PublicationNewspaper Article Proposed state fee would end solar savings (San Francisco Chronicle, November 1, 2015)

Published:
November 1, 2015
Author(s):
Publication Type:
Newspaper Article
Topics:
  • solar energy
Abstract:

Pro­posed state fee would end solar savings

 

by Jon Welling­hoff and Daniel Kammen

 

Photo: Rich Pedron­celli, Asso­ci­ated Press

A solar panel is installed in mid-​​October on the roof of the Governor’s Man­sion State His­toric Park in Sacramento.

 

Cal­i­for­nia con­sumers are embrac­ing rooftop solar with prac­ti­cal enthu­si­asm, bring­ing the state halfway toward its goal of a mil­lion solar rooftops by 2020. New rules pro­posed by a state agency, how­ever, would impose fees that would wipe out the sav­ings of solar, effec­tively end­ing cus­tomer choice for middle-​​class Cal­i­for­nia ratepayers.

 

Whether Cal­i­for­ni­ans con­tinue to have the choice to gen­er­ate some of their power from solar pan­els is now up to the Cal­i­for­nia Pub­lic Util­i­ties Com­mis­sion, which is expected to issue new rules in com­ing weeks. Sadly and pre­dictably, the state’s largest pri­vate util­i­ties have asked the com­mis­sion to end the state’s net energy meter­ing pol­icy because solar rooftops are deemed com­pe­ti­tion that threat­ens the century-​​old monop­oly util­ity busi­ness model.

 

What is sur­pris­ing to us, how­ever, is the pro­posal com­ing from the state’s Office of Ratepayer Advo­cates, the inde­pen­dent entity within the com­mis­sion that advo­cates on behalf of ratepay­ers. The office is advo­cat­ing monthly fees on new solar cus­tomers that are more extreme than those sought by the most anti-​​rooftop-​​solar utilities.

 

When I was the con­sumer advo­cate in Nevada prior to serv­ing as the Fed­eral Energy Reg­u­la­tory Com­mis­sion chair­man, I under­stood my role to include advo­cacy for the ratepay­ers of today as well as those of the future. I knew it was vital to update how we think about the role of util­i­ties and where we get our energy. My co-​​author, Daniel Kam­men, runs an intern­ship pro­gram with the Office of Ratepayer Advo­cates, where ana­lytic capac­ity exists to sup­port cutting-​​edge analy­sis of costs and ben­e­fits of rooftop solar. So far the office has failed to do so.

 

We know the proposal:

 

  • Would destroy a huge por­tion of poten­tial elec­tric bill sav­ings from installing solar. It would have the typ­i­cal res­i­den­tial solar cus­tomer pay addi­tional fixed charges of $50 to $70 each month — sim­ply for buy­ing less util­ity power by going solar. The charge, which depends on the size of the solar sys­tem, would esca­late over time from $2 per kilo­watt to $10 per kilowatt.

Ari­zona Pub­lic Ser­vice, the largest util­ity in Ari­zona and one noto­ri­ously hos­tile to rooftop solar, recently pro­posed increas­ing its ill-​​considered installed capac­ity fee from 70 cents per kilo­watt to $3 per kilo­watt — and then quickly with­drew the pro­posal in the face of pub­lic oppo­si­tion. It trou­bles us that California’s offi­cial ratepayer advo­cate appears to be tak­ing its cue from Ari­zona util­i­ties and then seek­ing anti­so­lar charges far beyond what those util­i­ties even dared to propose.

 

Cal­i­for­nia con­sumers are embrac­ing rooftop solar with prac­ti­cal enthu­si­asm, bring­ing the state halfway toward its goal of a mil­lion solar rooftops by 2020. New rules pro­posed by a state agency, how­ever, would impose fees that would wipe out the sav­ings of solar, effec­tively end­ing cus­tomer choice for middle-​​class Cal­i­for­nia ratepayers.

 

Whether Cal­i­for­ni­ans con­tinue to have the choice to gen­er­ate some of their power from solar pan­els is now up to the Cal­i­for­nia Pub­lic Util­i­ties Com­mis­sion, which is expected to issue new rules in com­ing weeks. Sadly and pre­dictably, the state’s largest pri­vate util­i­ties have asked the com­mis­sion to end the state’s net energy meter­ing pol­icy because solar rooftops are deemed com­pe­ti­tion that threat­ens the century-​​old monop­oly util­ity busi­ness model.

 

What is sur­pris­ing to us, how­ever, is the pro­posal com­ing from the state’s Office of Ratepayer Advo­cates, the inde­pen­dent entity within the com­mis­sion that advo­cates on behalf of ratepay­ers. The office is advo­cat­ing monthly fees on new solar cus­tomers that are more extreme than those sought by the most anti-​​rooftop-​​solar utilities.

