BILL ANALYSIS                                                                                                                                                                                                              1

                            MARTHA M. ESCUTIA, CHAIRWOMAN

          SB 1 -  Murray/Campbell                           Hearing Date:   
          April 26, 2005                  S
          As Amended:         April 25, 2005           FISCAL       B
           Current law  and regulations establish subsidy programs for the  
          installation of solar photovoltaic (PV) systems administered by  
          California Energy Commission (CEC) and the California Public  
          Utilities Commission (CPUC).

           Current law  establishes a "net metering" program primarily for  
          PV systems.  This net metering program credits the customer for  
          any electricity produced by turning the electricity usage meter  
          backwards.  Net metering is limited to 0.5% of the utilities' or  
          energy service providers' demand.

           Current law  requires investor-owned utilities (IOUs) to increase  
          their existing level of renewable resources by one percent of  
          sales per year until a portfolio of 20 percent renewable  
          resources is achieved by no later than 2017.  Municipal electric  
          utilities are not subject to these standards, but are required  
          to implement and enforce their own renewable resource  
          procurement programs.

           Current law  provides a 7.5% state tax credit for the  
          installation of residential- and commercial-sized PV and wind  
          energy systems.

           Current law  excludes residential- and commercial-sized PV and  
          wind energy systems from property taxes.

           This bill  requires the CEC to develop, implement, and fund a  
          program to install 1,000,000 PV systems, or the generation  
          capacity equivalent of 3,000 megawatts (MW) on residential and  
          commercial customer sites by 2018.  This is to be accomplished  
          through subsidies which start at current subsidy levels of  
          $2.80/watt (or about $10,000 for a typical residential system)  


          and decline steadily to zero by the end of 2016.  Higher subsidy  
          levels are authorized for homes with superior energy efficiency.

           This bill  authorizes the CEC to develop a PV subsidy program for  
          affordable housing projects.

           This bill  requires the CPUC to develop a solar energy program to  
          accomplish the goals of this bill.  The cost of this program is  
          to be recovered from IOU ratepayers, including those residential  
          customers protected from cost increases under current law.  

           This bill  requires municipal utilities to adopt a similar  
          program with proportionate expenditures.

           This bill  requires the CEC to commence a proceeding by July 1,  
          2006, and conclude that proceeding within 3 years, to consider  
          if and when solar energy systems should be required on new  


           This bill  requires sellers of production homes, as defined, to  
          offer PV systems on new homes for which tentative subdivision  
          maps are completed on or after January 1, 2010.

           This bill  raises the net metering cap from 0.5% to 2%.  After  
          the CPUC has developed a special rate design for PV customers  
          which recognizes that the value of energy varies by time of day  
          and season, the net metering cap will increase to 5%.

           This bill  extends the existing 7.5% tax credit for the  
          installation of residential- and commercial-sized solar and wind  
          energy systems until 2017.

           This bill  extends the existing property tax exclusion for  
          residential- and commercial-sized solar and wind energy systems  
          until 2017.

          This is the Governor's Million Solar Rooftops proposal.  It  
          establishes ambitious goals for the installation of solar energy  
          systems for residential and commercial customers.  The solar  
          energy systems embraced by this bill are PV systems which  
          directly convert sunlight to electricity and are located on the  
          customer premise.  This bill does not include solar thermal  
          systems, which use sunlight to heat water, nor does it include  
          large wholesale solar electric generators.

           What's a PV System?
           A PV system has two main parts, the roof-mounted PV panels which  
          transform sunlight into electricity and the inverter which  
          transforms the direct current created by the PV panels into  
          alternating current which is usable in the home or on the  
          electric grid.  The orientation of the PV panels is crucial to  
          the success of the system; they must be south- or west-facing.   
          The panels must not be shaded and should be angled to capture  
          the most sunlight.  A typical residential PV system is 2kw -  
          4kw.  The installed cost is about $9000/kw so a 3kw system would  
          cost $27,000.  Rebates have been as high as $4500/kw and are now  
          at $2,800/kw, so the 3kw system would today cost $18,600 after  
          rebates.  A state tax credit would further reduce the price by  
          7.5% to $17,205.  For commercial customers the final after-tax  
          cost is much lower because of greatly accelerated depreciation  
          and a 10% federal tax credit.  


