By Paul Kruze
September 5, 2013 (San Diego)-- A small but passionate group of local environmentalists and workers for Sullivan Solar Power, a local solar panel installation company, gathered in front of Sempra Energy’s downtown corporate offices on August 28 to protest the energy conglomerate’s backing of California Assembly Bill 327. Opponents here and at protests elsewhere in California said the bill would irreparably gut incentives for energy conservation and rooftop solar development.
Introduced by Assemblyman Henry T. Perea (D-Fresno), the proposed bill was approved by the California Senate Energy Committee late last week, with major amendments. If passed by the Legislature and signed by the Governor, it would replace what utilities and other supporters say are outdated restrictions on how electrical rates are decided and approved.
Those rules were established in 2000 after the debacle which took place when a deregulated energy market resulted in skyrocketing prices, artificial energy shortages and rolling blackouts throughout Southern California.
Perea’s bill would revamp the pricing structure and give greater authority to the California Public Utilities Commission to set rates. Backers of the bill say that laws meant to protect residential rate users are now preventing the CPUC from governing the rate structure and making necessary changes for the thousands of middle to low income families struggling to pay high energy costs. The bill would also impose a ten dollar surcharge on all California electric utility ratepayers in order to have the fiscal resources to maintain California’s power grid.
On the other hand, opponents of the bill say that California’s current rate structure strongly encourages conservation so consumers who use the least amount of energy pay the lowest rates, and those who use more energy pay progressively higher rates. Consumer and environmental groups are concerned changes could undermine for energy conservation and rooftop solar deployment.
According to Arturo Camona, executive director of Presente.org, “AB 327, which was basically written by lobbyists for Big Energy, seeks to lower the amoung high-end users pay for kilowatt electricity by increasing the amount the majority of us pay,” an editorial in Latino Voices stated. Two-thirds of solar installations now occur in low and middle income neighborhoods, saving consumers money, he adds.
An analysis conducted for the Sierra Club found that rate proposals from the state’s biggest utility corporations allowable under AB 327 could sharply undercut cost-competitiveness of residential rooftop PV systems against electricity supplied by the grid Sierra Club’s study found these rate changes could ad $2.50 per watt to the cost of rooftop PV solar==a 30% cost hike that would negate the 30% federal investment tax credit for solar systems.
A controversial part of the bill would affect electric consumer “net metering.”With net metering a renewable energy system owner receives retail credit for at least a portion of the electricity they generate.
Daniel Sullivan, founder of Sullivan Solar Power, a major San Diego installer of solar panels ,says the bill after it was “marked up” by the Senate Energy Committee has been changed dramatically.
“By the time the bill reached the Senate, they essentially changed the intent of the bill. Hopefully they’ll take another look at what this bill really does and make changes so it won’t be a detriment to encouraging more and more consumers turning to alternative energy generation.”
As amended, the bill would extend net metering that was set to expire next year , change how caps for net metering are calculated, and lay the groundwork for a new net metering program over the next decade.
The amendments have made the bill less objectionable to some solar advocates. But an article published September 5 in GreenTechMedia.com suggests a “poison pill” that could allow utilities to end some existing net metering contracts in the future. New language also allows the California Public Utilities Commission to retroactively change terms of contracts signed.
“That’s going to send major chills through the market, and the finance market in particular,” said Bernadette Chiarro, executive director of the California Solar Energy Industries Association.