[Sustain] Fwd: Utilities beat back community solar bill in California

[Don Eichelberger]

Here's more of PG&E and cohorts doing what they do best- protecting 
their investors' pockets and killing an innovation for delivering 
decentralized power because it would make their power grid carry less 
photon gold.

I hope SF Community Power Authority will be able to incorporate the 
kinds of innovation in energy delivery this murdered legislation would 
have provided.

Don


-------- Original Message --------
Subject: 	Utilities beat back community solar bill in California
Date: 	Thu, 06 Sep 2012 12:33:29 -0700
From: 	Roger Herried <rogerh at energy-net.org>

	

Utilities beat back community solar bill in California 
<http://grist.org/climate-energy/utilities-beat-back-community-solar-bill-in-california/> 


By David Roberts <http://grist.org/author/david-roberts/>

One of the big pieces of a future that makes sense 
<http://grist.org/article/toward-a-future-that-makes-sense/> is an 
energy system that involves clean power, less waste, more intelligence, 
and a wider distribution of economic benefits. (Think locally owned 
solar panels hooked into a smart grid.) I lump all that under the term 
"distributed energy" and have been making fitful efforts to track some 
of the battles going on around it.

The latest episode is a sad one. Last year in California, state Sen. 
Lois Wolk (D) set out to tackle a pretty simple problem: Access to 
distributed energy (mostly rooftop solar panels) is restricted to those 
who can afford it and own a suitable roof. About 75 percent of 
Californians don't fall into that category --- they either rent, don't 
have the equity, or have a shaded or wrong-facing roof. That's a huge 
market to be tapped.

So she put forward Senate Bill 843 
<http://grist.org/news/how-to-put-solar-panels-on-your-roof-even-if-you-dont-have-a-roof/>, 
which would allow customers in the service territories of the state's 
three big investor-owned utilities --- Pacific Gas & Electric (PG&E), 
Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) 
--- to "subscribe" to distributed energy projects (20 megawatts or less) 
anywhere in their territories. So, for instance, a condo co-op could get 
together and invest in a solar project covering a nearby parking garage. 
Or a congregation could get together and invest in panels for the top of 
their church. They would sign a contract with a solar developer and pay 
a monthly fee (wrapped into their power bill) for a portion of the 
energy produced. Under the legislation, up to 2 gigawatts of power could 
be financed this way across the state; no state money would be required.

According to a report by Vote Solar 
<http://votesolar.org/wp-content/uploads/2012/06/SB-843-job-econ-impacts-report-6-6-12.pdf> 
[PDF], in the process of adding 2 GW of distributed renewable energy, 
the program would create 12,000 new jobs, $230 million in state sales 
tax revenue, and $7.5 billion of economic activity in the state. The 
bill was backed by a broad coalition that included businesses, schools, 
nonprofit groups, and the Department of Defense.

Sounds good, right? But it didn't sound good to the big quasi-monopoly 
utilities, PG&E and SCE (SDG&E supported the bill). Late last week, they 
led a last-minute flurry of lobbying and killed it 
<http://solarindustrymag.com/e107_plugins/content/content.php?content.11080>.

The murder took place in the Assembly Committee on Utilities and 
Commerce, under what sounds like some pretty shady circumstances. 
Apparently Wolk made a deal with committee chair to back a scaled-down 
version of the program, but once committee doors shut, the chair 
flip-flopped. Wolk was blunt: "PG&E and Southern California Edison 
control the committee ... the coalition of support behind this measure 
was simply no match for the high paid lobbyists and the campaign 
contributions of these monopoly corporations."

One of the utilities' objections (which are detailed in this op-ed 
<http://www.sacbee.com/2012/08/30/4770011/another-view-solar-bill-would.html> 
from PG&E) was that the bill would shift the cost of maintaining the 
electricity system to other customers. This is, um, bullsh*t. SB 843 was 
explicitly designed so that participating customers would still pay all 
their own transmission, distribution, and public-purpose charges. And 
regardless, one of the great benefits of distributed energy is that it 
/reduces/ those costs; you don't need new power lines when the power 
plant is on your roof.

The utilities' alleged concern over costs is touching, but somewhat 
ironic. PG&E is still paying out a $70 million settlement over its 
boneheaded San Bruno pipeline explosion 
<http://www.huffingtonpost.com/2012/04/23/pge-san-bruno-explosion-memo_n_1446670.html>. 
Guess where that money comes from? That's right, ratepayers. Oh, and 
PG&E also recently tried to bump up its guaranteed "return on equity" 
from 8.75 percent to 11 percent, which the Division of Ratepayer 
Advocates deemed "out of line with today's market and unfair to 
customers <http://www.dra.ca.gov/general.aspx?id=1860>." Guess where 
that extra annual $337 million in profits would have come from? Right 
again. As for SCE, its shareholders are currently banking $54 million a 
month in profits 
<http://articles.latimes.com/2012/aug/29/business/la-fi-hiltzik-20120829> for 
running the San Onofre nuclear plant, which, um, isn't running. Guess 
where that money is coming from? Yup.

So really, utility concern over ratepayer costs? Spare me.

I suspect the real objections were elsewhere. First, the 2 GW in 
distributed solar wouldn't have counted toward the utilities' 
obligations under California's aggressive renewable energy mandate, 
under which utilities have to get 33 percent of their energy from 
renewables by 2020.

Second and relatedly, the program would effectively have cut utilities 
out as middlemen. Customers would have been contracting directly with 
power providers. That is a threat to the entire utility model, which 
relies on tidy planning, captive ratepayers, and a publicly guaranteed 
rate of return. That model all but prohibits the kind of disruptive 
evolution the electricity system desperately needs, but it works quite 
well for utility shareholders and they will fight to the death to 
preserve it.

I don't know how the program would have played out had the bill passed. 
Maybe it really would have been a mishegas like the utilities warned. 
But these facts remain:

  * We need rapid evolution in the electricity sector.
  * Under the current regulatory regime, utilities are all but incapable
    of that kind of innovation.
  * The prospects of reforming that regulatory regime are dim.

Given all that, I don't see any alternative but to go /around/ 
utilities, to find ways for customers --- communities, businesses, civic 
groups --- to work directly with microgrid and distributed energy 
providers. We need some of that magic that comes from a competitive 
market and we'll never get it as long as utilities maintain their 
monopoly on power.

On that note: supporters of SB843 intend to redraft it and have another 
go at it in January. I'll keep you posted.

-- 
Roger Herried

Abalone Alliance Clearinghouse archivist
Energy Net <http://www.energy-net.org>



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