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An Energy Injustice: Low Income Households Will Subsidize Wealthy Ones Under New Handouts for Community Solar

Environmental and left-wing groups like to talk about their dedication to energy and environmental justice, but it’s hard to take their lip service seriously when the energy policies they advocate will make it harder for low-income households to pay their electricity bills. The destructive consequences of these policies are more often felt by the elderly and minority groups.

For example, after much urging from solar groups, a new handout for community solar was unanimously approved by the members of the Governor-Dayton appointed Public Utilities Commission. This handout will allow Xcel Energy to increase the cost of electricity for households that do not subscribe to its community solar garden program in order to subsidize the households that do.

According to an article in the Star Tribune:

The state attorney general’s office, which represents ratepayers at the PUC, had opposed a residential incentive at this time, precisely because it would add costs, which are ultimately borne by Xcel Energy customers who aren’t part of the solar garden program…

Subscribers to community solar gardens often pay rates that are less than or the same as those paid by Xcel Energy’s customers in general. But the community solar gardens are a relatively expensive source of power, so part of their costs are relayed to all Xcel ratepayers through the fuel clause on their monthly bills.

“What is often missed is that the shortfall gets picked up by everyone else,” Ryan Barlow, an assistant attorney general for Minnesota, told the PUC.

The total solar garden costs borne by Xcel customers through the fuel clause was $40.5 million from July 2017 through June 2018, according to data the company presented Thursday. Those costs comprise about 1 percent of an individual customer’s bill, Xcel officials said.

In 2019, with a few hundred more megawatts of solar garden power coming online, the cost to all Xcel ratepayers will be up to $170 million, company executives told the PUC. That would equate to 4 to 5 percent of the average residential customer’s bill, the executives said after the meeting.

Transferring the cost of this program is incredibly unethical for two reasons: 1) It forces lower income households to pay more in order to reduce the costs for wealthier ones, and 2) It hides the true (and enormous) cost of the community solar boondoggle that has been sold to Minnesota ratepayers.

If consumers want to buy community solar, fine, but they should have to pay the full cost of the solar. Their additional cost should not be borne by everyone else. Solar advocates know people would be unwilling to pay more for solar electricity, so they continue to use the government to distort the market. By subsidizing solar, thus allowing people to save money by utilizing the subsidy, it gives people the false impression that solar is actually cheaper than other forms of energy, which it is not.

Environmental groups may pay lip service to low-income communities, but these communities are being hoodwinked by the environmentalists who advocate for expensive programs that make it harder for low-income families to pay their electric bills. The community solar project must be funded at any cost, it seems.

True environmental justice would be advocating for the lowest-cost resource plan, thus delivering lower electric bills for all Minnesotans. Our side needs to do a better job of reaching out to groups that are targeted by renewable energy rent seekers who are touting concepts like “environmental justice.”

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