BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1947| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1947 Author: Fong (D) and lieu (D), et al Amended: 6/17/10 in Senate Vote: 21 SENATE ENERGY, U.&C. COMMITTEE : 6-2, 6/29/10 AYES: Corbett, Florez, Kehoe, Lowenthal, DeSaulnier, Simitian NOES: Dutton, Strickland NO VOTE RECORDED: Padilla, Cox, Wright ASSEMBLY FLOOR : 50-24, 6/2/10 - See last page for vote SUBJECT : Solar energy SOURCE : Sacramento Municipal Utility District DIGEST : This bill permits a publicly owned utility to implement a solar program that allows customers to offset part or all of their electricity demand, with a solar energy system not located on the premises of the consumer ANALYSIS : Current law establishes the California Solar Initiative (CSI), a $3.3 billion program to subsidize the installation of photovoltaic (PV) systems for customers of the state's investor-owned utilities (IOUs) and publicly owned utilities (POUs). Current law requires that the CSI solar system offset part or all of the consumer's own electricity demand and that CONTINUED AB 1947 Page 2 the system be located on the same premises of the end-use consumer where the consumer's own electricity demand is located. This bill eliminates those requirements for systems in the territories of the POUs under specified conditions. Background California Solar Initiative . Effective in 2007, the CSI calls for the installation of 3,000 megawatts (MW) of new, solar-produced electricity by 2016. Targeted expenditures under the CSI, funded by ratepayers, are $3.3 billion over ten years, distributed among three distinct program components: IOUs, $2.167 million/1940 MW; New Solar Homes Partnership, $400 million/360 MW; and POUs $784 million/700 MW. California now has over 736 MW of solar PV in the IOU territories at over 43,000 residential, commercial and governmental sites. This includes installed generation and pending applications. The POUs have installed 26 MW of generation at 7,712 sites and the NHSP reports 7.8 MW of solar PV at 3,002 sites. All CSI programs combined, California has approximately installed 770 MW of solar generation on the customer's side of the meter - 27 percent of goal. SolarShares . Marketed as an alternative to the installation of solar on a customer's roof, the SolarShares program is offered to customers in the territory of the Sacramento Municipal Utility District (SMUD). For a fixed monthly price over 20 years, the participating SMUD customer pays a fee of $258 to $396 per year to the utility and in turn receives a bill credit for the production of solar at a SMUD-owned site. The bill credit ranges from $174 to $313 in the first year of participation depending on the level of participation chosen by the customer and the energy produced by the central solar farm. Over the course of 20 years, the customer's fee remains the same but the bill credit is scheduled to increase. The central solar facility is located within the SMUD AB 1947 Page 3 territory and the power generated at the local solar farm is like any utility-owned generation and generally provides service to all customers except for purposes of customer billing for participants. This program does however make the participating customer feel like they are paying for and receiving green power. In reality this power is just like any other green power on the grid under the Renewable Portfolio Standard. Comments Author's purpose . Most utilities are making progress towards meeting their share of the CSI's 3000 megawatt goal. However, after four years of CSI experience and data collection it has become clear that many ratepayers who are paying the solar surcharge remain unable or unwilling to install solar on their rooftop for the following reasons: (1) Renters - ratepayers who rent and businesses who lease commercial space are all paying the solar surcharge but do not own any roof space to install solar; (2) Incompatible roofs - ratepayers with tile roofs, steeply pitched roofs, north or east facing roofs are paying the solar surcharge but may not have the right orientation for installing solar; (3) Shading - ratepayers with rooftops that are shaded by trees or other adjacent buildings are paying the solar surcharge but may be prohibited from installing solar; (4) Cost - the upfront cost of purchasing a solar system may be cost prohibitive for some ratepayers who nonetheless are paying the solar surcharge; and (5) Payback - Ratepayers who pay relatively low rates for electricity and/or use less electricity have a harder time justifying the cost of solar yet they too must pay the solar surcharge. This bill places downward pressure on rates by allowing POUs to reach their SB 1 goal using larger solar systems that cost less to build on a per kilowatt basis. Participating solar customers likewise will benefit under this bill through their ability to subscribe to a larger solar energy system that in many instances provides a shorter payback period than traditional rooftop solar. The participating customer also benefits by receiving all the solar attributes without the maintenance requirements of a AB 1947 Page 4 rooftop system. The sponsor of the bill have provided the committee with a cost/benefit comparison spreadsheet of their SolarShares pilot project. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 6/30/10) Sacramento Municipal Utility District (source) Sierra Club ASSEMBLY FLOOR : AYES: Ammiano, Arambula, Bass, Beall, Blakeslee, Block, Blumenfield, Bradford, Brownley, Buchanan, Caballero, Charles Calderon, Carter, Chesbro, Coto, Davis, De La Torre, De Leon, Eng, Evans, Feuer, Fong, Fuentes, Furutani, Galgiani, Hall, Hayashi, Hernandez, Hill, Huber, Huffman, Jones, Bonnie Lowenthal, Ma, Mendoza, Nava, Niello, V. Manuel Perez, Portantino, Ruskin, Salas, Saldana, Skinner, Solorio, Swanson, Torlakson, Torres, Torrico, Yamada, John A. Perez NOES: Adams, Anderson, Bill Berryhill, Conway, DeVore, Emmerson, Fletcher, Fuller, Gaines, Garrick, Gilmore, Hagman, Harkey, Jeffries, Knight, Logue, Miller, Nestande, Nielsen, Norby, Silva, Smyth, Tran, Villines NO VOTE RECORDED: Tom Berryhill, Cook, Lieu, Monning, Audra Strickland, Vacancy DLW:do 7/2/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****