BILL ANALYSIS Ó 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 217 - Bradford Hearing Date:
July 2, 2013 A
As Amended: June 25, 2013 FISCAL B
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DESCRIPTION
Current law establishes the California Solar Initiative (CSI)
including authorizing monetary incentives funded through
electric rates for solar energy systems. The incentives are set
to expire at the end of 2016. Current law mandates that not less
than 10% of the total CSI funding be directed toward the
installation of solar energy systems on low-income residential
housing. (PUC §§2581-2582)
This bill authorizes the low-income programs of the CSI beyond
the 2016 expiration, extending them to 2021. The CPUC is
authorized to use unspent funds from the CSI program after 2016
and additional funding raised through electric rates. The CPUC
will cap the combined value of the CSI remaining funds and the
supplemental rate funds at $108 million.
This bill also requires the CPUC to ensure that the CSI program
is cost-effective in peak electricity generation capacity,
eligible recipients of incentives enroll in Energy Savings
Assistance Program, and job training and employment
opportunities are made available in the solar energy and energy
efficiency sectors.
BACKGROUND
The California Solar Initiative - The CSI was established in
2007 to fund multiple programs to increase customer use of solar
power throughout California, including through the
investor-owned utilities (IOUs), the publicly-owned utilities
(POUs), and through the New Solar Homes Partnership. The IOUs
were approved for 10 years of funding with a $2.167 billion
budget overall and a goal of installing 1,940 MW of new solar
generation capacity through a general market program, the CSI
thermal program, or the Single-family Affordable Solar Home
(SASH) and Multi-family Affordable Solar Housing (MASH)
programs.
The SASH and MASH programs were originally established by the
CPUC with a total budget of $217 million, and subsidize solar
photovoltaic systems for low-income single- and multi-family
homes, respectively.<1> The CPUC adopted an incentive structure
that provides a fully-subsidized 1 kilowatt photovoltaic solar
energy system to "very-low income" households and a partial
subsidy for qualified "low-income" households. The goal is to
provide access to solar energy systems to decrease electricity
bills without increasing household expenses.
GRID Alternatives is a non-profit solar installer and manages
the SASH and MASH programs on behalf of the IOUs and the CPUC.
GRID Alternatives works with volunteers and workforce training
programs to install solar generation systems and simultaneously
educate students. Over 60 community job training programs
statewide have utilized SASH solar installations for hands on
training experience. GRID Alternatives reports that combined,
the SASH/MASH programs have served 2,765 single-family
households and 322 multi-site developments throughout California
and provided $125 million in incentives.
The CPUC reports that at the end of 2012 under the SASH program,
2,487 photovoltaic systems had been installed and
interconnected, 301 projects had been reserved, and 351
applications were under review. Over 26 megawatts of power
capacity have been or are reserved to be installed by the SASH
and MASH programs. GRID Alternatives conducts an energy audit
for every SASH applicant before installing solar photovoltaic
systems. Some participants enroll in the Energy Savings
Assistance Program, a utility-operated program that provides
no-cost weatherization services to low-income households.
Cost-effectiveness - The SASH and MASH programs are evaluated
every two years. The CPUC contracted Navigant Consulting to
perform this evaluation for the 2009-2010 years of the programs.
Navigant Consulting determined that the SASH program was
cost-effective from the perspective of the participants, but not
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<1> D.07-11-045 & D.08-10-036
from the societal, program administrator, ratepayer, or total
resource perspectives. The SASH and MASH programs should have an
additional review covering the 2011-2012 years, but this review
is not yet available.
COMMENTS
1. Author's Intent . The author proposes to extend the SASH
and MASH programs beyond their current sunset in order to
support low-income residents who have high energy demands.
By subsidizing their energy needs, the cost of electricity
for participants freeing up much needed family income for
other essentials. The author proposes to use remaining
funding from the CSI program after it expires in 2016 to
fund the continued SASH and MASH programs through 2021. In
addition to the leftover funds, the bill authorizes raising
funds from ratepayers and capping the combined total to
$108 million. The author argues that GRID Alternatives has
successfully implemented SASH and MASH by installing
rooftop solar energy systems for low-income residents, and
by providing students and at-risk youth with hands-on
workforce training. For these reasons, the author argues
the programs should be extended.
