this Thursday. This is generally not a very alternative-energy-friendly committee. They need to know net metering is interesting to Arkansans.

Do you know someone who votes in the District of any of the Senators on this committee? The only way net metering will pass through the committee is if they hear from constituents who are willing to call or write them. Pass the word – please.

Senate Insurance and Commerce Committee:

Chair: Senator Paul Miller Business Phone : 870-368-7329

Vice Chair: Senator Percy Malone pmalone@arkleg.state.ar.us

Senator Jim Argue jargue@arkleg.state.ar.us

Senator Jack Critcher jcritcher@arkleg.state.ar.us

Senator Terry Smith tsmith@arkleg.state.ar.us

Senator Barbara Horn bhorn@arkleg.state.ar.us

Senator Bob Johnson Business Phone : 479-880-8844

Senator Paul Bookout bookoutp@arkleg.state.ar.us

[Barbara Fitzpatrick]

Good for Lindsley - I will email her a "thanks" - wish I knew some of the senators on the committee (or otherwise had influence on them). If it makes it out of committee, I'll definitely email Sue Madison to vote for it.

[Hogeye]

Yet another subsidy to distort the true costs? Yet another mandate to force firms to buy something they don't want at prices fixed by politicians?

[Dardedar]

DAR
Is money, efficiency, profits the only consideration? Some people think there might be other quality of life issues to consider. If it were cheaper to make regular leaded gasoline than unleaded, should we let the market bring back leaded gasoline? Some people think we were better off to also consider that the lead in the gas causes health and environmental problems and thus should be replaced with unleaded.

[Barbara Fitzpatrick]

Money, profits, and efficiency are used by "conservatives" to mean the same thing. They don't. If you are not considering the "cradle to grave" effects, you aren't considering "bottom line" or efficiency. For example, our current laws, subsidies, and accounting practices make commercial mega-farming look good on the books. Actual production per acre however shows small farms, using "traditional" methods get 1.7 x produce to the acre over those megafarms. The highly subsidized fossil fuel inputs versus more human labor which is always decried as cost prohibitive is what makes the difference.

Municipal utilities are delighted with net metering, as well as anything that reduces the use of electricity, because they don't have to build more plants - that's efficiency. Highly subsized utility companies fight net metering, because they are "trading" in electricity rather than generating it, and can usually buy it from a subsidized producer for less than what they'd have to pay on net metering - that's not efficiency, just profits for a select few.

[Hogeye]

Darrel, it is incorrect to compare a value, like quality of life, to efficiency. This is called a "category error." Perhaps Doug will discuss this in his critical thinking presentation. Quality of life is a value, whereas efficiency is a "measure" of how well certain means achieve values. It makes no more sense to say quality of life competes with efficiency than it does to say pieces of furniture compete with length or color.

What we can speak logically about is: how efficient various means are in achieving a better quality of life. So I would frame the recent discussion as: Whether a voluntary ("free market") system is more efficient than an authoritarian ("controlled economy") system in promoting a higher standard of living.

A free market should not be confused with a fascist (corporatist, statist capitalist) system. I think you, Barbara, and I all agree that established businesses are profoundly anti-free-market - that they tend to lobby, bribe, and generally opt for State privilege and special advantage early and often, despite giving lip-service to free market principles. Barbara gives a good example of this with mega-farming. Despite our agreement on the facts, we come to vastly different prescriptions. The basic choice is between the property rights model, and the regulatory model. I want to cure or at least ameliorate the problem by freeing society from coercive constraints and defining property more rationally; you want to increase external coercion via the State and force people to be better.

Let me add something about "quality of life:" it is a subjective, fuzzy term. One man's quality of life is another's sentence to permanent poverty. The first world environmentalist who likes the idea of solar energy has a different notion of quality of life than an African woman who labors in a smokey hut and has an expected 30-year lifespan as a result. "Dirty" coal-generated electricity would be a vast improvement in her quality of life. The yuppy with backpack thinks a new protected area would improve quality of life; the poor working guy who can't afford a home thinks otherwise.