 

When I was the con­sumer advo­cate in Nevada prior to serv­ing as the Fed­eral Energy Reg­u­la­tory Com­mis­sion chair­man, I under­stood my role to include advo­cacy for the ratepay­ers of today as well as those of the future. I knew it was vital to update how we think about the role of util­i­ties and where we get our energy. My co-​​author, Daniel Kam­men, runs an intern­ship pro­gram with the Office of Ratepayer Advo­cates, where ana­lytic capac­ity exists to sup­port cutting-​​edge analy­sis of costs and ben­e­fits of rooftop solar. So far the office has failed to do so.

 

We know the proposal:

  • Would destroy a huge por­tion of poten­tial elec­tric bill sav­ings from installing solar. It would have the typ­i­cal res­i­den­tial solar cus­tomer pay addi­tional fixed charges of $50 to $70 each month — sim­ply for buy­ing less util­ity power by going solar. The charge, which depends on the size of the solar sys­tem, would esca­late over time from $2 per kilo­watt to $10 per kilowatt.

 

Ari­zona Pub­lic Ser­vice, the largest util­ity in Ari­zona and one noto­ri­ously hos­tile to rooftop solar, recently pro­posed increas­ing its ill-​​considered installed capac­ity fee from 70 cents per kilo­watt to $3 per kilo­watt — and then quickly with­drew the pro­posal in the face of pub­lic oppo­si­tion. It trou­bles us that California’s offi­cial ratepayer advo­cate appears to be tak­ing its cue from Ari­zona util­i­ties and then seek­ing anti-​​solar charges far beyond what those util­i­ties even dared to propose.

 

  • Ignores the many ways rooftop solar pro­vides sav­ings for all ratepay­ers, whether or not they install solar.

 

For exam­ple, when rooftop solar pro­duces energy on hot sum­mer days, it alle­vi­ates the need to run (and util­i­ties to pur­chase power from) inef­fi­cient nat­ural gas “peaker” plants. Because the most expen­sive plant sets the price paid, the sav­ings to ratepay­ers from reduc­ing elec­tric­ity demand are sub­stan­tial. Nei­ther these sav­ings nor the direct finan­cial ben­e­fit of low­er­ing the expo­sure to volatile nat­ural gas prices was considered.

 

  • Would sti­fle the mar­ket for emerg­ing tech­nolo­gies. The Office of Ratepayer Advo­cates could be look­ing for ways to make the elec­tric grid more effi­cient and ben­e­fit ratepay­ers Cal­i­for­nia is the nation’s undis­puted leader in solar power and, given the state’s ambi­tious clean energy goals, our state reg­u­la­tors must be bold and forward-​​thinking. The Office of Ratepayer Advo­cates claims its pro­posal pro­motes solar, but it would restrict rooftop solar to only the wealthy — and deprive all Cal­i­for­nia ratepay­ers of more local jobs, cleaner air, reduced cli­mate impacts, a more resilient grid and other soci­etal benefits.

 

For more than 100 years, con­sumers have had no choice but to pur­chase their elec­tric­ity from the monop­oly util­ity. With­out com­pe­ti­tion, util­i­ties lack the full incen­tive to inno­vate and to reduce their costs and pass the sav­ings on to con­sumers. This leads to elec­tric rates that rise con­tin­u­ously. To pro­tect elec­tric ratepay­ers, the Office of Ratepayer Advo­cates and the Pub­lic Util­i­ties Com­mis­sion should sup­port inno­va­tion and healthy com­pe­ti­tion in the power indus­try that will result in cheaper, cleaner and safer elec­tric­ity for all ratepayers.

 

Jon Welling­hoff, a lawyer, is the for­mer chair­man of the Fed­eral Energy Reg­u­la­tory Com­mis­sion and Nevada’s first Advo­cate for Cus­tomers of Pub­lic Util­i­ties. Daniel Kam­men is a pro­fes­sor of energy in the Energy and Resources Group and in the Gold­man School of Pub­lic Pol­icy at UC Berke­ley. Twit­ter: @dan_kammen

 

To com­ment, sub­mit your let­ter to the edi­tor at www​.sfgate​.com/​s​u​b​m​i​s​s​i​ons.

 

Cal­i­for­nia solar

 

450,000

 

The num­ber of solar rooftops in Cal­i­for­nia, out of 650,000 installed nationwide

50 per­cent

 

The 2030 goal for the por­tion of the state’s energy port­fo­lio from solar, wind, bio­mass and geot­her­mal energy sources

 

$50 to $70 a month

 

The “installed capac­ity fee” the Office of Ratepay­ers Advo­cates pro­poses tack­ing onto solar cus­tomers’ elec­tric bill

 

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