2. Renewables for All . Currently the CSI is funded by
ratepayers. Extending the SASH and MASH programs would also
mean extending the associated rate charges on customers if
the funds remaining from the CSI after 2016 are not
sufficient for the programs. Typically, programs funded by
ratepayers are subjected to cost-effectiveness tests in
order to demonstrate that they provide benefits to
non-participants. The analysis by Navigant Consulting found
that these programs were not cost-effective from the
ratepayers' standpoint.
The SASH and MASH programs are, in part, intended to
provide renewables access to those who cannot afford to
purchase or lease their own solar energy systems. However,
these programs were determined to not be cost-effective by
several tests, including for ratepayers. Cost-effectiveness
is a common standard for ratepayer funded programs. For
example, energy efficiency programs provide a return on
investment by reducing the demand for electricity over
time, and consequently the need to build more expensive
power plants.
The bill currently requires the CSI to be cost-effective,
but the language in §2852 is not the intention of the
author. The author argues the programs deserve continued
funding regardless of their cost-effectiveness from the
ratepayers' perspective, and intends to amend the bill to
strike the cost-effectiveness provision.
3. Cap & Trade Funding ? In the proposed cap-and-trade
investment plan, the California Air Resources Board
recognized the SASH and MASH programs as potential programs
for funding using the cap-and-trade revenue.<2> The goals
of the AB 32 include direct investment toward the most
disadvantaged communities and households, job creation by
promoting in-state greenhouse gas emissions reduction
projects, and lessen the impacts and effects of climate
change on the state's communities. Funding these programs
through cap-and-trade revenue would alleviate the burden on
ratepayers while still extending the program.
4. Technical amendments .
a. Move intent language from 2852(a) to an
un-codified section
b. This bill conflicts with the proposed
resources budget trailer bill. After its adoption this
bill should be amended to reflect those changes.
ASSEMBLY VOTES
Assembly Floor (54-23)
Assembly Appropriations Committee (12-5)
Assembly Utilities and Commerce Committee
(12-3)
POSITIONS
Sponsor:
GRID Alternatives
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<2> Cap-and-Trade Auction Proceeds Investment Plan: Fiscal Years
2013-14 through 2015-16, May 2013, California Air Resources
Board
Support:
American Solar Power
Avalon Gardens Community Organization
Bright Sky Solar Holdings, LLC
California Center for Sustainable Energy
Support: (Cont.)
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|Capital City Solar |NRG Energy |
|Central Valley Opportunity |OC Sunny |
|Center |Pinoleville Pomo Nation |
|Century Housing |Proteus Inc. |
|ChangeFire |ProVoltz Inc. |
|City of Beaumont |Rebuilding Together Oakland |
|City of Palmdale |Renewable Energy Education |
|City of Rancho Cucamonga |Solutions |
|City of Richmond |Robinson Rancheria of Pomo |
|Community Development Block |Indians |
|Grant |San Francisco Department of the |
| Division - City of |Environment |
|Inglewood |San Gabriel Valley Habitat for |
|Delta Solar Electric Inc. |Humanity |
|Division of Ratepayer Advocates |Save a Lot Solar |
|Enterprise Community Partners |Self-Help Enterprises |
|Environmental Defense Fund |Shasta-Tehama-Trinity Joint |
|Fresno County Economic |Community |
|Opportunities | College District |
| Commission |Sierra Club California |
|Friends and Neighbors Community |Solar Energy Exchange Inc. |
|Club |Solar Energy Industries |
|Garfield Elementary School |Association |
|GigaWatt |Solar Sonoma County |
|Green Education Inc. |SolarReserve |
|Habitat for Humanity of Orange |SOLEX |
|County Inc. |Strategic Energy Innovations |
|HelioPower Inc. |Sullivan Solar Power |
|Imani Energy, Inc |SUTECH School of Vocational and |
|In Solar |Technical |
|Kathleen J. DeRosa, Cathedral | Training |
|City Mayor |Venice Community Housing |
|La Jolla Band of LuiseDo |Venice YouthBuild |
|Indians |Verengo Inc. |
|Lifestyle Solar Inc. |Veterans Green Jobs |
|Los Angeles Conservation Corps. |Westside Baptist Church |
|Los Angeles Trade Technical |YouthPower Community Solutions |
|College |46 individuals from The Center |
|Marti Emerald, San Diego 9th |for Employment Training |
|District |260 individuals |
| Councilmember | |
|Mendocino Solar Service | |
|Metro United Methodist Urban | |
|Ministry | |
| | |
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Oppose:
None on file
Kyle Hiner
AB 217 Analysis
Hearing Date: July 2, 2013