Some Republicans in the state House of Representatives are pushing anti-solar legislation by playing one of Kentucky’s favorite political blame games: You’re Subsidized, But I’m Not.
House Bill 227, which passed the Natural Resources and Energy Committee on Thursday and now heads to the floor for amendments and a vote, is utility-backed legislation that would cut by 70 percent the credit utilities pay homeowners for excess electricity they add to the grid.
If this bill becomes law, fewer people will add solar panels to their homes because it would take much longer for their investment to pay off. The result will be stronger utility monopolies and fewer jobs at growing solar installation companies.
Several committee members, both for and against the bill, observed correctly that what is needed is a well-researched compromise that sets a credit price that is fair to both solar homeowners and utilities.
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So far, though, the utilities have rejected suggestions to let the Public Service Commission study and recommend such a compromise. Instead, they want to use their muscle in the General Assembly to get their way.
That includes pushing a narrative that Kentucky’s solar “net-metering” law is about subsidies: Poor and middle-class people who can’t afford solar panels are subsidizing rich homeowners who can; the rest of the state is subsidizing Louisville and Lexington, where many solar homes are located; and even that solar power should not be subsidized at all because it hurts the coal industry.
When this bill was heard in committee Jan. 31, Tom Fitzgerald of the Kentucky Resources Council shot down the class warfare argument. He has been representing the interests of low-income Kentuckians in utility cases for four decades.
“If there were any evidence of a material subsidy, an unfair subsidy,” he said, “I would not be here to tell you that House bill 227 is all about stifling competition and is not about assuring fairness.”
Rural vs. urban bickering is a staple of the General Assembly. On a variety of issues, city and country legislators like to claim their districts are propping up the state while the other guys’ districts are being subsidized.
But it is the height of hypocrisy for pro-coal legislators to complain about solar subsidies. For more than a century, no industry has been subsidized more in Kentucky than coal, thanks to them and their predecessors.
This state has spent a fortune on roads that got pulverized by overweight coal trucks. Un-mined minerals weren’t taxed until 1988, and many have argued since that the tax is too low. Kentucky didn’t have a coal severance tax until 1972 and it remains among the lowest of major coal-producing states. Coal has been subsidized in countless other ways, too, including damage to Eastern Kentucky’s environment and public health.
A 2009 study by the Mountain Association for Community Economic Development found that coal’s benefits were more than offset by its costs, making it a net loser for the state budget. At that time, the study found, Kentucky got $527.7 million in annual revenue from coal, including taxes from the industry, direct jobs and indirect jobs. But state expenditures and tax breaks to support the coal industry totaled $642.5 million, for a net loss of nearly $114.8 million.
Since then, the coal industry has been decimated, mainly by cheap natural gas but also by environmental concerns and new technology that promises to make renewable energy the fuel of the future. Mineable coal reserves in Eastern Kentucky are dwindling and viable “clean coal” technology remains a pipe dream.
If legislators want to complain about solar subsidies, maybe they need to take a fresh look at coal subsidies. Commission an independent economist to add up all the costs and benefits to the state budget of coal, gas, oil, solar and other energy technologies and compare them. If we’re going to subsidize anything, maybe it should be the future and not the past.
Otherwise, legislators should quit talking about subsidies and see House Bill 227 for what it really is: A power grab by utility monopolies that control virtually all of the electricity in Kentucky and want to keep things that way.