Solar legislation would impact large users’ energy bills

By CMTA Staff

Capitol Update, Aug. 19, 2005 Share this on FacebookTweet thisEmail this to a friend

SB 1 (Kevin Murray, D-Los Angeles), the Schwarzenegger Administration’s "Million Solar Roofs Initiative," could prove very costly for large energy users.

Under the bill, the costs of the program would be allocated to customers on a cents per kilowatt hour basis.  Given that it is a usage-based charge, it subjects large energy users to much greater costs than smaller users.

CMTA, which has an "oppose unless amended" position on the bill, has proposed a different cost allocation methodology – one that would allocate SB 1 costs based on overall demand profiles and peak usage, and spread the program cost among customer classes based on each customer class's contribution to peak demand.  It would have the effect of avoiding significant additional costs on the industrial class, who already pay exorbitantly high rates.

For example, under a cents per kilowatt hour allocation, a residential customers of Southern California Edison would pay a modest $0.68 per month to fund the program, while a transmission-level customer (TOU-8-SUB) with average usage would pay an additional $3,196 per month.  If the CMTA-proposed allocation method is used, residential customers would pay $0.80 per month and transmission-level customers would pay $237.51.  The rate impact would be similar for PG&E customers.

Manufacturers in California now pay nearly twice as much as their counterparts in other western states.  They 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.  Given that SB 1 is aimed at addressing peak demand, the customers who drive peak demand should pay their fair share of program costs.  CMTA’s proposed cost allocation methodology would accomplish just that.

The bill will be heard next Thursday, August 25, in the Assembly Appropriations Committee.  If approved there, it will be voted on by the full Assembly and then back to the Senate for a final vote.
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