Tag Archives: ALEC

Please, Help Keep Electric Rates Low – No Extra Fees On Solar Energy

Oklahoma SB 1456 , dubbed the Sun Tax,  is not a tax, but allows power companies to assess an extra fee on distributed generation (DG) customers who install renewable energy systems and hook to the power grid for backup.  Under the law, both PSO and OG &E have filed a request with the Corporation Commission to assess additional fees on DG customers. Those requests should be denied, as renewable energy development will help keep electric rates low. 
Public hearings on the request will be held in Oklahoma City on March 31 at 1:30 in Rm 301  of the Corporation Commission Building at 2101 North Lincoln Blvd. It would be great if a number of people could attend. Written comments may be submitted to N.Scott@OCCemail.com .  
Below is an article to refresh your thoughts on the issues involved. Please feel free to use any of the information in the article. The Corporation Commission is probably not interested in ALEC’s role so much as they are  your comments on  the rate case.

At the 2013 American Legislative Exchange Council (ALEC) meeting in Chicago, the Energy Committee, dominated by power and fossil fuel companies, decided one of  ALEC’s goals should be to discourage the spread of renewable energy. Their plan to do so was by weakening renewable portfolio standards (RPS), by claiming that renewable energy systems would make electric rates go up, and by promoting the idea that net energy metering (NEM) customers who install their own solar panels and use the grid for backup were “free riders” who did not pay their fair share of infrastructure costs. Legislation has since been introduced in a number of states intended to increase fees on NEM customers and to reduce the state’s RPS requirements.

SB 1456: Oklahoma passed SB 1456 the next year, which allows power companies to assess an extra fee on distributed generation (DG) customers who install renewable energy systems and hook to the power grid for backup. The law was designed to discourage the investment in renewable energy by private individuals, but it may have unintended consequences for the power companies pushing the fees. Under the law, both PSO and OG &E have filed a request with the Corporation Commission to assess additional fees on DG customers. Public hearings on the law will be held in Oklahoma City on March 31 at 1:30 on the third floor of the Corporation Commission Building. Studies (see below) have shown, when all things are considered, that DG customers provide a net benefit for all other customers. It is in the public’s best interest to request that not only should the fees be denied but, to be fair, the power companies should be required to compensate NEM customers for the extra power they produce.

Fairness: The rationale for SB 1456 was fairness, so the decision should be fair to NEM customers as well. First, NEM customers should be charged as any other customer for the electricity they use. DG  customers who use the grid for backup are required to have a net energy metering (NEM) contract with their power company which requires they pay for the installation and inspection of safety equipment. They also pay a customer fee which goes toward fixed costs and infrastructure, and they are currently not reimbursed for any extra power they produce, essentially providing free energy for the other customers, and they help to conserve energy. AEP/PSO’s states one of its mission is to “help customers use less energy and spend less for it”. Is it fair, then, that customers who cut their energy use in half by installing extra insulation are appreciated while those who cut their energy use in half by installing solar energy are charged an extra fee?

Second, NEM customers should be compensated fairly for the excess energy they provide. Research shows that states which encourage NEM customers have found they provide a small positive benefit both to other customers and to the power grid.  Why, then, should they be charged an extra fee?

Research: Studies have found that states which encourage net energy metering (NEM) experience a net benefit to all electric customers. A study by Crossborder Energy in 2014 found NEM allows utilities to avoid costs of generation and fuel, maintenance and upgrade of transmission and distribution infrastructure, transmission losses (which account to 7% of losses), capacity purchases, and compliance with renewable energy standards. The study concluded,” The cost which utilities avoid when they accept NEM power exported to their grid shows that NEM does not produce a cost to nonparticipating ratepayers; instead it creates a small net benefit on average across the residential markets.” While it does cause power companies to have to adjust their loads accordingly, NEM reduces peak loads, transmission losses, and the need for new power plants.  In California, the study found NEM “delivers more than $92 million in annual benefits to non-solar customers”.

