Equity and unintended consequences

Coop CurrentsCoop News

It’s the poor feeding the rich.

Mack Gardner-Morse

Today, WEC Treasurer Don Douglas said, net metering is “shifting the cost of running the Co-op from everybody to just the people who don’t have solar or some other form of net metering.” It’s a fundamental issue of fairness raised by regulators, WEC leaders, members, and others. When the PUC requested comments regarding net metering in 2019, vtdigger.org reported that WEC “estimated that net metering cost non-participants $798,508 in 2019.” Co-op leaders today agree the number is closer to a million dollars cost-shifted this year, and that trend will continue.

At WEC’s listening group in 2017, member Mack Gardner-Morse of Calais spoke with Co-op Currents about his concerns regarding net metering. “For the people who can’t afford it, it’s going to increase their rates, and it’s the poor feeding the rich.” Not everyone can afford the capital costs of a solar installation, he said. “If you can afford it, it makes sense. There are all these policies and people who don’t realize the unintended secondary consequences,” he explained, in an interview that was not published at the time.

When the Department of Public Service (DPS) made its recommendation to the PUC to lower net-metering compensation in the Commission’s 2022 update, vtdigger.org reported that equity was a primary concern. The article pointed to a UVM study showing Vermonters of color were seven times less likely to report owning solar panels than white Vermonters, and that renters were three times less likely to report owning solar panels than homeowners.

“On the other hand, a lower net metering rate may hurt low- and middle-income Vermonters who want to install solar panels and gain the energy independence that comes along with those systems,” wrote vtdigger.org reporter Emma Cotton.

WEC leaders contest the notion of energy independence, since net meterered solar is, by design, not off-grid. “If you’re net metering, you’re not energy independent. Unless you have a big battery, you still rely on the grid to transmit and deliver your energy,” said Douglas.

But there’s a feedback loop, said General Manager Louis Porter, when those watching their electric costs rise see solar net metering as a way to control their bills. “As more members invest personally in net metering and divest from the cooperative model, in which we invest in green energy on behalf of all of us, only those who can’t afford to or are unable to buy solar are left to pay higher and higher prices for the product that keeps the infrastructure in place for everyone,” he said. “In our territory, with our cooperative model, compliance with the current tariff leads to circumstances that are energy-redundant, waste resources, and are anti-cooperative and unfair.”

Interestingly, in the UVM study, collective ownership emerged as a possible way to provide greater equity. The authors of the study wrote, “While public ownership would give “no guarantees” of justice, these institutions could provide all rate-paying households—as partial owners—with official stake in energy decision-making. Public ownership could also remove the profit motive from electricity provision, creating opportunities to provide electricity cheaply (or freely) to each household, or greater incentives for the utilities to invest in electric or thermal efficiency” [citations removed]. 

But while public power exists in Vermont, community-owned utilities like WEC must still comply with the rules and norms of the greater system. Vermont leadership has, laudably, acted to spur urgent climate action with well-intentioned ideas driven by economic incentives. The unintended consequences of these decisions are what the Co-op is grappling with now.