BILL ANALYSIS Ó
SB 793
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Date of Hearing: June 22, 2015
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Anthony Rendon, Chair
SB
793 (Wolk) - As Amended May 5, 2015
SENATE VOTE: 23-13
SUBJECT: Green Tariff Shared Renewables Program.
SUMMARY: Permits a participating customer to subscribe to a
Green Tariff Shared Renewables (GTSR) Program and receive a
reasonably estimated bill credit and bill charge, as determined
by the California Public Utilities Commission (CPUC), for a
period of up to 20 years. Specifically, this bill:
EXISTING LAW:
a)Requires participating Investor Owned Utilities (IOUs) to file
applications to establish a voluntary GTSR Program in their
service area. (Public Utilities Code Section 2831)
b)Requires the CPUC to issue a decision on the IOU's voluntary
GTSR Program applications by July 1, 2014. (Public Utilities
Code Section 2831)
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c)Specifies GTSR program criteria related maximum statewide
program size, size of qualified facilities, location of
facilities near customers, restrictions on market
concentration, inclusion of disadvantaged communities, a 20-MW
set aside within the GTSR program for the City of Davis, and
restrictions to ensure that the costs of the program are not
borne by non-participants. (Public Utilities Code Section
2833)
d)Sunsets the statute January 1, 2019. (Public Utilities Code
Section 2834)
FISCAL EFFECT: Unknown.
COMMENTS:
1)Author's Statement: "The CPUC issued a decision implementing
parts of SB 43 (Wolk, Chapter 413, Statutes of 2013) in
January 2015 that lays out the program design for the three
IOU's GTSR programs. Unfortunately, the CPUC rules currently
prevent customers from subscribing to their utility's GTSR
program for a term of more than one year, a limitation that
was not required nor contemplated in SB 43. Because the bill
credits and charges can fluctuate year to year, this one-year
maximum limitation prevents a customer from reasonably
predicting their rate associated with subscribing to GTSR
beyond the current year. This limitation is likely to
significantly reduce program uptake, especially for customers
who are considering making a long-term agreement with a
specific renewable energy developer within the Enhanced
Community Renewables portion of the GTSR programs."
"SB 793 would have no effect on the overall customer costs or
rates of the three IOUs in California. SB 43 requires that
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all costs of an IOU's green tariff shared renewables program
be covered by participants of the program and that no costs be
paid by ratepayers that are not participants of an IOU's green
tariff shared renewables program. However, SB 793 may lessen
the costs to participants that sign up for an IOU's green
tariff shared renewables program."
2)What's a Green Tariff Shared Renewable Program? While rooftop
solar is a strong and growing business in California, as much
as 75% of households cannot participate because they are
renters and don't own their roofs, they do not have strong
enough credit, or their roof is too small or doesn't receive
enough sunlight. The same is true of most businesses, 70% of
whom rent or lease their facilities. Despite their inability
to utilize renewable energy, these utility customers continue
to pay into solar and renewable programs that fail to benefit
them. Additionally, programs (MASH, SASH, Solar Share, etc.)
designed to benefit low-income or rental utility customers by
providing them the opportunity to utilize renewable energy
either have no room for new participants or fail to provide
consumers with access to affordable renewable energy.
A GTSR allows a utility customer to voluntarily subscribe to a
rate plan that provides renewable energy to that customer from
a local renewable energy facility. The customer pays the
costs for participating in this program, and other ratepayers
who are not participating in this program do not bear the cost
of the program.
3)Status of CPUC Proceeding . There is an ongoing proceeding to
implement SB 43 (A.12-01-008 et al). The CPUC rendered a
decision at the end of January 2015 to begin implementing SB
43. However, there are a host of other issues that remain to
be determined by the CPUC in a later phase of the proceeding.
The later phase is expected to begin in August or September
2015.
This bill would not delay the current proceeding at the CPUC.
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4)Need for this bill. According to the author, customers need
to be able to enroll in the GTSR program for more than one
year so that they can predict the billing rate associated with
subscribing to GTSR beyond the current year. Having
information that estimates bill credits and bill charges over
a longer period of time can help a customer decide whether to
enroll in this program.
