Thursday, 16 July 2015

Koch Brothers, Socialists

The Koch Brothers and their putatively conservative friends, like Americans for Prosperity, have reached new heights of Orwellian messaging. Charles Koch has complained in the past that politics "tends to be a nasty, corrupting business," preferring instead to "advancing libertarian ideas." Above such nastiness himself, Charles opines that "[c]ompanies should earn profits by creating value for customers and acting with integrity, the opposite of today's rampant cronyism."

This must surely be the reason that the Koch Brothers are opposing a Florida ballot initiative to allow homeowners to finance rooftop solar panels with third parties that are not necessarily their local utility. The ballot initiative has the support of Georgia Tea Party activist Debbie Dooley, as well as the Republican Liberty Caucus of Florida and the Libertarian Party of Florida. Americans for Prosperity Florida opposes the ballot initiative "because they are not free market." 

Really?? This is not free market, to facilitate new entry into the electricity supply business? To allow outsiders other than utilities to provide an alternative to regulated monopoly electricity service mode? It sounds like flat-out socialism, to me, protecting incumbent industries regardless of their economic merit. Sounds like the cronyism that Charles says he finds so offensive, protecting incumbent industries because they share an ideology. There really are few industries in the modern world that have been as allergic to innovation and efficiency as the electricity generation industry. In 1920, a kilowatt-hour delivered to the grid by a coal-fired power plant was about twenty percent of the energy contained in the raw coal. By 1999, that figure was thirty-three percent. That stands in pretty stark contrast to Moore's Law, that semiconductor processing speeds double every two years or so. Rooftop solar threatens to upend this dinosaur of an industry. Actually, with the restrictions on entry, as the Kochs would have it, it is more of a guild than an industry.

Florida does provide for net metering, the requirement that utilities buy back, under reasonable terms, excess electricity generated by residential owners of solar rooftop. The rub is that most homeowners cannot afford to buy and install solar rooftop panels without some financing. Under the Floridians for Solar Choice ballot initiative, homeowners can receive financing from some outside funder. The utility itself is not, under Florida law, permitted to finance solar rooftop panels to its customers. It is only allowed to sell electricity to its customers, not help them generate their own. The Arizona Public Service Company, the state's largest utility, received funding from the Koch Brothers to fight net metering in Arizona, attempting to keep rooftop solar out of the state. The Arizona Public Utilities Commission ruled that utilities had to allow net metering for rooftop solar owners, provided they paid a $5 monthly fee for access to the grid

That is the crux of the problem, and why the Koch Brothers are acting like such socialists, protecting their anachronistic utility friends under the guise of "freedom." Solar rooftop is disruptive, and it does in fact threaten the traditional hub-and-spokes, regulated utility model for electricity generation. Rooftop solar, cheap as it has become, threatens to make obsolete the large, expensive baseload power plants, many of them coal-fired and looking at a bleak future anyway.

The socialist dinosaurs in Florida have countered with their own ballot amendment, which contains this following language:
This amendment establishes a right under Florida’s constitution for consumers to own or lease solar equipment installed on their property to generate electricity for their own use. State and local governments shall retain the ability to protect consumer rights and public health and safety, and to ensure that consumers who do not choose to install solar are not required to subsidize the costs of backup power and electric grid access to those who do.
This sounds uncontroversial, attempting to conceal its real opposition to solar, and it skirts the tough issue -- what exactly would be a reasonable grid access fee for residential rooftop solar homeowners? Is the Arizona $5 fee too much? Too little for utilities to recoup their fixed costs of providing grid support?

This would be a good debate to have, one that is ongoing in Arizona, what residential rooftop homeowners should have to pay their utility to essentially have them back up their electricity generation. But is obscured by the sophomoric demagoguery that has, with the Koch's blessing, taken over the discussion in Florida. If you are sympathetic to the Koch Brothers, you would have to be disappointed that they do not seem interested in this discussion, but merely wish to entrench the incumbent utility industry, to protect their regulated profits at the expense of technological progress in electricity generation. This is not the first time that the Koch Brothers have allowed their high-minded principles to trump the discomfort of telling their friends they're wrong, they should do things the Koch way. Three years ago the Koch Brothers, funders of the libertarian think tank Cato Institute, tried to capitalize on the death of William Niskanen by claiming the right to buy his shares, trumping claims by Niskanen's widow, Kathryn Washburn. Their goal? To knock out the leader, Ed Crane, in favor of someone that the Koch Brothers wanted. What do you expect from a couple of good old-fashioned socialists but a coup at Cato?

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