Another important study was performed at the request of the Vermont Legislature who specifically charged the Vermont Department of Public Service with determining if there is a cross-subsidization with net metering and other retail customers. They were also asked to examine any benefits or cost of NEM customers to the distribution and transmission system.  The report found the specific ratepayer benefits, the statewide, and societal benefits of NEM as: “Avoided energy costs, including costs of line losses, capacity costs, and avoided internalized greenhouse gas emission costs; avoided regional transmission costs; avoided in-state transmission and distribution costs; solar’s coincidence with times of peak demand; and the additional benefit of the economic multiplier associated with the local investment and jobs created from the local manufacturing and installation of net metering systems. The report concludes, “ Even considering subsidies, solar net metering is a net-positive for the state of Vermont.”

These studies show that NEM customers provide a net benefit to ratepayers in states which encourage investments in solar and wind generation by private individuals. To be fair, NEM customers should be charged for the energy they use just as any other customer and they should be compensated for the extra energy they produce just as any other energy provider.

Unintended Consequences: Though SB 1456 was intended to discourage private investment in renewable energy, it may not turn out that way. Upon signing the bill, Gov. Mary Fallin attached a letter requiring “the Corporation commission to conduct a transparent evaluation of distributed generation consistent with the Oklahoma First Energy Plan. It also said, ” This evaluation mandates inclusion of all stakeholders including representatives of the solar distributed wind energy industries and utilities.” and “A proper and required examination of these other rate reforms will ensure an appropriate implementation of the Oklahoma first energy plan while protecting future distributed generation customers.”

The Oklahoma First Energy Policy encourages development of wind and solar energy, but it relies heavily on the increasing development of our natural gas resources. However, fracking and the associated disposal wells may be related to the increased incidences of earthquakes in Oklahoma.  If a definite link is established between fracking activities and earthquakes, it might greatly curtail Oklahoma’s production of natural gas. Oklahoma is now in the process of replacing some of its coal-fired power plants with natural gas plants. It would be prudent for Oklahoma to encourage the development of renewable energy systems. Recently, OG&E asked to increase its customer charges by $1.1 billion for federal environmental compliance and to replace an aging natural gas plant. Encouraging distributed generation customers to install extra capacity would not only help with the environmental compliance, but could eventually reduce the need to replace aging plants. Requiring that DG investors be compensated fairly for excess energy they provide would encourage them to install excess capacity to meet future demands.

A Model: Some electric co-ops , such as Oklahoma’s Indian Electric Cooperative, recognize the value of net energy metering. IEC allows net metering customers to accumulate credit for excess power and pays them at the end of the year for any excess credit at the wholesale rate, essentially treating them as any other power provider. If the Oklahoma Corporation Commission would adopt a similar model and require that NEM customers be compensated for the excess power they produce, it would greatly encourage private investments in renewable energy installations.

ALEC at Work in the Oklahoma Legislature

In a Readers Forum article in the Tulsa World, “Responsible, conservative reforms working”, Brian Bingman, president pro tem of the Oklahoma Senate, states how proud he is of what the legislature has been able to accomplish. Mr. Bingman is rather quick to pat himself and the legislature on the back, as the reforms he cites were more to the benefit of corporations than of the average citizen The tax reform and tax cut leaves the state badly underfunded. The balanced budget, achieved by cutting needed services, does not meet the needs of the state. The Capitol building repair was funded by bonds, rather than taxes, which has further indebted the state in the future. The education system is badly underfunded and the tax cuts have only made the situation worse in the future.

The workers compensation reform limits an injured workers right to full compensation for his injuries. Tort reform makes it harder for the average citizen to seek redress in court and limits the liability of corporations. The reform to the state’s public employee pension system, by privatizing the future pension system, destabilizes the existing program, and is a boon to private fund managers. The failure to expand Medicaid will cost the state billions of dollars in Federal funds, that we pay as taxes, and has left 144,000 Oklahomans without adequate healthcare. The hastily passed changes and extensions to corporate oil and gas subsidies, demanded by Oklahoma’s three largest oil and gas companies,  were unnecessary and will make the state’s budget problems worse in future  – and were likely unconstitutional.

