A Monopoly of Power
With the solar industry in Missouri booming, creating more than 5,000 local jobs and helping thousands of
homeowners, businesses, schools, and government buildings go solar, why would the solar industry be attacked by
the electric utilities? Why would locking in your own electric rate be harmful to anyone else? Why would saving
taxpayer money by schools going solar ever be attacked or told it’s a bad thing? Is this not a free country we live in
with free markets to choose from?
There has been a lot of noise lately coming from Missouri’s electric utilities regarding solar power, most of it
negative. So far, solar doesn’t even account for one half of one percent of the total energy generated in Missouri,
yet electric utilities – especially rural cooperatives – regularly rail against their customers owning solar.
It doesn’t seem to make sense. However, when you stop to consider the issue, the reason for utility opposition
becomes very clear—competition.
Missouri’s electric utilities hold a monopoly on the generation and sale of electricity. Now, with the dramatic drop
in the cost of solar over the past five years, thanks in part to a 30 percent federal tax credit that has just recently
been extended 5 more years, solar has become an affordable option for many middle-class families.
This means for the first time, home and business owners are able to buy the equipment to generate their own
power and sell the excess back to their utility. The end result is that customers save a lot of money. Some can
practically eliminate their electric bill.
For investor owned utilities such as Empire, Kansas City Power & Light and Ameren, the threat is obvious—reduced
profits due to competition. However, it’s odd that Missouri’s non-profit electric cooperatives would complain,
since they aren’t supposed to be profit-driven businesses.
In a recent article from their Rural Missouri tabloid magazine, the Association of Missouri Electric Cooperative’s
president, Barry Hart, pontificated about how their member-owners should be in favor of “affordable and reliable
electricity, not subsidies.”
Considering how co-ops got started, Hart’s line is particularly hypocritical.
It was federal subsidies, specifically the Rural Electrification Act of 1936 that made their monopoly possible.
Without that generous subsidy, they would not exist. Moreover, most co-ops continue to receive federal subsidies
in the form of low interest government loans over 70 years after their establishment. Now, they are criticizing such
assistance for the solar industry, and it is clear that their criticism is based in fear of free-market competition.
Whether it’s an investor-owned utility, a rural electric cooperative, or a municipal utility, they all have the same
agenda: keeping a tight rein on their monopoly of power. They want you buying power from them only, paying the
rates they dictate. Now that solar is actually an affordable option for many, utilities are crying foul by stating that
it is only for the wealthy and that the rest of their customers are “subsidizing” those few who can afford it.
What they’re not telling you is that every electric customer connected to the grid has a fixed monthly customer
charge on their bill that covers the cost of the utility doing business. This even applies to those with solar. So, even
though their solar customers aren’t buying electricity, they are still paying the standard customer fee to remain
connected to the grid, just like everyone else.
The irony is that solar actually benefits all electric utility customers. By providing a cheap source of power
generation, any investment in a new power plant, which costs $500 million to over $1 billion to construct, is
prolonged. Big investments like these are how utilities make their profits, and they’re also a huge driver of electric
rates. Therefore since utilities are losing out on a future profit opportunity because people are investing their own
money in energy generation, solar is attacked.
Many electric utilities have invested in wind energy and some even in big solar farms. While this is definitely a step
in the right direction, it is by no means a major source of their power generation. It’s also another way that they
control what you pay for power because all their renewable energy is marked up to try and convince ratepayers
that it’s too expensive.
The time has come for this monopoly of power to end. The time has come for ratepayers to have a choice about
where and how they get their power. Even if you don’t have plans to install a solar system on your home or
business, one can at least be in favor of free market competition and customer choice.
Rest assured, the utilities will reach into their deep pockets and attempt to buy all the political influence they can
in Jefferson City to ensure that solar never sees the light of day. They will attempt to preserve their monopoly and
eliminate customer choice. Don’t let them do it. Tell your legislators and your co-op board that you’re in favor of
customer choice, not monopoly domination.
In 2016 you will see solar reach even greater heights, with or without the cooperation of the utilities. Our industry
will keep creating local clean energy jobs and we will be looking to bring in over a half a billion dollars in private
investments to the state by the end of this year.
Thank you,
Caleb Arthur
MOSEIA President
[email protected]
417-260-5090