Court Upholds Utility Renewable R&D Surcharge

By Published On: May 29, 2014

A California Court of Appeals decision fully backed the California Public Utilities Commission’s ratepayer-funded, green energy research and development program, known as the Electric Program Investment Charge. The May 28 ruling keeps hundreds of millions of dollars of clean energy project funding in place, avoiding a derailment. Mike Peevey, CPUC president, said he looks “forward to the many benefits that EPIC will bring to Californians.” The investment program “is designed to assist the development of non-commercialized new and emerging clean energy technologies in California, while providing assistance to commercially viable projects,” he added after the ruling’s release. The Second District Appellate Court found that under the California Constitution and state laws promoting renewable energy development and funding, the CPUC had both broad and specific authority to adopt and implement the funding program. “EPIC is a lawful exercise of the CPUC’s authority,” the court held. Southern California Edison challenged the legality of the charge, which replaced a similar clean energy funding program at the California Energy Commission. That initial program, which also included energy efficiency funding, was launched during deregulation. The Legislature did not reauthorize the Energy Commission’s Public Goods Program in 2011. State regulators stepped in 2012 to fill the void at the governor’s urging. Edison said it was “disappointed” by the ruling. “The issue was worth pursuing on behalf of its customers,” it added funding for the 2012-14 funding cycle was $517 million (Current, Nov. 11, 2013). Both the former and current programs are financed by utility bill surcharges. The CPUC authorized the Energy Commission to administer 80 percent of the funds. “EPIC funding is critical for incentivizing clean energy innovation, providing funding opportunities to turn new energy ideas into realities that provide ratepayer benefits and help the state achieve its energy goals in a cost-beneficial manner," said Bob Weisenmiller, California Energy Commission chair. The appellate court found Edison’s specific attacks lacked merit, holding the program “is cognate and germane to the [C]PUC’s inherent power to regulate and supervise utilities as the program governs the cost, safety and reliability of electricity services provided by the electricity utility corporations , and fixed rates.” The court also found no intent by the Legislature to repeal the California Public Utilities Commission’s authority to fund renewable research and development. Edison not only challenged the Commission’s authority to adopt the program, calling it an “unlawful tax,” but also its decision to have the Energy Commission administer 80 percent of the funds. Those arguments also were shot down by the court. Southern California Edison v. CPUC Consolidated Case Nos. B246782 and B246786.

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