Governorís Solar Bill Faces Tough Questioning

By CMTA Staff

Capitol Update, April 29, 2005 Share this on FacebookTweet thisEmail this to a friend

SB 1 (Kevin Murray, D-Los Angeles), the administration-sponsored "Million Solar Roofs Initiative," didn’t have any easy go of things at its first policy committee hearing on April 26th.

Members of the Senate Energy, Utilities and Communications Committee spent several hours going over the bill’s provisions and asking detailed and pointed questions.

The bill got through, but not without a commitment by the author to address many of the concerns expressed by committee members as it moves through the legislative process.

Committee Chair Martha Escutia (D-Whittier) expressed concern about the proposal’s cost effectiveness, impact on low-income ratepayers, and lack of a "mid-stream" review halfway through the proposed life span of the program.  Senator Debra Bowen (D-Marina del Rey) voiced skepticism about the wisdom of investing in solar resources when energy efficiency programs are much more cost-effective.

SB 1 would offer solar rebates for homes and businesses through 2016, for the installation of rooftop solar photovoltaic (PV) systems.  Home builders would be required to offer solar panels in any development with at least 50 homes.

CMTA has an "oppose unless amended" position on the bill.

CMTA supports the goal of ensuring that the state has a diverse portfolio of energy resources.  At the same time, all generation resources, including renewable and solar resources, must be developed and brought online in a cost-effective manner. 

CMTA appreciates SB 1’s requirement that any charge proposed to fund the programs adopted and implemented pursuant to the bill "be imposed on all customers, including those residential customers subject to the [130 percent of baseline] rate cap&ldots;"  (In 2001, the Legislature enacted AB 1X, which protects residential usage at or below 130 percent of baseline usage from most rate increases.  CMTA strongly opposed the ‘130 percent’ rate protection.)  This is an important, if limited, step toward a return to rational rates based on sound cost-causation principles.

CMTA is greatly concerned, however, about the bill’s lack of a cost-cap.  Program cost estimates vary between $1 and $10 billion, depending on the level of the subsidy and the size of the program.  CMTA’s concern about the costs associated with this program is not an abstract one.  Manufacturers in California now pay nearly twice as much as their counterparts in other western states.  CMTA members also pay a disproportionate share of peak power costs in California since they largely have flat loads and thus do not drive demand during peak periods.

CMTA would drop its opposition to the bill if it were amended to include: (1) a cap on program costs, with a legislative review of the program no later than January 1, 2012; (2) bill language to ensure cost-effectiveness, so that the most cost effective solar energy resources are used  in a manner that provides demonstrable benefits to ratepayers; (3) strict performance requirements, including a requirement that incentives be based on the actual measured performance of each system, by time of use, not design capacity; (4) provisions allowing solar applications other than PV to be eligible for the program, including solar thermal and central station applications (the goal of the program should be to promote the most productive and cost-effective application, not a particular technology; and (5) language prohibiting cost shifting due to net metering.

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