           Current Subsidies
           California has several subsidy programs targeted specifically at  
          PV systems.  The CEC administers a program for residential- and  
          small commercial-sized PV systems that provides a rebate for a  
          portion of the installed cost of a PV system.  That rebate was  
          initially $4.50/watt, or about 50% of the system cost, and has  
          since been lowered to $2.80/watt.  This program is funded  
          through the Public Goods Charge (PGC), which is a surcharge on  
          all IOU electric customers, and is budgeted at about $30 million  
          annually, though in 2004 the program spent $70 million on PV.   
          The CPUC administers a similar program for commercial-sized  
          customer-owned generation, including PV systems.  This program,  
          known as the Self-Generation Incentive Program (SGIP), costs  
          $125 million annually and is paid for out of electric rates.   
          The SGIP PV subsidy is $3.50/watt and is oversubscribed.

          In addition to these two subsidy programs there are numerous  
          other state and federal programs which substantially reduce the  
          after-tax cost of PV systems, particularly for commercial  
          customers.  These include a 10% federal tax credit, accelerated  
          depreciation, a 7.5% state tax credit, accelerated depreciation  
          for state taxes, and favorable property tax treatment.  By  
          themselves these tax benefits for commercial customers are worth  
          more than the state subsidy, according to CEC estimates.  Other  
          state subsidies are net metering, which reverses the electric  
          meter as electricity is produced, and an exemption from exit  

          Since 1976 California has provided just over $1 billion in tax  
          credits for solar energy systems.  In 2003 the credit was $8  

          As of the end of 2004 there were 12,000 PV systems in California  
          with an aggregate rated capacity of 93 MW.  (This includes the  
          PV capacity in municipal utility territory.)  It will be heavy  
          lifting to reach the program goal of 1,000,000 PV systems or  
          3000 MW in 13 years.

          By any measure, California has been a leader in the pursuit of  
          alternative energy sources and energy efficiency.  Every year  
          customers of California's IOUs, through a PGC, pay an extra $228  
          million to fund energy efficiency and conservation, $135 million  
          for renewable energy, and $62.5 million for energy research,  


          development and demonstration.   Legislation authorizing the PGC  
          was enacted in 1996 (AB 1890 - Brulte: Chapter 854 of 1996) and  
          again in 2000 (AB 995 - Wright: Chapter 1051 of 2000), both on a  
          bipartisan basis.  California's Renewable Portfolio Standard is  
          an additional commitment to renewable energy.  It requires  
          utilities to increase their purchase of renewable energy by 1%  
          annually until 20% of their energy is from renewable sources.

           California Electricity Rates Among the Highest in the Nation
           California's electricity rates are the highest in the  
          continental United States.  Typical are the rates paid by  
          Southern California Edison residential, commercial, and  
          industrial customers, which are 55%, 94%, and 146% higher than  
          the national average, respectively.<1>

           Prior Efforts
           Last year the Governor introduced a Million Solar Homes proposal  
          late in the legislative session.  That proposal, contained in SB  
          199 (Murray), differed from this bill in several important ways.  

             SB 199                               SB 1  
            Homes only                         Homes and non-industrial  
            Authorizes an increase of up to    No cap on the rate increase
            0.05 cents/kwh
            Homebuilders required to offer solar                            
            Homebuilders required to offer solar
            when subdivision map is complete by 1/1/07                      
            when map is complete by 1/1/10

          SB 199 was not successful.  Instead AB 135 (Reyes: Chapter 867  
          of 2004) was enacted which authorized internal borrowing within  
          CEC programs so that existing PV programs could continue.

          <1> Comparison for 2003 based on data compiled by the California  
          Energy Commission and the Energy Information Administration's  
          2003 Annual Energy Review.


                              QUESTIONS FOR THE COMMITTEE
                 Given current state and federal PV programs, what  
               problem does this bill solve?
                 Should California establish a new multibillion dollar  
               subsidy program specifically for the PV industry?
                 Is this the best use of ratepayer and taxpayer resources  
               compared to other public purpose investments such as energy  
               efficiency and other renewable technologies?
                 How can the program established in this bill be improved  
               to increase the likelihood of success and reduce costs?

