Gainesville Regional Utilities is responsible for the power plant in the background, and the photovoltaic panels in the foreground.
The White House reached a breakthrough agreement with automakers to make vehicles with better mileage and fewer global warming emissions. Host Jeff Young talks with Dan Becker, a veteran of Washington’s clean car battles, to learn more about what the agreement means for our cars and our climate.
YOUNG: It’s Living on Earth, I’m Jeff Young
CURWOOD: And I’m Steve Curwood.
One section of the Waxman-Markey climate bill would require that utilities generate at least a portion of their power from renewable sources. One city-owned power company in Florida is already way ahead, loading up rooftops with solar panels.
Ed Regan is the assistant general manager for strategic planning at the Gainesville regional utilities and he says the renewable energy path for the sunshine state is obvious.
REGAN: What we’ve got in the South is sunlight and biomass, plenty of sunshine and a lot of growing things. And so that’s what we’re trying to harness over here in Gainesville, Florida.
CURWOOD: So, let me see. The basic idea here as I understand is this: The utility you work for collects a certain amount, about 74 cents a month extra from all of its customers and then uses that money to pay an attractive bonus to your solar customers for every kilowatt they pump into the electrical lines.
REGAN: Yeah. What’s very different about the approach that we’ve taken and that’s very common in Europe and other parts of the world is rather than saying, well, let’s only value solar electricity as the fossil fuel that it will replace. We kind of turn that equation over and say what do we have to pay to make it a good investment. So you put a solar panel on your roof, you hook it directly to the utility company, and we buy all your output and we use it to serve all of our other customers.
CURWOOD: So, let’s go through the math here. If I were buying electricity from your utility, how much do I pay per kilowatt-hour?
REGAN: If you were a residential customer about 13 cents.
CURWOOD: And if I were to supply solar from my roof what would you pay me?
REGAN: 32 cents.
CURWOOD: That’s a pretty good deal. So this apparently has changed the calculation for those big roofed businesses and homeowners I imagine.
CURWOOD: Folks will say, hey I can put in solar, get rid of my electric bill, the utility will help me pay back the hefty cost of the installation. I may even make some dough here.
REGAN: That’s right.
CURWOOD: So can you give me a typical scenario please?
REGAN: Oh a typical scenario is a grocery store or one of those big box pharmacies or an auto repair shop or a tire shop will put a fairly large array on their roof. This really works out very well if the owner of the system is a company that would be paying federal taxes because there’s a lot of tax benefits that go with it. If you’re a school or a church, you don’t get those benefits, so even with our feed-in tariff, it’s not going to be a very lucrative investment. However, you have the opportunity to lease your roof to somebody that can get those benefits and that’s going on as well.
CURWOOD: So what about the private homeowner who does pay federal taxes. Solar systems aren’t cheap – how can they afford the up front money to put something up there to capture that sunlight? What are my odds of getting a loan from the bank to put that thing up there?
REGAN: Depends on your credit rating, but I’d say it’s pretty good – at least in Gainesville because they’re starting to become used to it. There’s really two key aspects to our program. The first key aspect is we give you a price that’s gonna make it work and it’s 32 cents. The next key aspect is we give you a contract, and the contract says we’re gonna pay you 32 cents per kilowatt hour that you make for the next twenty years, and it’s backed up by the full faith and credit of Gainesville Regional Utilities. With the contract, with the interconnection agreement and your good credit rating, this is a really nice investment because the contract is – you can use it as collateral.
CURWOOD: So why do you want to do this? I mean what’s the benefit to you the power provider here?
REGAN: First of all our city commission has adopted a policy of meeting the Kyoto Protocol, which means that we need to get a substantial amount of renewable energy. The second thing is the community really is committed to doing what they think is right in terms of reducing CO2 emissions because of their contribution to greenhouse gases. And thirdly, it’s really surprising what this has done in terms of employment opportunities, enthusiasm, the whole moral of the community. I’ve had the head of the Electric Workers Union come up to me and say “Gosh, thanks. Everybody’s got a job.” Its huge amounts of investments going on and it’s just good for the community from that point of view.
CURWOOD: So Ed, tell me. Why do you think the utility you work for – this is the Gainesville Regional Utilities – sees a benefit in fostering a local solar industry enough to become really the first place in the U.S. to do this on a major scale – yet, other utilities, so far, do not.
REGAN: Well Gainesville is kind of a special place. It’s the home of the University of Florida, the Fighting Gators. We have a very environmentally aware community. We have a city commission that’s well in-tune. And we’ve been undergoing a very vibrant energy supply discussion since about 2003. We generate all of our own electricity and we have a coal plant. We own a piece of a nuclear plant. We have gas plants. And in 2004, the staff actually recommended a new coal plant, and that started a lot of discussion about climate change, global warming, various forms of renewable energy and that’s how we got to where we are now. And, you know, I’ve been in the utility business thirty years and I’ve been through a lot of rate increases and things like that and I think we’re all very surprised at how accepting our customers have been and how very, very little push back we’ve gotten in terms of – they know their bills going up a little bit, but they see the benefit of it – they like it. My experience with our community is that people really care about the environment and they want to do the right thing.
REGAN: That’s right. I think an investor owned utility would really have a hard time doing this because those regulations are all pointed in one direction, and that direction is lowest cost.
CURWOOD: Educate me for a moment, Ed. How many municipal power districts are there in the country that could start doing this if they wanted?
REGAN: Over 2000. I think they represent about fifteen percent of the United States load, electrical. And then there’s probably another ten percent that’s the co-ops that would probably have a similar option.
CURWOOD: So, in other words, a quarter of America could go down this path without regulatory change?
REGAN: Yeah, that’s about right.
CURWOOD: So what advice do you have for people who are listening who might want to get a similar offer from their power companies?
REGAN: Well, find out who does the planning and take ‘em to lunch.
CURWOOD: Ed Regan, thanks so much for speaking with us today.
REGAN: Well, it’s been a real pleasure.
CURWOOD: Ed Regan spoke to us from his office at the Gainesville Regional Utilities where he is the assistant general manager for strategic planning.
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