Corporate and environmental front groups emerge influential in Southeast solar battles

By Kristi E. Swartz, Edward Klump | 06/29/2015 08:21 AM EDT

As the battles heat up to shape rooftop solar policies in the Southeast, players have shifted away from solar installers versus regulated electric companies. Now, well-organized advocacy groups armed with gobs of money have descended on state capitals in hopes of influencing state lawmakers and utility regulators.

As the battles heat up to shape rooftop solar policies in the Southeast, players have shifted away from solar installers versus regulated electric companies.

Now, well-organized advocacy groups armed with gobs of money have descended on state capitals in hopes of influencing state lawmakers and utility regulators.

The groups typically are an alphabet soup of acronyms with pro-business or pro-consumer names. Most, but not all, are known as "social welfare" groups, politically charged nonprofits that try to influence policies and elections.


Their current target is the row of states from Louisiana to Florida. The stakes are high as each state is poised to hash out rules that either will make rooftop solar more accessible for consumers or lock out customer-generated electricity for years.

"These front groups provide another voice calling for rollbacks of clean energy policies, and their misinformation can serve as the intellectual ammo for anti-clean energy efforts," said Gabe Elsner, executive director of the Energy and Policy Institute, a Washington, D.C.-based pro-clean energy think tank and watchdog group. "We’re going to see more of it [as] pro-renewables and climate change policies are considered in the near future."

Two major utilities — New Orleans-based Entergy Corp. and Atlanta-based Southern Co. — dominate that region. Utility executives and others are watching closely; what happens in one state easily could influence its neighbors.

"To the extent that certain states get it right and certain states get it wrong, I want to make sure we understand what all of the issues are," said Southern Co. CEO Tom Fanning after the company’s recent annual shareholders meeting.

"I do believe every state is different," he said. "I want to have a comprehensive view on what’s out there but also the context of the decisions that other states make and make sure I’m well informed when I recommend policy for our own states."

Then the advocacy groups step in. Some say this is because a consumer group’s argument will be better received by the public than one coming from a large electricity company.

"The message wouldn’t resonate as loudly as a supposed free-market or pro-ratepayer group who says, ‘This is why solar is bad for ratepayers,’" Elsner said.

The Southeast can tout solar success stories after spending years fighting it off. Georgia has nearly 1 gigawatt of solar set to go on the grid by the end of next year; North Carolina has a renewable energy requirement; and South Carolina and soon Georgia will let customers finance rooftop solar panels from a private company, making them more affordable.

A ‘cluster’ in Alabama

Utilities across the region have warmed up to getting solar from large arrays because those projects are more economical and mirror centralized power plants. The attitude is different when it comes to distributed solar, which is what each state is debating in some form.

The battles have attracted ideological groups with a national focus to the region. Other organizations that have formed in one or two Southern states are beginning to spread their reach.

"Alabama seems to have a cluster of them, and they are beginning to metastasize in the Southeast," said Stephen Smith, executive director of the Southern Alliance for Clean Energy.

The Partnership for Affordable Clean Energy (PACE) has ties to Alabama, but the organization has launched campaigns in Alabama, Arizona, Florida, Louisiana and Mississippi. Executive Director Lance Brown said PACE has been closely involved in trying to shape solar policies in the Southeast, but like other groups, its goal is to influence national energy policy.

Chief among the concerns when it comes to letting customers have solar on their own roofs is grid reliability and whether non-solar users wind up subsidizing those who can afford to buy solar panels, Brown said.

"We believe there is a responsible path forward for solar that does not involve overpaying rooftop solar owners through costly net-metering practices, or creating third-party solar markets that are not held to the same high standard to regulated utilities," Brown said.

PACE’s partner organizations are a wide range of pro-business groups in Alabama and also the fossil fuel-backed Consumer Energy Alliance.

Brown says PACE is not a lobbying arm or front group for anyone. He knows the organization has been accused of being a front group for the Koch brothers, among others.

PACE was incorporated by a tax and nonprofit attorney at Balch & Bingham LLP, a prominent Birmingham-based corporate law firm that lists energy, environment, government contracts and regulated industries among its focus areas. It also is the law firm that represents two of Southern Co.’s regulated utilities: Alabama Power and Mississippi Power. Brown said the decision to hire Balch to incorporate PACE had nothing to do with the firm’s energy practice.

Alabama Power spokesman Michael Sznajderman said the utility has not donated money to PACE, which, as a 501(c)(4), does not have to disclose its donors. The utility does support organizations that partner with PACE, he said.

"Some of our positions are in line with PACE’s positions," Sznajderman said. "For example, while we support renewable energy, we do not support forcing our customers who are not interested in renewables to subsidize those who wish to install renewables on their homes or businesses."

Tracking tax returns

The bulk of PACE’s money comes from two other nonprofits, the Peoples Alliance for Leadership (PAL) and Vote Alabama. PAL has donated a total of $545,500 to PACE between 2011 and 2013, according to tax returns. Vote Alabama has given a total of $529,000 to PACE between those same years, according to tax returns.

The groups’ tax returns give an identical description: promote social and civic welfare in Alabama with programs designed to advance economic development, educational and public financial accountability, monitor issues, and engage and sponsor research in Alabama.

PAL and Vote Alabama also have donated money to JobKeeper Alliance, a Montgomery-based union-linked group, and the 60 Plus Association, known as a Koch-funded organization.

