The role of antitrust law in creating energy democracy
Originally published at ILSR.org
For this episode of the Local Energy Rules Podcast, a rebroadcast of episode 127 of the Building Local Power Podcast, host John Farrell speaks with guest Jean Su. Su, an attorney and Director of the Energy Justice Program at the Center for Biological Diversity, represented the Center in an antitrust suit against Arizona utility Salt River Project. Farrell and Su discuss how legal advocacy for energy democracy can overcome utility barriers to a renewable energy economy.
Listen to the full episode and explore more resources below — including a transcript and summary of the conversation.
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Injustice grows as the climate changes
Since completing her undergraduate studies at Princeton University, Jean Su has largely dedicated herself to climate justice work. After witnessing natural disasters in Madagascar and the devastation they left on the communities she worked with, Su came to understand climate change as the main threat to under-resourced communities across the globe.
If we were going to try to tackle extreme poverty issues and the wealth gap, internationally and nationally, it would have to be through the lens of climate.
After her time in Madagascar, Su worked extensively in Asia, Africa, and Europe. Ultimately, Su’s call to be an agent of change in her community drew her back to the United States as an attorney at the Center for Biological Diversity, a nonprofit membership organization known for its work protecting endangered species through legal action, scientific petitions, creative media, and grassroots activism.
Energy Justice and the Center for Biological Diversity
One way that the Center for Biological Diversity centers justice and equity in its work is by addressing energy policies and utility companies that disproportionately harm communities of color. The center does this in three ways: strategic litigation, the mobilization of people power and movement building, and effective policy advocacy.
Law is one very important way of addressing the challenges of climate change.
The myth of the regulatory compact
A century ago, electric utilities were granted monopolies because it was in the public interest to only build one set of transmission and distribution lines. However, many regulated utilities have abused this license — what they call the “regulatory compact” — to consolidate power and fend off any local power suppliers.
As more and more homeowners, businesses, and communities turn to solar power, utilities are employing many tricks to fight off what they see as competition. The thing is, the regulatory compact does not exist and local, resilient, renewable energy is in the public interest.
When monopoly utilities go out of their way to squash competition, solar advocates can use antitrust law to secure their rights.
Read about How Big Utilities are Impeding Clean Energy, and What We Can Do About It in our summary report.
The Salt River Project
The Salt River Project (SRP) is a public utility, though essentially a private corporation, and the primary electric provider for central Arizona. Although Arizona allows rooftop solar through net metering, SRP found a way to make installing rooftop solar prohibitively expensive.
For customers who have installed their own rooftop solar, SRP instituted a 65 percent rate increase on any electricity they need to buy beyond their own generation. Through this rate hike alone, SRP “decimated the market for rooftop solar” in one of the nation’s sunniest states, says Su.
The idea was definitely to decimate competition in a competing source of energy, and SRP succeeded in it, really well. Then the question became, how do we fight back against this?
As solar advocates were readying to take SRP to court, automotive and solar company Tesla purchased what was then Solar City. With the backing of the Tesla behemoth, Arizona solar advocates could take on a very expensive antitrust lawsuit against the Salt River Project. Su was one of the attorneys representing the Center for Biological Diversity in this suit.
In the electric utility sector, this is a sector that has not quite yet been touched [by modern antitrust reform]. And in fact, that’s why SRP is actually a pivotal case for this right now.
Unfortunately, after a technical stumble, Tesla settled with SRP before the case reached the supreme court.
Antitrust reform is not enough
To conclude, Su emphasizes that electricity is a human right. Private corporations with a profit motive are, she says, the wrong people to provide that basic service. Su is excited to reenvision the electricity sector and has hope in public power as an alternative.
I don’t think antitrust is enough. I think we are in a moment where we really need to question the system. The foundational principles of monopoly utilities no longer make sense because they are not serving the public interest… I do not think that corporations whose sole mission is to generate shareholder profits are acceptable anymore for delivering a basic human right.
See these resources for more behind the story:
- Read the Center for Biological Diversity’s Amicus Brief in its suit against the Salt River Project and its Legal Petition to stop utilities from forcing customers to bankroll anti-environment trade groups.
- Listen to Should Big Utilities Pay for Their Bad Choices? — episode 124 of Local Energy Rules.
- Listen to episode 104 of Building Local Power, which asks: Is Energy Still a “Natural Monopoly”?
- Click here for the 1973 Supreme Court case (Otter Tail Power Co v. United States) that set the limits of utility monopoly power.
- Check out our report on Why Utilities in Minnesota and Other States Need to Plan for More Competition.
For concrete examples of how towns and cities can take action toward gaining more control over their clean energy future, explore ILSR’s Community Power Toolkit.
Explore local and state policies and programs that help advance clean energy goals across the country, using ILSR’s interactive Community Power Map.
This is the 136th episode of Local Energy Rules, an ILSR podcast with Energy Democracy Director John Farrell, which shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion.
Local Energy Rules is Produced by ILSR’s John Farrell and Maria McCoy. Audio engineering by Drew Birschbach.
This article was originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter, our energy work on Facebook, or sign up to get the Energy Democracy weekly update.
Featured Photo Credit: Joe Gratz via Flickr (CC0 1.0)
Source: Renewable Energy