The voluntary approach amalgamates everyone's notion of quality of life (through the price system), reaching something approximating Pareto optimality. I.e. the property model implies a collective notion of quality of life disallowing some people benefitting at the expense of others - a result is deemed better only if some benefit and no one is worse off. A major flaw in the authoritarian approach is that the rulers (political elite, the powerful) impose their notion of quality of life on others, overriding the wishes of others, making some people worse off in their individual evaluations. Of course, the ruling elites will no doubt claim to be better and wiser, and have their court intellectuals back them up, but the fact remains that they impose their will (and notion of quality of life) on others.

[Dardedar]

DAR
I asked two questions, neither of them very complex. You gave a speech, grabbed another bogus fallacy charge out of your bag, and ducked both questions completely.

Regarding your claim:

It makes no more sense to say quality of life competes with efficiency than it does to say pieces of furniture compete with length or color.

I disagree with your dis-analogy and seriously confused attempt at explaining a category mistake. Society has serious decisions to make with regard to energy generation. Energy generation in a society will necessarily (with current technologies) involve the categories of efficiency and quality of life. Both will, and must, be considered (and are every day). A balance, satisfying to society, will be struck.

It may be less expensive (and thus monetarily "efficient") for the populace to sell their garbage to a private company to burn it. But because of "quality of life" issues, this is unacceptable. It may be less expensive (and thus monetarily "efficient") for the populace to pipe their raw sewage into the lake. Because of "quality of life" issues, society finds this unacceptable.

No end of examples like these could be provided.

If you get around to answering my original two questions you may begin to understand the point. If you duck them, you probably won't.

D.

[LaWood]

>Yet another subsidy to distort the true costs? Yet another mandate to force firms to buy something they don't want at prices fixed by politicians?<

Only if they are monopoly, which they are, and it is granted by the state, hence in exchange for a monoply they get some regulation. Utility profits (15%) are 2.5x those of Walmart.

[Dardedar]

"Quality of life is a value, whereas efficiency is a "measure"

DAR
I am starting to think he doesn't see obvious the context. That is, that I am speaking of "quality of life" as directly affected by how we choose to convert energy. These are two things a society will want to take into consideration, obviously. If Mr. Hogeye hadn't avoided my two two questions, this would have been clear. Oh, could it be that that's why he avoided them? I am so naive sometimes.

Again:

"Is money, efficiency, profits the only consideration? Some people think there might be other quality of life issues to consider. If it were cheaper to make regular leaded gasoline than unleaded, should we let the market bring back leaded gasoline?"

Should I just give the correct answer?

[Hogeye]

Only if they are monopoly, which they are, and it is granted by the state...

Yes, you hit the nail on the head here. The problem is State-granted monopoly. The solution: end such monopolies. Not the solution: Pile onto the current problem with additional regulation.

Darrel, don't you see that "efficiency" can relate to any end. It can relate to making money (you see this) and it can relate to improving the quality of life (you don't seem to see this). Efficiency is not in the same category as money or quality of life.

Answering your questions (while dropping the categorically incorrect part):

Q: Is money and profits the only consideration?
A: No.

Q: If it were cheaper to make regular leaded gasoline than unleaded, should we let the market bring back leaded gasoline?
A: Yes, if property rights were adequately defined. I.e. If property in air or easements in air were recognized by legal systems, or people were compensated for health harms, or e.g. agreed to accept cash/benefits in return for waiving liability, it would be permissable to sell leaded gasoline.

So we have a choice:

1) The statist quo, involving more and more powerful government, the air as de-facto commons, virtually guaranteeing more pollution no matter how draconian the State gets in its regulation - "the regulatory model," or

2) Working toward a free society, with competing legal systems, encouraging the "homesteading" of air to bring it into a market system where money prices gauge the relative values of things - "the property rights model."

So long as the ocean is "commons," fish will be over-harvested; so long as air is "commons," the air will be over-polluted.

