By Sam Silerio
In February, El Paso Electric announced its “Vision for a clean energy future.” Through animated videos, roadside billboards, and television commercials, EPE is pushing the news that it aims to be 100% carbon free by 2045.
The plan describes vastly increasing its own solar assets, electrifying its fleet, and cleaning up its act to achieve that goal. This is good. The problem is that EPE envisions a future where they are still the monopoly provider of electricity for our city. The vision doesn’t contemplate another utility to compete with EPE, but the company also is opposed to anyone producing their own electricity at home. EPE punishes individuals who put up their own solar panels, also known as rooftop solar customers.
Once you install solar panels on your property in El Paso, your electric bill must start at $30.25 every month. This solar tax, or “minimum bill,” applies even if you didn’t use any electricity from EPE that month, and EPE’s minimum is more than two to three times higher than comparable electric utilities in New Mexico, San Antonio and Austin.
EPE justifies the solar tax with the fact that they lose business for each address that installs rooftop solar, and they say that the cost of maintaining the electric grid would otherwise be redistributed to everyone else who does not install rooftop solar. Instead of EPE absorbing that cost themselves, our utility is posting record profits year after year. It’s easier for EPE to punish rooftop solar instead of innovating smart, forward-thinking ways of incorporating these mini power plants all over the city into their grid.
EPE prefers to sell you energy from their own solar panels (so-called community solar) and maintain the monopoly-supplier arrangement they’ve always had with us – their “ratepayers.”
Rooftop solar threatens the monopoly
For the first time in its history, EPE’s individual ratepayers can save money by installing solar panels and producing their own electricity. Some rooftop solar owners are offsetting over 100% of the energy they use with their solar panels. That degree of independence from EPE is something new for the utility, who is accustomed to being the only means for people to have electricity. Rooftop solar produces energy on-site, eliminating the need for transmission costs, and can save individual property owners tens of thousands of dollars in energy costs over the 35-year lifespan of the solar panels.
Only 28,446 of EPE’s customers (less than 7%) have installed solar panels to date, but EPE is now receiving about 5,000 applications for solar interconnections annually.
From 2010 to 2020, the cost of installing rooftop solar on a residence fell by 64%. Prices will continue to fall drastically as manufacturing improves and becomes more widespread (think of the pricing on flatscreen TVs over the last 20 years).
Also, the black, rectangular solar panel is not the only option anymore. For those who don’t want visible solar panels on their home solar roof shingles and solar roof tiles are becoming more available.
Note that while the price of solar is falling, EPE is regularly raising its prices. Predictably, this will cause more people to consider rooftop solar. Eventually, so many people will install rooftop solar that EPE will either have to declare all-out war against it or innovate their way to relevance. Electric utility insiders at the Edison Electric Institute (EPE is a member) have called this foreseeable phenomenon the utility death spiral.
EPE also punishes rooftop solar by paying households less than the market price for the extra solar energy they generate. If you don’t use your solar energy at the moment your panels create it, EPE buys it back for 3 cents per unit and then turns around and sells it to other ratepayers at their retail rate of more than 13 cents. EPE should either allow people to sell energy to each other, or pay us fair market value for our resources.
In the early 1900s, the U.S. government granted monopolies to electric utilities to get electricity to the farthest reaches of the country. In exchange for the profits guaranteed by government-granted monopoly status, these electric utilities would establish the generation, transmission, and distribution networks necessary to electrify America.
Over a century later, this monopoly model still dominates the electricity industry in the United States. These days, electric utilities profit the most by building massive, centralized power plants and then using those to justify eternal rate increases and fees to their ratepayers to recover their costs. Examples include EPE’s Newman 6 natural gas plant ($164 million) and Buena Vista Energy Center solar farm ($187 million). These huge assets are great for both the utilities’ property portfolios and their receivables.
However, the widespread adoption of rooftop solar naturally leads to a decentralized grid model. Every rooftop with solar panels installed is a mini power plant that makes real energy.
A forward-thinking electric utility would incorporate these assets into their network, reward individuals for installing solar correctly, and reduce the amount of energy that it needs to provide from its own power plants during peak summer months. Instead of desperately clinging to its monopoly status, EPE should evolve into a marketplace.
An alternate vision
Imagine an electric utility that provides a marketplace instead of a monopoly; a utility that establishes an internet of energy – a vast, beautiful network of interconnected homes, businesses, and neighborhoods – for the transmission of electricity between them all.
Many of these homes and businesses would be able to produce a significant percentage of their own electricity and store it within their batteries and vehicles. There will be apps, much like CashApp or Venmo today, allowing for the trade of energy. You could pay for a 12 pack of beer from your favorite El Paso brewery by sending them 100 kWh of electricity from your home’s energy batteries via app (this is already happening in Australia). You could use the same app to send electricity to your neighbor’s home if they’re struggling to make ends meet that month.
This is what the democratization of energy looks like.
An electric utility creating such a marketplace would build and maintain this energy internet’s network of transmission lines, and would also provide supplemental power to the city when necessary. This utility could charge transaction fees for every time someone sends electricity to someone else.
Perhaps the marketplace model is not as profitable as the monopoly model for an electric utility, but how long must our city be stuck in the past for EPE’s benefit?
EPE is currently fighting against the Climate Charter, or Proposition K, in the May 6 election. Prop K is a citizen-led initiative that is on the ballot because of more than 39,000 signatures collected from registered voters in El Paso. Prop K threatens the monopoly power and corporate structure of EPE, so they’ve donated $200,000 (that’s a lot of electric bills) to a political action committee opposing the proposition.
For anyone to take EPE’s “vision” seriously, it must encourage rooftop solar in the Sun City, and not just peddle its own solar projects. This is the wrong city to fight against rooftop solar. Here are some steps to take:
- Get rid of the $30.25 monthly solar tax.
- Pay fair market value for rooftop solar overproduction.
- Equalize the treatment of rooftop solar in Texas and New Mexico.
Sam Silerio is the owner and operator of the solar company Sunshine City in El Paso. He is an Army veteran, UTEP alum, and Texas-licensed attorney.
Disclosure: El Paso Electric Co. is a financial supporter of El Paso Matters. Financial supporters play no role in El Paso Matters’ journalism.