BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 585|
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THIRD READING
Bill No: SB 585
Author: Kehoe (D)
Amended: 5/31/11
Vote: 27 - Urgency
SENATE ENERGY, UTIL. & COMM. COMMITTEE : 10-1, 4/05/11
AYES: Padilla, Fuller, Berryhill, Corbett, De Le�n,
DeSaulnier, Pavley, Rubio, Simitian, Strickland
NOES: Wright
SENATE APPROPRIATIONS COMMITTEE : 6-2, 5/26/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Runner
NO VOTE RECORDED: Emmerson
SUBJECT : Energy: solar energy systems: funding
SOURCE : California Solar Energy Industry Association
Solar Alliance
DIGEST : This bill requires the Public Utilities
Commission (PUC) to utilize accrued interest from
California Solar Initiative (CSI) funds to meet the
incentive payments for non-residential installations and to
increase collections from electric ratepayers of the
state's 3 largest electrical corporations for any remaining
shortfalls in funding. Requires the discount rate to be
set at 4 percent, unless the commission determines the rate
should be reduced. Defines "discount rate" as a financial
mechanism that provides a given amount of interest as an
CONTINUED
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offset to the loss of the time value of money on solar
projects that receive performance-based incentives.
ANALYSIS :
Existing law
1.Establishes the CSI, a $3.3 billion program which
provides incentives for the installation of solar
photovoltaic (PV) systems for customers of the state's
investor-owned utilities (IOUs) and publicly owned
utilities (POUs).
2.Requires the PUC, in implementing the CSI, to adopt
incentive payments that decline not less than an average
of 7% per year which shall be zero as of December 31,
2016 and to adopt performance-based incentives (e.g.
payments based on the amount of electricity produced) all
PV systems over 100 kilowatts (kW) and for half of all
systems over 30 kW.
Background
California Solar Initiative (CSI)
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:
1.IOUs - $2.167 million/1940 MW for existing residential
homes, as well as existing and new commercial,
industrial, government, non-profit, and agricultural
properties;
2.New Solar Homes Partnership, $400 million/360 MW,
administered by the California Energy Commission and
funded by the Public Goods Charge for new residential
homes; and
3.POUs $784 million/700 MW.
In July 2010, the PUC reported that "three years into the
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state's 10-year solar program, California is already 42
percent of the way towards its general market program goal
in the territories of the IOUs. This figure included both
projects already installed and those holding reservations
for incentives and in the process of being installed. As of
last summer, California had over 600 MW of solar connected
to the electric grid at nearly 65,000 customer sites. Of
the 598 MW of capacity installed in investor-owned utility
territories, 342 MW were installed under the CSI Program at
31,000 sites, as well as 256 MW installed through other
programs."
Comments
According to the author's office, funding for
non-residential incentives in the CSI's 10-tier'd,
performance based declining incentive program, is exhausted
in two IOU service territories - PG&E & SDG&E. At the
eighth tier incentives make up about 5% of the total costs
for non-residential solar installation. SB 585 is needed
to ensure that the goals of the program are met and seeks
to provide a means to identify additional funding for that
purpose.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
Program oversight
Absorbable within existing resources
Special*
Increased electricity costs
$2,400 over the next several years
Various
to state agencies
Incentive payments to state Unknown revenues
Various
agencies
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* Public Utilities Commission Utilities Reimbursement
Account.
SUPPORT : (Verified 5/26/11)
California Solar Energy Industry Association (co-source)
Solar Alliance (co-source)
AEE Solar, Inc.
CA Public Utilities Commission
Clean Water Action
Clovis Unified School District
Coalition for Adequate School Housing
Fowler Unified School District
Kings Canyon Unified School District
KyotoUSA
Mainstream Energy Corp.
REC Solar, Inc.
San Diego Gas and Electric (if amended)
School Innovations & Advocacy
Sharp Solar Electricity
Silicon Valley Leadership Group
SolarCity
Solaria Corporation
SPG Solar Inc.
TerraVerde Renewable Partners
The Vote Solar Initiative
OPPOSITION : (Verified 5/26/11)
Southern California Edison (unless amended)
The Utility Reform Network (unless amended)
ARGUMENTS IN SUPPORT : The Silicon Valley Leadership
Group would like to offer support for SB 585. The
California Solar Initiative has funded nearly 80,000 solar
projects making California the leading state for solar
installations across the country. CSI has led to
employment, business growth, and has helped to reduce the
cost of solar energy systems from $10/W in 2007 to $8.56/W
in December 2010 for systems under 10kW. Addressing the
shortfall in funding for private and public sector projects
will help to continue the success of this program. The
Public Utilities Commission states this bill allows the PUC
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to fully fund the CSI program's budget shortfall. The CSI
program is very popular, and is helping to create a strong
solar industry in California. The CSI program is a key
component in the State's ability to achieve reduced
greenhouse gas emissions through the use of clean,
distributed technology. The proposed bill is a reasonable
effort to increase funding for this worthwhile effort. The
bill will allow the State's ratepayers to reap the benefits
of the most cost-effective phase of the program where they
will stimulate the most MWs of solar installations for the
least incentive payment. The Clean Water Action states SB
585 is critical to the growth of renewable energy in
California. In light of the pending commitment to achieve
a 30% renewable portfolio, passage of SB 585 will be
critical to help meet that requirement. This is the time
to further diversify the sources and location of energy in
order to build a safe and sustainable system. California
must reduce dependence on energy sources that threaten
oceans with oil spills, require enormous amounts of water
for cooling or put our citizens at risk of radiation
exposure.
RM:rm 5/31/2011 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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