Duke Energy Florida’s Clean Energy Connections program (CEC) is being challenged at the state Supreme Court by a group that claims the program will shift costs and financial risks to Duke customers who likely will not take part.
The group challenging Duke is represented by the League of United Latin American Citizens of Florida. They argue that because the solar projects are being funded by customers’ bills, an opt-in requirement as well as not expanding project benefits to all customers is discriminatory.
The Public Service Commission voted 4-1 to approve the CEC program on January 5. The program was supported by Duke, Vote Solar, the Southern Alliance for Clean Energy, and Walmart Inc.
Under the program, Duke Energy Florida will build 10 74.9 MW solar plants, with two coming online in January 2022, four in January 2023, and four in January 2024. The costs of each plant would range from $102 million to $113 million. Customer subscriptions to the energy generated would be available in 1 kW blocks.
The program set a monthly fee for each block at $8.35, and the bill credit that customers receive will be 4 cents-per-kWh for the first 36 months, escalating by 1.5% annually after that. Duke said it expects that by the program’s fifth year the annual bill credit will exceed the subscription fee. By year seven, customer credits are expected to exceed the charges paid to-date for the program.
Duke designed the plan so that 65% of the program is allocated to commercial and industrial customers, 25% is allocated to residential and small businesses, and 10% for local governments.
The group that brought the lawsuit alleges that these allotments are unfair, arguing that they disproportionately benefit Walmart, a signatory to the program, and other large customers that would help pay upfront costs and then receive future credits. The consumer group argues that customers that can afford to help with upfront costs will have the most opportunity to subscribe. Meanwhile, residential customers will feel a larger financial burden and have more limited subscription opportunities.
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If rooftop solar in Florida is 0.5% to 1%, it represents 0.5% or 1% of a $150 average monthly bill to non-solar customers, why all the fuss? That’s 75-Cents to $1.50 per month or a Starbuck’s Latte Venti or two per year. Only a big number when multiplied by 9-million non-solar customers, like “victims” in a Class Action Suit who may get pennies on the dollar AFTER legal eagles and politician’s campaign funds get their cut.
Few fully understand net-metering. Rooftop solar customers actually generate almost all of their kWh, electricity, but still require fossile fuel energy at night or during cloudy or dark stormy days. How’s that?
Rooftop solar is sized to produce ~2X annualized average daytime kWh usage. Excess solar kWh INSTANTLY flows to their nearest neighbors by path of least resistance who pay the utility company at full retail rates including fuel charges, utility fees and taxes. Which offsets the utility’s FULL COST of a like amount of kWh provided as needed to net-metered solar customers. Hence the gripes by non-solar customers who correctly believe they’re paying a portion of solar customers’ electric bills.
Botttom Line: Everyone benefits environmentally by the TOTAL kWh of rooftop solar produced.
But…REALITY IS…after 17 years of paltry growth and now with FETCs going away after 2023, Florida’s rooftop solar at 0.5% to 1% of total GWatts of capacity, is just a flash in the pan.
Utility scale solar farms up to 30X total rooftop capacity are needed ASAP to make a significant reduction in fossile fuel kWh benefitting ALL Floridians environmentally AND economically with lower rates.
Duke’s CEC Program is a heavily overcast solar deal at best. FLXs Supreme Court just clouded it over a bit more.
Example: Subscribers would pay $41.35/month for *FIVE 1-kW power blocks* but only get up to $40.00 in monthly credits at 4-cents/kWh until year four when it increases at 1.5%/yr to $40.60 and $58.91/month by year 30 for a maximum net credit $17.56/month at a maximum of 1,000 kWh usage.
Averared over 30 years, CEC yields a pitiful net savings of $7.50/month or $90.00/yr, starting with a whopping 60-cents/month NET savings in year four for up to 1,000kWh/month.
That’s $7.20/yr savings or two Starbuck’s Caffe Latte Grandes.
*Foregoing was based on what Duke’s CEC calculator suggests for an average $150.00 monthly bill’s usage, or 1,000kWh/month.
Duke should consider issuing “kWh ENERGY CREDITS” instead of $$$ at $0.04/kWh at year one to $0.0589 per kWh at year thirty. kWh credits would be NEM-like savings including fuel pass-through charge, ASC and 18% Utility Fees and Taxes where I live in St Petersburg.
Duke’s current total rate with taxes is about 15.5-cents/kWh, all of which my net-metered PV rooftop eliminates for each kWh-Delivered per kWh-Received.
Subscriber’s average NET savings after the $41.75 subscription fee is a measly 1.71-cents/kWh at year 30, or 0.85-cents/kWh averaged over the life of the program. And rate increases will wipe it out in a few years.
A 2X better option would be to invest the 5kW power block subscription fee of $40.35/month or $501/year in ~5 shares of Duke stock (DUK) at $108/share paying quarterly dividends with a yearly return of 3.66% from day one.
Plus, DUK shares become accumulated assets at $501/yr instead of paying Duke monthly debited subscription fees.
After 30 years of investing subscriber fees, a customer would own $15,030 in Duke stock paying ~$550/year in dividends or $46/month in REAL electric bill savings.
That might transform some of their customers into lovers of public owned utility monopolies.
Duke might issue subscribers shares of “DUK” instead while avoiding broker commissions and fees for odd lots and fractional shares and managing shares and dividends in customer’s bills.
Call them “Duke Solar Shares”, ’cause there’s also “nothing to install.”
Customers could use their dividends to lower city utility bills for water, sewer and trash. Rooftop solar can’t do that! 😜
Not quite as good a return as investing in a 5kW NEM PV rooftop system, but customers could buy additional DUK shares to offset as much of their electric bill as they desired. And there’s no payback break-even to deal with. What you own earns dividends from day one at rates 4X to 40X higher than money market or interest bearing checking accounts.
And if you simply want a larger return, purchase U.S. Gov’t Series-I savings bonds paying 9.6%. But like rooftop solar, you’ll have to wait for earnings to compound and accumulate for 5 years to cash them in without a 3 months interest penalty, or 30 years to full maturity. $10,000 is the limit each person can buy, plus up to an additional $5,000 if you’re due an income tax refund.
$olar doesn’t $olve everything, but CEC doesn’t even come close. Just saying…😜