             1.   Letting the Sun Shine  .  Supporters believe that PV is a  
               unique technology because it is clean, produces electricity  
               during peak times when it is needed most, and can be  
               installed on customer premises.
               Supporters see this bill as the catalyst for a strong,  
               indigenous, self-supporting solar industry.  By  
               establishing a long-term commitment to PV and long-term  
               purchase incentives, PV sales will predictably increase  
               leading to increased investment by solar manufacturers and  
               installers.  This generates scale economies which in turn  
               reduce prices leading to even more sales.  This virtuous,  
               self-reinforcing circle will lead to enough sustained  
               demand that subsidies will no longer be needed within 11  
               years, according to supporters. 

               The Japanese experience with PV incentives is often cited  
               as the model for this bill.  In 1994 the Japanese  
               government established a goal of 70,000 homes with 3kw  
               systems by 2000 and half of new homes by 2010.  Supporters  
               indicate that those targets are likely to be met and that  
               the federal subsidy has decreased from $12/watt to almost  

               The goal of this bill is to create 3000MW of clean  
               electricity and to transform the PV industry so that it can  
               compete without government subsidies. (By way of  
               comparison, 3000MW is about the size of 6 large  
               powerplants.)  The cost of doing this is unknown, but  
               supporters believe that $2 billion - $2.5 billion in  


               ratepayer subsidies is a reasonable guess.  To accomplish  
               its goals the bill does three things: 1) establishes a PV  
               rebate program, 2) requires production home builders to  
               offer PV, and 3) extends current PV tax breaks.

              2.   Why Is This Bill Needed  ?  California's Electric Needs  
               Are Being Met -- Since 2001 California policymakers have  
               spent a great deal of time ensuring that electricity  
               shortages are not repeated.  Legislation regarding  
               electricity procurement and planning has been enacted, and  
               the CPUC has established a competitively bid procurement  
               process.  Earlier this year this committee was told by the  
               CPUC that energy supplies, while tight, are adequate.   
               Consequently, this bill is not necessary to meet  
               California's electricity needs.  

               PV Programs Continue Without this Bill -- Nor could this  
               bill be necessary to sustain the PV industry.  If this bill  
               fails both the CEC and CPUC PV programs continue, though  
               the CEC's program will need to find additional revenue as  
               it will run through even the additional revenue provided by  
               AB 135 last year.  The CPUC program will continue through  
               2007 and will not run out of funding as the CPUC has the  
               authority to increase rates to raise revenues.  And, the  
               existing net metering statutes remain.  Because San Diego  
               Gas & Electric is close to the net metering cap there is a  
               potential problem, but SB 816 (Kehoe), which passed this  
               committee without opposition, deals with that.

               A Good Investment? -- If this bill isn't necessary to meet  
               California's electricity needs or to keep the PV industry  
               viable, then the only remaining reason for this bill is  
               that it is a good investment for ratepayers.  This bill  
               requires ratepayers to invest about $2 billion for clean  
               energy that is produced during peak hours.  But the actual  
               investment is far greater if the investment by taxpayers is  
               also considered.  The value of state and federal tax breaks  
               to commercial PV purchasers is greater than the value of  
               the rebate proposed by this bill.  Supporters have  
               presented an analysis which they believe demonstrates that  
               the rebates are cost effective over the 13 year period  
               covered by this bill based on the savings from substituting  
               the PV generated electricity for purchased electricity.   
               While the merits of that analysis can be debated, it is  


               clear that if the substantial cost of the state and federal  
               tax breaks are also considered the program envisioned by  
               this bill is not a sound ratepayer and taxpayer investment.  
                However, that analysis does not consider the value of a  
               growing California-based PV industry that does not rely on  
               government subsidies, to the extent that this is an outcome  
               of the bill.  Another analysis offered by supporters  
               details the benefits of PV systems, assigning a range of  
               values to each benefit (e.g. avoided carbon dioxide  
               emission, avoided transmission and distribution costs).   
               That analysis shows that PV power is potentially highly  
               valuable, though at the low end of the range a large  
               subsidy as proposed by this bill is not justified.   
               Opponents dispute this analysis arguing that some of the PV  
               benefits are illusory.

