Thoughts on Solar

UPDATE - 5/28/16 - Despite our best efforts, AB 2339 was HELD in the Appropriations Committee, effectively killing the bill this session.  Thank you to everyone who took the time to call and voice their support for the bill.  Special thanks to Frank Andorka who created a podcast in support of the bill, all the way from Cleveland!  We lost this battle, but the fight continues.

UPDATE - 5/26/16 - We passed the Assembly Utilities Committee on a 10-2 vote, but right now we are stuck in the Assembly Appropriations Committee, chaired by San Diego Democrat Lorena Gonzalez. The decision of whether to allow AB 2339 to  advance to the Assembly Floor rests in the hands of two people: Chair Gonzalez and Speaker Rendon.  Please take a moment to give them a call and urge them to support the bill.  Here are their numbers:

• Lorena Gonzalez, Chair Assembly Appropriations Committee: 916-319-2080
• Speaker Anthony Rendon: 916-319-2063

Thanks!

Back in February we wrote about the new Net Metering 2.0 rules that the California Public Utilities Commission (CPUC) approved over the objections of the Investor-Owned Utilities (IOUs), SCE, PG&E, and SDG&E.

We noted at the time that the CPUC rulemaking did not directly affect the Municipal Utilities (munis, like Pasadena Water and Power). Boy was that right as muni after muni is looking to shut down Net Metering altogether! Here’s our take, and more importantly, an action item that you can take to preserve Net Metering with the munis.

How We Got Here

The munis  are generally free, within the limits of state law, to set their own policies as confirmed by the local city council.  So here in Pasadena, PWP sets its policy but has to have that policy ratified by the city council’s vote.  When it comes to Net Metering, state law requires that the munis, like the IOUs, offer Net Metering agreements until the amount of solar deployed exceeds “5% of the electric utility’s aggregate customer peak demand.” (CA Public Utilities Code § 2827)  Now if that quote seems like less than a model of clarity, you are quite right.  Before the CPUC, the IOUs argued that it meant that you look at a utility’s highest peak demand as of a certain point in time, and that would be the cap.  Such an interpretation, however, reads the words “aggregate customer” out of the statute.  The CPUC agreed, and the proper interpretation requires the utility to sum the aggregate demand from each customer and that becomes the cap.

The results are dramatic - the proper interpretation effectively doubles the total amount of solar allowed under the cap.  That decision by the CPUC back in 2012 redefined Net Metering, but only for the IOUs.  At the time there was little concern regarding the munis since none was close to reaching their cap. 

Fast forward to today and five munis have already reached their caps, as calculated under the old, pre-CPUC ruling, methodology.  That leaves them free to replace Net Metering with whatever they choose, and at least one, Turlock, has adopted new rules that have resulted in an 85% decline in the solar market there!  (In contrast, LADWP has already agreed to the new methodology thanks to leadership from Mayor Garcetti.)

Support AB 2339!

Fortunately there is a fix in the works.  AB 2339 (Irwin - D-44) will require that the munis calculate their caps in effectively the same way as the IOUs.  The bill is presently in the Assembly Committee on Utilities and Commerce, chaired by Mike Gatto (D-43) - a former student and colleague of mine, and a champion of clean energy.

We need the strongest bill possible coming out of the committee, and you can help make that happen.  How?  Our friends at CALSEIA have compiled a target list of key assembly members who need to here from their constituents on this bill.  From the CALSEIA newsflash:

Target List:

• Jim Patterson (R-Fresno/Clovis) 916-319-2023
• Susan Eggman (D-Stockton/Mountain House/Thornton/Tracy) 916-319-2013
• Mike Gatto (D-Burbank/Glendale/La Canada/La Crescenta) 916-319-2043
• Bill Quirk (D-Hayward/Ashland/Castro Valley/Cherryland/Fairview/ Fremont/ Pleasanton/San Lorenzo/Sunol/Union City) 916- 319-2020
• Miguel Santiago (D-Huntington Park/Vernon) 916- 319-2053
• Eduardo Garcia (D-Imperial/Blythe/Brawley/Calexico/Cathedral City/Coachella/Desert H.Springs/El Centro/Indio) 916- 319-2056
• Christina Garcia (D-LA/Bell Gardens/Bellflower/Cerritos/Commerce/ Downey/Montebello/Pico Rivera) 916- 319-2058
• David Hadley (R-Torrance/Gardena/Lomita/Manhattan Beach/Palos Verdes Estates/Redondo Beach/West Carson) 916- 319-2066
• Phil Ting (D-San Francisco) (916) 319-2019
• Rocky Chavez (R-Oceanside/Calsbad/Encinitas/Vista) (916) 319-2076

If you live in one of those districts, or if you run a business in one, or have customers there, please contact that member.

More generally, there is a website where anyone can go to express their support for expanding the benefits of Net Metering to muni customers throughout the State.  Just click on the button to make this happen:

Sadly, the list of entities opposing this bill includes Pasadena Water and Power - looks like we need some political leadership here in our own backyard to get PWP on board.

We will update this post as the bill progresses through the legislature - watch this space!

A news report from RenewEconomy highlights the transition of Palo Alto, California to 100% renewable energy and it got us to wonder, so what about the rest of you munis?

To be sure, Palo Alto has a significant advantage over most utilities - IOU or municipal - in that it gets 50% of its electricity from hydro-electric sources.  Still, this was a giant leap forward toward sustainability for the city which is home to Stanford University.  Palo Alto intends to supplement its hydro sources with wind farms, solar arrays and renewable gas captured from landfills.  If those aren’t sufficient to meet the city’s needs, they will buy non-renewable energy with renewable energy credits.

If you are expecting that much progress to come with a shocking price tag, you would be right.  But the shock is how low - just $3 per customer per year!

From the article:

“Palo Alto has been a leader in reducing its carbon emissions,“ Mayor Greg Scharff said of the decision – the city first established its Climate Action Plan in 2007, setting goals for reducing greenhouse gas emissions from all sources.

“When we realized we could achieve a carbon neutral electric supply right now, we were compelled to take action,” Scharff added. “Climate change is one of the critical challenges of our generation and we hope our actions will inspire others to follow suit.”

But, as PaloAltoPatch notes, being the owner of all of its energy utilities has given the city an advantage in the low-carbon stakes – the autonomy to make decisions based strictly on the best interests of Palo Altans, without worrying about shareholders.

“As a City, we’ve had cheaper, greener power for our citizens for decades, and being able to make this recent move to 100% carbon-free electricity is just another example of how owning our own utilities pays off,” said City Manager James Keene.

Of course, every muni utility has that same advantage - they can do what is best for the local residents without having to answer to far-flung shareholders who may not care what happens within the city.  So why are the policies of so many munis every bit as backward as their IOU cousins?

Could it be because in most cities the residents only pay attention to what their utility is doing when it dramatically raises rates?  Surely that is the case in Glendale - when Glendale Water & Power rolled out their fatally-flawed Feed-in Tariff, not a single resident spoke on the subject.  But now when GWP is trying to institute a 24% rate hike they are getting lots of public participation, that is - anger - in response.

Palo Alto may be in a particularly fortunate place to allow them to take this step, but every muni could be taking similar, if smaller, steps.

The public simply has to demand it.