There are two problems that must be overcome: the legal problem of defining property in previously unowned things, and the technical problem of inventing "fencing" to delineate the new form of property. It took the invention of barb wire to delineate the Great Plains, changing open range to property. Electronic fences in the ocean are theoretically feasible, though no one is likely to do the necessary research for it so long as UN decrees outlaw private property in the ocean. Probably it is necessary to have the legal infrastructure before the technical infrastructure - otherwise incentives are lacking. For air (and water) there is also the geoist approach. Ask Barbara. (It probably matters more that property be defined than how exactly it gets defined, so as to save the resource from destruction.)

Here are a couple of sites that have information on such topics:

PERC
Thoreau Institute

or google "free market environmentalism"

[Dardedar]

Q: Is money and profits the only consideration?
A: No.

Q: If it were cheaper to make regular leaded gasoline than unleaded, should we let the market bring back leaded gasoline?
A: Yes (with "air easements")

DAR
Good. Got it. It's because money and profits are not the only consideration that reasonable people want to consider the profound effects of energy creation with so much emphasis on finite carbon. Namely because it will run out relatively soon, and GW.
Regular leaded gas has been pushed out of the market and will stay out and for similar "quality of life" reasons.

D.

[Dardedar]

DAR
Gore made some good points about net metering the other day:

Al Gore and the Wedges Game

Excerpts:

Princeton professors Robert Socolow and Stephen Pacala first introduced the concept several years ago, and it has really taken off. The basic concept is this: we have an industrial society built on a shaky foundation of fossil fuels that must be replaced. There is no one technology that can substitute directly for fossil fuels, but by combining technologies and new lifestyle choices, we can ramp down our emissions to a safe level. Each option is termed a "climate stabilization wedge" because it will help reduce greenhouse gas emissions and stabilize the climate.

Wedges include solar power, wind power, more efficient appliances, green buildings, coal-plant carbon capture and storage, public transportation, auto fuel efficiency, nuclear power and so on. Socolow and Pacala have turned their idea into an actual role-playing game that is being adapted for use in schools.

Big Snip...

"So who determines what options are most affordable and feasible? Up until now it has been the utility industry in conjunction with the oil, coal and gas producers. But today there is a revolution in the air.

When Al Gore testified in Congress on March 21, he brought up the idea of decentralized power from renewable energy, and he called for policy changes to make it happen. Here's what he said:

"We ought to have a law that allows homeowners and small-business people to put up photovoltaic generators and small windmills and any other new sources of widely distributed generation that they can come up with and allow them to sell that electricity into the grid without any artificial caps, at a rate that is determined not by a monopsony - that's the flip side of a monopoly. You can have the tyranny of a single seller; you can also have the tyranny of a single buyer, and if the utility sets the price then it'll never get off the ground. But if it's a tariff regulated according to what the market for electricity is ... then, you might never need another central station generating plant. In the same way that the Internet took off and stimulated the information revolution, we could see a revolution across this country with small-scale generation of electricity everywhere. Let people sell it! Don't reserve it for the single big seller."

[important note from earlier in the article: "EPRI used very low cost estimates for carbon-free alternatives to renewables. For example, slide presentations on the EPRI web give a levelized cost of electricity for nuclear power as under 5 cents per kWh. Back in 1996, the California Energy Commission estimated the cost of nuclear power at 11.1 to 14.5 cents per kWh."]

How much is it going to cost if the planet loses it's ice caps and we go into major melt down? Seems that allowing people to lower their electricity bill by sensible net metering should be strongly encouraged.

See at the bottom of the same link:

Al Gore's Ten Point Plan for Global Warming, presented to both houses of Congress on March 21, 2007:

here

[Hogeye]

Got it. It's because money and profits are not the only consideration that reasonable people want to consider the profound effects of energy creation with so much emphasis on finite carbon.

Yes, we agree. And since candidate solution #1 has failed miserably, and more of the same (as Gore suggests) doesn't hack it, we need to try candidate solution #2: Working toward a free society, with competing legal systems, encouraging the "homesteading" of air to bring it into a market system where money prices gauge the relative values of things - "the property rights model."