Another program proposed for ratepayers to fund

By CMTA Staff

Capitol Update, April 27, 2012 Share this on FacebookTweet thisEmail this to a friend

A bill to create a new target to achieve 375 megawatts of small scale renewables in environmental justice communities passed its first policy committee in the legislature last week.  AB 1990 (Paul Fong, D-Mountain View) requires electric ratepayers to fund the program.

The needs of all California communities would be better addressed through existing environmental and economic development programs.  The CPUC and stakeholders groups are not equipped to determine, through the mechanism of this bill, how best to “achieve the environmental justice benefits” broadly described in the bill as local green jobs, local hiring, local manufacturing, recycling, and local ownership of green businesses, as well as providing careers in the skilled construction trades.  The definition of “most impacted and disadvantaged communities” is unclear.  The CPUC will not be able to determine the location of these communities without extensive analysis and investigation, for which they do not have the expertise, time or resources.

AB 1990 would put upward pressure on rates by imposing a new target for procurement, requiring tariff rates to “stimulate the market for each type of electrical generation” and providing rate “adders” of up to 2 cents per Kwh to cover the costs of providing the environmental benefits described above.  To keep rates as low as possible, CMTA supports procurement of electric generation through current competitive processes that ensure reliable service at the lowest cost. Electric rates for California consumers are already some of the highest in the country, with more costs likely to come through the 33 percent renewable portfolio standard and the AB 32 cap-and-trade program.

There are many existing programs to encourage distributed generation, including the California Solar Initiative and the Self Generation Incentive Program, with the potential for more support through public goods charge funds.  All communities, including those targeted by this bill, are eligible to take advantage of them. But maximizing ratepayer benefits should be the main purpose of all programs funded by ratepayers, and AB 1990 does not meet that test.  CMTA opposes AB 1990.

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