               Why 3000 MW? -- The primary goal of this bill is to obtain  
               3000 MW of PV capacity.  This number is not rooted in any  
               particular assessment of electrical capacity shortage,  
               though it is the number you get when you take one million  
               homes and multiply that by an average PV system size of  
               3kw.  There appears to be no magic to 3000 MW.

              3.   Cheaper Ways to Get it Done  .  Assuming that peak demand  
               reduction is desirable, there are many ways to achieve it  
               in addition to investments in PV.  Energy efficiency and  
               other renewable energy sources may be less costly options,  
               for example.  When the Legislature decided that less  
               reliance on fossil and nuclear fuels was in the public  
               interest, it passed a Renewable Portfolio Standard (RPS)  
               with overall goals and a budget.  Rather than choose a  
               specific renewable technology the RPS legislation  
               identified a variety of technologies.  Then, using a  
               competitive bidding process, renewable energy is procured  
               based on the lowest cost.  If those costs are higher than  
               market prices for non-renewable energy the extra cost is  
               paid for out of the PGC as long as funds are available,  
               thereby limiting ratepayer risk.  The RPS process took  
               advantage of competition to reduce costs, making our  
               renewable energy goals more attainable.  This bill does  
               just the opposite.  It picks a winning technology, thereby  
               eliminating much of the competitive pressure to reduce  
               price and innovate.  And it provides a ratepayer and  
               taxpayer subsidy which could easily reach several billion  



              4.   Will the Bill Achieve Its Goals  ?  Things Change -- One  
               of the goals of this bill is to encourage investment in PV  
               installation infrastructure and to reduce PV costs so that  
               PV will no longer need a government subsidy.  Those with a  
               long memory will recall that those same promises were made  
               in 1996 by renewable energy advocates when they urged  
               implementation of a 10-year PGC.  It should be no surprise  
               that we've found that 10 years was not enough; the PGC has  
               been extended for an additional 5 years.  Similar promises  
               were made when net metering legislation first came before  
               the Legislature in 1995.

               Unfulfilled promises are nothing new in the Legislature,  
               not withstand the sincerity of the promisers.   The real  
               question is whether any state legislation can be  
               comprehensive and far-reaching enough to guarantee the  
               growth of an entire industry.  The problem is that state  
               legislation has a limited scope.  It cannot control events  
               in other states, changes to federal law and taxes, global  
               competition for PV products, inflation, the cost of  
               competing technologies, cultural norms, and the many other  
               variables that will effect the growth of any industry.   
               Things change that are far outside the reach of state  

               The most obvious example of the effect of unforeseen and  
               uncontrollable events on PV growth is California's 2001  
               electricity crisis.  Blackouts and a 40% increase in  
               electric rates spurred unprecedented growth in PV demand,  
               something that the existing state and federal PV support  
               programs were unable to do.  But if the CPUC ever succeeds  
               in reducing electricity prices and ensuring supply  
               reliability those factors will reverse and the  
               attractiveness of PV will diminish.  Changes to federal tax  
               law could also vastly change the economics of PV,  
               particularly for commercial customers.  If this bill is  
               enacted it is difficult to believe that ten years from now  
               the PV industry won't be back in Sacramento with a  
               perfectly valid reason why a new subsidy program is  
               necessary.  In a term-limited world, those reasons may well  


               Other factors out of the control of state legislation are  
               influencing PV prices today.  Germany has initiated a large  
               and expensive PV program.  It has attracted a lot of PV  
               supply, so much so that there are reports of PV panel  
               shortages and accompanying increases in PV system prices in  
               California.  It is perhaps giving ourselves too much credit  
               to believe that any state, even one as big as California,  
               can do enough or spend enough to drive a global industry to  
               substantially reduce its prices.  