The executive directors of both groups argue they donate to organizations that represent a wide range of consumer issues. When it comes to energy, they do not want a repeat of what happened with Solyndra, a solar panel company that defaulted on a $535 million loan guaranteed by the federal government.

"The fraud and consumer deception that has materialized in the solar industry is of great concern to our organization, and that is one reason we support the efforts of any group willing to stand up for consumers in the face of such blatant profiteering," said Al Henley, the head of Vote Alabama and past president of the AFL-CIO’s Alabama chapter.

PAL Executive Director Mike Fields is a state employee at an Alabama community college, which requires him to file annual economic disclosures. A search of those documents with the state ethics commission show that Fields also received between $10,000 and $50,000 a year from Alabama Power between 2011 and 2013.

Fields told EnergyWire he does not have a consultancy and does not receive any income from any utility. He stood by his statement after EnergyWire sent him an email that contained his state financial disclosures. Sznajderman confirmed that Fields was a part-time contractor for the utility at one time.

"Mike Fields has worked for us in the past as a part-time contract lobbyist. He is not employed by Alabama Power at this time," he said.

If there’s any state in the Southeast that lags in solar, it’s Alabama. Yet, utility regulators approved a backup tariff that rooftop solar users will have to pay if they install solar panels and want to tie that excess energy output to the power grid.

Louisiana deliberations

Both PACE and the 60 Plus Association made appearances at a legislative hearing in Louisiana, which is in the middle of a potentially watershed year for the solar industry.

The state’s Legislature recently wrapped up its 2015 regular session, which saw H.B. 779 approved and signed into law by Gov. Bobby Jindal (R).

The measure retains solar tax credits for a time, but it limits how much can be spent. There’s a cap of $10 million per fiscal year for leased systems and another $10 million each year for purchased systems, with lower caps as the program’s end nears. The credits are set to stop for systems installed after 2017.

Jeff Cantin, president of the Gulf States Renewable Energy Industries Association (GSREIA), has said the legislation could threaten jobs. He previously said the goal was to help Louisiana keep realizing benefits from solar and preserve as many of the roughly 3,600 solar-attributed jobs as possible.

Both PACE and the 60 Plus Association spoke in support of a version of the solar bill that eventually became law.

Meanwhile, the Louisiana Public Service Commission (PSC) is expected to examine net-metering policies this year.

With net metering, customers can send extra power to the grid for credits to reduce bills. Net-metering users in Louisiana can receive the retail price of electricity for such power.

Louisiana regulators have discussed possibly changing rates and removing a cap on how much net metering can be put in place, as the state allows a utility with net-metering purchases that exceed 0.5 percent of its retail peak load to no longer accept such applications.

Casey DeMoss, CEO of the New Orleans-based Alliance for Affordable Energy, said she wasn’t sure how engaged outside groups might be at the Louisiana PSC but said "they’ll definitely be very obvious if they are" at the commission.

"The same people go to those meetings," she said, adding that attendees include her group and attorneys for utilities. "If any other kind of pretend consumer advocate shows up, it will … stick out like a sore thumb."

For now, DeMoss said the focus is turning back to net metering. She said there’s no reason to have a cap now that the credits come with a cap. But she said changing the formula for net metering would make it net billing.

Sunshine State

The two other states preparing for a battle over rooftop solar policies are Florida and Mississippi, where regulators are preparing to update the state’s net-metering policy. Utilities and other participants must file comments with the Mississippi PSC by Wednesday, and a hearing is expected for later this summer.

PACE and 60 Plus Association are among the long list of interveners. PACE has worked in Mississippi before, advocating with the JobKeeper Alliance for Mississippi Power’s coal-gasification project in Kemper County.

In Florida, rebuttal briefs are due tomorrow at the Supreme Court for a ballot initiative that would open up the state’s market to rooftop solar. A hearing is scheduled for September.

Floridians for Solar Choice, an umbrella group of like-minded conservatives and clean energy advocates, secured the number of signatures required to take the measure to the state’s highest court. The group includes the Southern Alliance for Clean Energy (SACE) and Conservatives for Energy Freedom, a 501(c)(4) started by Georgia tea party activist Debbie Dooley. SACE has a separate political arm — the SACE Action Fund — that contributed $371,855 to back Floridians for Solar Choice, according to Florida’s elections division.

Smith, SACE’s executive director, said his group used the money from its political unit to kick-start the ballot initiative. He is confident that over time the amount SACE’s Action Fund will contribute will be less as donations from others increase.

"We are a major player in Floridians for Solar Choice," he said. "But we’re not going to be able to carry this thing across the finish line."

In response to the ballot initiative, PACE and Koch brothers-funded Americans for Prosperity started their own campaigns against the solar initiative, arguing that consumers would pay higher rates from what would be a government mandate.

Dooley, who pushes for a free market and the right for consumers to choose where they get their electricity, has gone head to head with Americans for Prosperity before. The two clashed in Georgia when Dooley’s Green Tea Coalition supported a controversial PSC solar initiative that would have Georgia Power add 525 megawatts of solar to its output.

Dooley has since taken her efforts to several other states, including Louisiana, where she grew up.

"It’s been a little bit vicious, but, hey, I’m winning. I’m going to get under your skin," she said.

Peoples Alliance for Leadership 990s:

Vote Alabama 990s:

Mike Fields’ statement of economic interest:

Click here for Floridians for Solar Choice’s campaign contributions.