BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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                                 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  
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          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  







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          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  







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          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

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