              5.   Making the Program More Effective  .  Focus on New Homes  
               -- The second largest component of PV system cost is the  
               cost of installation.  The vast majority of PV systems are  
               installed on a custom basis, mostly by retrofitting homes.   
               These costs could be reduced if the PV systems were  
               standardized and installed en-masse.  New production homes  
               would be ideal for this.  A number of additional benefits  
               arise as well.  By designing the PV system with the home  
               architecture the efficiency of the PV system could be  
               maximized through roof design, orientation of the house,  
               and placement of landscaping.   Design and engineering  
               costs could be minimized because the designs could be  
               reused for other homes in the subdivision.  Marketing costs  
               would be minimized because the systems could be sold to  
               builders of hundreds of homes rather than owners of  
               individual homes.  Financing costs would be minimized as  
               the cost of the PV system could be included in the home  
               mortgage.  And most new homes are being built in the  
               hotter, sunnier areas of the state where PV is ideal.  This  
               bill requires production homebuilders only to offer PV by  
               2010, a much less aggressive requirement than in the  
               Governor's solar bill from last year.   It further requires  
               the CEC to consider whether PV should be required in new  
               homes by 2009.  Given the substantial additional benefits  
               of PV on production home construction,  the author and  
               committee may wish to consider  phasing in a mandate to  
               include PV on a percentage of homes.  Not only would this  
               guarantee the sales volume, but it would also eliminate the  
               ratepayer subsidy for this part of the program.

               Performance-Based Incentives -- Recent evaluations of PV  
               systems raise questions about their performance.  An  
               analysis of the large PV installations showed that at  
               California's 2004 peak electric demand, those systems was  


               producing only 39% of their rated capacity.<2>  An earlier  
               report analyzing a much smaller sample of older systems  
               showed that the actual capacity of the PV systems was 30%  
               less than the rated capacity and that the capacity factor,  
               or the output of the PV systems as a percentage of the  
               theoretical maximum, was 13%.<3>   These studies indicate  
               that PV systems may be underperforming, which highlights  
               the need for performance-based incentives.  Current PV  
               rebates are awarded up front and are based on the rated  
               capacity of the PV system.  If instead of up-front rebates  
               the incentives were based on electricity production the PV  
               customer would have a much greater incentive to install the  
               system in a way to maximize production and to maintain the  
               system to achieve optimum performance.  

               This bill authorizes the CEC to develop installation  
               guidelines to encourage maximum energy production.  But  
               these guidelines will be effective only if they are  
               enforced, and it's unlikely the CEC will have sufficient  
               resources to inspect one million PV installations.    
               Because performance-based incentives will be self-enforcing  
                                       they will be more effective.  The CEC has just commenced a  
               pilot program using performance based rebates.   The author  
               and committee may wish to consider  requiring the use of  
               performance-based incentives.

               Progress Report -- Supporters are asking the Legislature to  
               authorize a ten year, multi-billion dollar program without  
               any guarantees of benefits.  But rather than establish a  
               program and set it on auto-pilot for 10 years, perhaps it  
               would be better to give the industry a shorter time frame  
               to demonstrate progress.  After a successful mid-term  
               evaluation the program could then continue.  This is what  
               the Legislature required of the PGC, where it was reviewed  
               after five years and renewed based on performance.   The  
               author and committee may wish to consider  establishing a  
               review of this program after four years of experience, and  
          <2>  CPUC Self-Generation Incentive Program Fourth-Year Impact  
          Report (Final Report  ), submitted to Southern California Edison  
          and the Self-Generation Incentive Program Working Group,  
          prepared by Itron, April 15, 2005, p.8-5.
          <3>  Measured Performance of California Buydown Program,  
          Residential PV Systems  by Kurt Scheuermann, Regional Economic  
          Research, Inc., for the California Energy Commission, undated.


               to annually track the progress of the program in  
               publicly-available reports.  If the program is judged to  
               have met the expectations of the Legislature as established  
               in this bill, the subsidies could then continue for its  
               final five years.

               Only One Program -- Staff understands that it is the intent  
               of this bill is to encompass all the state PV programs into  
               a single program, though that is a little unclear in the  
               bill language.   The author and committee may wish to  
               consider  clarifying that this bill establishes a single  
               program.   The author and committee may also wish to  
               consider  barring any other PV incentive programs except for  
               those specifically created in this bill.