Next to the Governor, Mr. Bingman is the highest ranking member of ALEC in our state and his achievements are  high on the list of ALEC’s model legislation. Many of those “accomplishments” benefit  ALEC’s corporate members, but in the end they will hurt Oklahoma and its citizens.  The Governor and 70 of our 149 legislators are members of ALEC, so what chance does an average citizen have?

If you would like to end the influence of ALEC on politics in Oklahoma, please go to https://okcitizensfirst.org/2014/04/24/alec/ and ask your candidates for office to pledge that they will put the needs of Oklahoma citizens first. Let’s vote out anyone who won’t.

Note: The related Credo Petition to Governor Fallin about Mediaid expansion is at:  https://www.credomobilize.com/petitions/governor-fallin-release-the-31-e-mails-about-medicaid-expansion

The The OK Citizens First Pledge:

As a candidate for public office in Oklahoma, I pledge that I will not join ALEC or any similar organization which will keep me from representing the best interests of Oklahoma citizens.

Purpose: This is a nonpartisan site set up to identify the candidates for office in Oklahoma who will pledge to represent, first and foremost, the interests of Oklahoma citizens.

Signing: Candidates may sign the pledge by stating so in an email to OKCitizensFirstPledge@yahoo.com . They will then be identified with an “OK” on the Oklahoma 2014 Candidate List below.

Reasons the Pledge is Needed

 ALEC in Oklahoma: Last May, the American Legislative Exchange Council (ALEC) met in Oklahoma City to help our state legislators write “model legislation”.  While representatives, lobbyists, and lawyers from ALEC’s Corporate contingency met with our lawmakers, citizens protested across the street. They, and members of the press, had been barred from attending by security guards. The agenda of the meeting was secret and an elaborate system kept it from being obtained by Freedom of Information Act requests. The model legislation was not published, yet some has been introduced in our legislature without being identified as ALEC legislation. ALEC has a team of corporate lawyers and think tank experts who develop biased rationales and write articles and op-ed pieces to justify and sell the model legislation. You may read more about the influence of ALEC in Oklahoma on the Oklahoma Policy Institute Blog.

Secrecy: What is known about ALEC has been discovered by leaked documents and by citizen’s watchdog groups.  ALEC is a 501(c)(3) organization which is not required to reveal its donors or its funding. It has 300 corporate and special interest groups as members and 1800 legislative members (70 from Oklahoma), but it will not release its membership lists. SourceWatch lists 27 Oklahoma Representatives and 10 Oklahoma Senators as members, leaving about 30 whose identities remain secret . They have introduced a number of bills which have been identified as ALEC “model bills”, others whose source is secret, and some have become law, much to the detriment of many Oklahoma citizens.

Bipartisanship: No matter what your political affiliation, I think you should agree that this is not the democratic way to make Oklahoma laws. Our laws should not be written in secret, introduced without identifying their source, and supported by our legislators who are members of a secret organization.

What you can do: If you are a candidate, pledge on your honor that will not join ALEC or any similar organization which will keep you from representing the best interests of Oklahoma citizens.

 If you are a voter:

  • find your candidates in the list below, and email them, asking them to take the pledge.
  • pick several other candidates from the list below and send them an email. Let them know you are concerned.
  • attend campaign events and ask candidates if they have pledged to put Oklahoma citizens first.
  • write op-ed pieces, letters to the editor, or post comments  – shining light on ALEC and publicizing the pledge.
  • anything else you can think of to help create a buzz. Help make this a campaign issue. And, please register and vote.

 Oklahoma 2016 Incumbent list with ALEC ties

Oklahoma Legislators with ALEC Ties

House of Representatives


Former Representatives

  has connected the following politicians to ALEC through ALEC documentation, the Oklahoma Almanac, or by ALEC donations as reported at the Oklahoma ethics webpage. 

State Offices

  • Governor – Mary Fallin
  • Lt. Governor  —  Todd Lamb
  • Attorney General  —  E Scott Pruit
  • Secretary of State  —  Glenn Coffee State
  • Treasurer  —  Ken Miller

U.S. Congress

  • James Inhofe R,United States Senate
  • Frank Lucas R, U.S. House of Representatives
  • Tom Cole R, U.S. House of Representatives

Note! This post was updated on May 28, 2016.