CPUC Hearings on Million Solar Vet Odds on Benefits

By Published On: May 23, 2005

Utility representatives argued against increasing distributed-generation because utilities will end up with reduced revenues, and subsidies might not make solar power cost-effective. The discussions were part of California Public Utilities Commission hearings held May 11-13 on the commission?s distributed-generation subsidy program for large customers?a program that could be used to promulgate the bipartisan Million Solar Roofs legislation. The Million Solar Roofs plan, now embodied in SB 1, aims to create 3,000 MW of new photovoltaic generation. Solar proponents assert boosting production of photovoltaic and other solar systems will increase efficiencies and bring costs down over time. Underlying opposing parties? cross-examination is the fundamental question of whether solar subsidies, which are likely to transfer the burden of payment for existing utility infrastructure to non-solar users, are worth the societal benefit of adding a significant amount of nonpolluting green power to the state?s future energy supplies. Participants agree that any cost-benefit calculations are merely guesses. The commission proceeding could be used to adopt values for societal benefits other than costs. ?There will be a reduction in revenues,? said David Rubin, Pacific Gas & Electric director of service analysis. In addition to the lack of income from the power itself, Rubin said that when a solar unit creates more energy than the customer uses?essentially spinning the meter backward?it ?erases? that customer?s contribution to the utility?s transmission and distribution charge. Rubin did allow that the commission should consider the possibility that the solar plan could ?transform? the market. That transformation, according to solar advocates such as attorney Mike Day, representing PV Now, could decrease the price of solar generation, making it cost-effective within a decade while providing less pollution and more local reliability. The total cost of the Million Solar plan remains uncertain. During legislative discussions on the plan last month, the operating assumption was a cost of $2.5 billion. In the CPUC hearings, a PG&E lawyer introduced a cost assumption of $7.7 billion. PG&E attorney Randy Litteneker questioned solar advocates about how many billions of dollars in subsidies they expect are needed to make photovoltaic prices competitive. There remains neither hard numbers for the amount of investment needed to attain a million solar rooftops in the state, nor any methodology to ascertain societal benefits of less pollution, more diverse supplies, and the potential for increased grid reliability through decreased reliance on transmission from central-station power plants. Tom Beach, a consultant for the California Solar Energy Industries Association, said the commission should use the results of a study done for this hearing, called the Itron report, to identify the ?admittedly difficult to quantify? benefits. ?What I do want to see is that we really create a value proposition for our ratepayers?that if they are going to be investing money through incentive payments now, there really be proven market effects,? added Rubin.

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