              6.   Another Way to Raise the Money  .  Supporters believe that  
               this bill will require $2 billion to $2.5 billion in  
               ratepayer subsidies.  The bill authorizes the CPUC to add a  
               surcharge to electric bills to raise sufficient funds to  
               achieve its objectives.  That surcharge would be about two  
               tenths of a cent per kwh ($0.002/kwh).  The effect on  
               individual ratepayers would be relatively small, about  
               $15/year for residential ratepayers according to  
               supporters.  But electric rates are made up of a lot of  
               relatively small components.  It is easy to make the  
               mistake of looking at any one component of the bill as  
               relatively small but not seeing that the cumulative effect  
               is to make California's electricity rates the highest in  
               the country.

               California currently has two PV programs.  The CEC's  
               program is paid out of the PGC.  In 2004 the CEC spent $70  
               million in rebates.  About $30 million was ongoing funding  
               and the remainder from internal borrowing.  The CPUC's SGIP  
               program is $125 million annually, the vast majority of  
               which is PV.  Current PV subsidies are therefore anywhere  
               from $100 million to $150 million in ongoing funding.  This  
               current funding level is not far from the $200 million  
               annually that would be required to provide $2 billion over  
               10 years.  Simply extending the subsidy duration from 10 to  
               15 years would result in about $2 billion in subsidies  
               without requiring a rate increase.   The author and  
               committee may wish to consider  deleting the authority for a  
               new rate increase and instead earmark the existing PGC and  


               SGIP funding, as well as extend the life of the SGIP  
               funding, for the PV program for 15 years.  

              7.   Who Benefits  ?  For those who can afford it and who have  
               a long-term perspective, the PV program envisioned by this  
               bill, in conjunction with the tax credits, makes installing  
               a PV system an attractive option.  But the cost of the PV  
               system makes it impossible for low- and middle-income  
               customers to even consider.  As those customers will never  
               be able to participate in the rebate program,  the author  
               and committee may wish to consider  whether they benefit  
               before making them pay for it?  Under this bill the cost of  
               this program is exempted from the existing protections  
               against rate increases for residential customer usage up to  
               130% of the baseline quantities.  Supporters argue that the  
               electricity generated by the PV systems will reduce the  
               amount of electricity needed to meet peak demand.  As that  
               electricity is the most expensive, PV systems reduce the  
               overall cost of electricity which benefits all customers.  

               This argument is true, but only partly.  Peak demand is  
               most severe and costly during summer weekdays, and for  
               those costly peak hours PV systems are most valuable.   But  
               PV systems generate during hours that aren't peak, like  
               summer weekends, weekday mornings, and days that aren't  
               hot.  Also, as summer shifts into fall and winter, peak  
               demand shifts into later hours of the day so that by winter  
               the peak demand occurs well after sunset.   

               While this program provides some benefits to all customers,  
               it is hard to see how those benefits overcome the cost of  
               the program for low- and middle-income customers.   The  
               author and committee may wish to  delete the override of the  
               rate increase protection for residential usage up to 130%  
               of baseline.  (If the suggestion to simply use funding from  
               the existing CEC and CPUC programs is accepted this issue  
               will have to be handled differently as all customers and  
               all usage contributes to the cost of both programs.)

              8.   Other Issues  .  Labor Issues -- An insurmountable issue  
               in the Governor's solar bill last year was whether PV  
               projects which received state subsidies should be subject  
               to prevailing wage laws.  This bill does not require  
               prevailing wage.  The authors and interested parties are  


               discussing the issue.

               Municipal Utilities -- Municipal utilities are required to  
               establish a comparable PV program and to spend comparable  
               amounts of money.   This raises the same questions for  
               municipal utilities as it does for IOUs:  Is there a  
               problem which this bill solves, and does it solve that  
               problem in a cost-effective way?  With municipal utilities  
               the questions are more acute because these utilities are in  
               lesser need of resources than the IOUs and may have a  
               climate which is not conducive to PV installations.  Rather  
               than establish consistency among utilities for its own  
               sake,  the author and committee may wish to consider  giving  
               the municipal utilities more flexibility to meet whatever  
               problem they are alleged to have.