The CPUC decision (D15-01-051<1>) on GTSR, the CPUC notes that
in this decision:
We have eliminated the requirement that an IOU require a
one-year enrollment minimum and early termination fee,
provided that the IOU can demonstrate that ratepayer
indifference can still be achieved. Longer terms and
locked-in rates are slated for Phase IV.
The decision goes on to state that:
The GTSR Program may require up to a one-year enrollment
term, with the option of continuing on a month-to-month
basis at the end of the year. (Ordering Paragraph 46).
Even though the CPUC has provided flexibility with respect to
the enrollment period, the other issue relates to pricing.
One stakeholder in the CPUC proceeding put it this way: "? in
order to offer participants fair compensation for the
long-term value of GTSR resources and pricing certainty for
the term of their participation, which, for ECR projects, is
--------------------------
<1>
http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M146/K250/146250314.PDF
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going to be much longer than one year if projects are to be
successfully developed.
The CPUC issued a ruling on April 15, 2015, which will, among
other things, consider options for customers to lock-in rates
and have long-term contracts. The CPUC estimates a decision by
November 2015.
The CPUC's decision must set the GTSR rates "in a manner that
ensures nonparticipant ratepayer indifference for the
remaining bundled service, direct access, and community choice
aggregation customers and ensures that no costs are shifted
from participating customers to nonparticipating ratepayers,"
as specified in Public Utilities Code Section 2833(q).
If SB 793 is enacted, the CPUC may need to consider directing
the IOUs to include a disclosure to customers that choose to
enroll for 20 years that the estimate of credits and charges
are not a guarantee to those credits and charges.
5)20-year commitment: Current IOU rate plans are one-year
commitments for customers and are terminated when a customer's
life circumstance causes them to move, even if it occurs
within the one-year commitment. As written, it is not clear
whether a 20-year enrollment in GTSR would result in a debt
obligation to the customer. This can impact whether or not a
customer can continue to participate in the program (the
duration of this commitment is a life-cycle generation -
Yuppies, Generation X, Millenials, etc.), during which much
can change in a person's life. For example, how would GTSR
address changes that prevent a customer from meeting a 20-year
enrollment commitment because of unexpected events (job
change, a significant change in family circumstances such as
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death or divorce, moving to another utility service area, or
change of residence). Commercial and government customers may
be in a better position to make a 20-year commitment as their
site ownership may not change as frequently as residential
site ownership.
The author may wish to consider clarifying this language:
(o) A participating utility shall permit a participating
customer to subscribe to the program and receive a reasonably
estimated be provided with a non-binding estimate of
reasonably anticipated bill credit credits and bill charge
charges, as determined by the commission, for a period of up
to 20 years.
6)Support and Opposition:
Supporters state that SB 793 would give greater flexibility
for customers and greater predictability for utilities,
customers, and renewable energy financing entities because
customers will receive a reasonably estimated bill credit and
bill charge for a period of up to 20 years.
Opponents state that there is no comparable rationale for
allowing customers to receive a fixed bill credit for a period
of two decades. They point out that the GTSR rate will adjust
to reflect the actual cost of generation used to serve
customers and is tied to actual market prices for electricity,
natural gas costs, and the costs of a changing mix of
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generation in the utility portfolio. They point out it is not
possible to realistically forecast these costs over a 20-year
time horizon for the purposes of fixed bill credits for the
entire period.
7)Related Legislation:
SB 43 (Chapter 413, Statutes of 2013): Established, until
January 1, 2019, a Shared Renewable Self Generation Program
allowing IOU customers to purchase an interest in a "community
renewable energy facility" and receive a bill credit for the
generation component of the customer's electrical service.
SB 843 (Wolk 2012): Would have established a new business
model that would allow developers of renewable projects to
sell electricity to customers of IOUs. Failed in Assembly
Utilities Committee.
SB 383 (Wolk 2012) was amended to deal with a different
subject in the Assembly
REGISTERED SUPPORT / OPPOSITION:
Support
Borrego Solar
California Environmental Justice Coalition
California Public Utilities Commission
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California Solar Energy Industries Association
Environmental Defense Fund
Sierra Club
Solar Energy Industries Association
Vote Solar
Opposition
TURN (unless amended)
Analysis Prepared by:Sue Kateley / U. & C. / (916)
319-2083