Nov. 12 (Bloomberg) -- Here’s a riddle to vex the Washington political class: When do Tea Party Republicans stand together with Sierra Club environmentalists?
The answer is on their support for solar energy against the monopoly power of traditional utilities in some of the most conservative U.S. states.
A Georgia splinter group known as the Green Tea Coalition, which is part of the broader anti-big-government movement, is reviving the Republican link with the Sierra Club that dates back more than a century to President Theodore Roosevelt’s work to protect the environment. Its influence is being felt in other states, from Arizona in the West to North Carolina on the East Coast.
“Some people have called this an unholy alliance,” said Debbie Dooley, founder of the coalition and a co-founder of the Atlanta Tea Party Patriots. She’s working with the Sierra Club to fight for solar and against nuclear power in Georgia. “We agree on the need to develop clean energy, but not much else.”
The alliance is a danger for utilities such as Southern Co.’s Georgia Power unit and Pinnacle West Capital Corp.’s Arizona Public Service, which are resisting the spread of solar energy as a threat to their business model. It may help solar developers such as SolarCity Corp. and panel manufacturers including SunPower Corp. of San Jose, California.
What’s uniting the environmental and Republican groups is the view that plunging prices for solar panels may mean consumers don’t need to buy all their electricity from utilities and their giant centralized generation plants.
“The free market approach works well in Republican circles, so I can understand how these strange bedfellows come together,” said Frank Maisano, an energy specialist at the Washington law firm Bracewell & Giuliani LLP. “It becomes an economic argument.”
Solar panel prices have fallen 57 percent since the start of 2011 to about 86 cents a watt as of Nov. 4, according to data compiled by Bloomberg. That means solar power costs an average $143 a megawatt-hour worldwide now, down from $236 in the first quarter of 2011, according Bloomberg New Energy Finance. Nuclear costs about $101 and natural gas $70, by comparison.
In Georgia, Southern’s plans to build two nuclear reactors at its Plant Vogtle site south of Augusta, each with 1.1 gigawatts of capacity, has drawn the ire of Dooley’s Green Tea group. Georgia Power customers already are paying a surcharge on their bills for the $14 billion project, even though they won’t start producing electricity until 2017 and 2018.
Dooley said the growing use of solar power is pressuring utilities to open their grids to other energy sources that may become even cheaper in the next few years. Customers should have a choice of buying electricity from the grid or making their own at home.
“There’s no competition here,” Dooley said in an interview. “Solar is our only way to force them to compete.”
Dooley’s group worked with the Sierra Club to successfully lobby regulators in July to require Southern to buy energy from 525 megawatts of solar panels owned by other parties, including about 100 megawatts from rooftop systems.
Georgia Power has excess supplies of energy and doesn’t need the additional generation from solar installations, said spokesman John Kraft.
“This wasn’t something we were seeking but we didn’t oppose it in the end,” Kraft said in an interview.
The odd-couple partners also are working to overturn a Georgia law that bars third parties from owning residential rooftop solar projects. The rule keeps developers such as SolarCity from installing rooftop panels at little cost to customers in return for revenue earned from selling solar power over the lifetime of the panels. That forces consumers who want rooftop power systems to shoulder all upfront costs and makes solar prohibitively expensive for most households.
Republican lawmakers are discussing lifting a similar ban in North Carolina, where Ruth Samuelson, a Representative from Mecklenberg, helped fight off attempts to gut the state’s renewable energy mandate earlier this year.
“Where the Tea Party and the Sierra Club align is on pro-fairness and about the future of the planet,” said Colleen Kiernan, director of the environmental group’s Georgia chapter.
Republicans had close links with the environmental movement until a few decades ago. John Muir, who founded the Sierra Club in 1892, took Roosevelt camping for three days in May 1903 among the giant sequoias and deep valleys of what would become Yosemite National Park in California. That helped win the Republican’s backing for 1906 legislation allowing the federal government to restrict activity on public land.
The party supported clean air legislation and President Richard Nixon’s creation of the Environmental Protection Agency in the 1970s. More recently, the conservationist wing of the party has been drowned out by Sarah Palin’s call in 2008 to “drill, baby, drill,” promoting oil exploration in Alaska.
Many Republicans remain opposed to solar energy mainly because it’s more costly than fossil fuels, according to Americans for Prosperity, a group founded by the billionaire Koch brothers that’s often allied with the Tea Party movement.
“We’ve had disagreements over solar,” said Virginia Galloway, director of Americans for Prosperity’s chapter in Georgia. Coal and gas both can generate electricity cheaper than solar, and requiring utilities to buy it will boost costs. “We oppose any mandates that would raise utility rates.”
Still, solar is beginning to attract the support of prominent Republicans including New Jersey Governor Chris Christie. Former President George W. Bush also endorsed solar power.
The next big test is in Arizona, where the son of Barry Goldwater, the 1964 Republican presidential candidate, is campaigning against the local utility in favor of solar energy.
On Nov. 13, regulators at the Arizona Corporation Commission in Phoenix are expected to consider a request by Arizona Public Service to charge customers as much as $100 a month to feed solar power onto the distribution grid.
Arizona is one of 43 states that requires utilities to buy electricity from household solar systems, potentially cutting into revenue for the company known locally as APS. The regulator’s staff recommended Oct. 1 that the utility’s request be rejected and the issue taken up again at a regularly scheduled hearing in 2015 for rates that would take effect the following year. Some conservatives are siding with the solar industry.
Utilities “don’t like the competition,” said Barry Goldwater Jr., son of the late senator and presidential candidate. “I’m a conservative Republican and I think people should have a choice.”
Arizona Public Service spokeswoman Jenna Shaver declined to comment on growing conservative support for solar energy.
Goldwater founded Tell Utilities Solar won’t be Killed, or TUSK, which calls APS’s proposal a “solar tax” that’s unfair to people who have invested in rooftop solar systems. Tom Morrissey, former chairman of the Arizona Republican Party, joined the group as co-chairman in October.
“Utilities have had their heads in the ground for so long they didn’t notice that it’s become cheap enough to compete with them,” he said.
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