               Renewable Energy Credits -- There is an ongoing discussion  
               about requiring utilities to purchase renewable energy and  
               to establish a credit trading program to facilitate meeting  
               that requirement.  The creation of renewable energy credit  
               (REC) trading creates wealth for those who have the REC  
               because they can sell it to those who have to buy it.  PV  
               systems create renewable energy and hence RECs.  These  
               could potentially be extremely valuable, as were the air  
               pollution credits during the 2001 electricity crisis.  This  
               bill does not speak to who owns the REC from a subsidized  
               PV system.  There are many competing claims on the REC,  
               including the PV system owner, the ratepayer, and the  
               taxpayer, all of whom have paid for part of the PV system.   
               If REC trading is permitted, revenues from selling PV  
               generated RECs may be useful in helping pay for the program  
               created in this bill.

               Affordable Housing -- This bill  authorizes  the CEC to set  
               aside support for PV systems on affordable housing.   The  
               author and committee may wish  to  require  the CEC to set  
               aside support for affordable housing.

               Rooftops Only -- While this bill is called the Million  
               Solar Rooftops initiative, there is no bar on putting PV  
               panels on the ground.  This may be an unwise use of land,  
               and has become somewhat of a controversy for a very large  
               PV installation in Butte county.


               Overdue reports -- The CPUC was required to provide the  
               Legislature and the Governor with an analysis of the costs  
               and benefits of net metering by January 1, 2005.  A report  
               was submitted on March 29, 2005 but it fails to provide a  
               cost/benefit analysis.  Instead it reports on the CPUC's  
               progress at developing such an analysis, which will not be  
               ready in time to assist the Legislature in evaluating this  
               bill.  The Governor was required to create an independent  
               panel to review the PGC expenditures and submit a report to  
               the Legislature by January 1, 2005 on whether to change or  
               eliminate the PGC on or after January 1, 2007.  This report  
               has not been provided, nor has the independent panel been  



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          |Alliance for Nuclear            |National Wildlife Federation       |
          |Responsibility                  |New Vision Technologies            |
          |American Federation of State,   |NorCal Solar                       |
          |County and                      |Our Children's Earth               |
          |        Municipal Employees     |Pacific Environment                |
          |American Lung Association       |Pacific Gas and Electric Company   |
          |American Colar Energy Society   |(if amended)                       |
          |Bluewater Network               |Physicians for Social              |
          |California Alliance For         |Responsibility                     |
          |Consumer Protection             |Planning and Conservation League   |
          |California Building Officials   |Powerlight Solar Electric Systems  |
          |California Interfaith Power &   |Public Citizen                     |
          |Light                           |PV Manufacturers Alliance          |
          |California League of            |Rainforest Action Network          |
          |Conservation Voters             |Real Goods                         |
          |California Public Interest      |Relational Culture Institute       |
          |Research Group                  |Sempra Energy (if amended)         |
          |California Public Utilities     |Sharp Solar                        |
          |Commission                      |Sierra Club California             |
          |City of Santa Cruz              |South Coast Air Quality Management |
          |Clarum Homes                    |District                           |
          |Clean Power Campaign            |Sun Power & Geothermal Energy      |
          |Coalition for Clean Air         |The Better World Group             |
          |Community Environmental Council |Union of Concerned Scientists      |
          |East Bay Municipal Utility      |Vote Solar                         |
          |District                        |Working Assets                     |
          |Environment California          |World Council for Renewable Energy |
          |Global Green USA                |Yolo county Board of Supervisors   |
          |Gray Panthers                   |Several                            |
          |Green Lease, Inc.               |individuals                        |
          |Greenpeace USA                  |                                   |
          |Henry T. Perea, Councilmember   |                                   |
          |7th District KYOCERA            |                                   |


          |International, Inc.             |                                   |
          |                                |                                   |
          California Manufacturers & Technology Association
          Southern California Edison
          The Utility Reform Network

          Randy Chinn 
          SB 1 Analysis
          Hearing Date:  April 26, 2005