This week, legislation allowing large energy consumers to tap into subsidies for alternative power projects up to 10 MW passed unanimously. Until this legislation, larger systems built on-site were not eligible for subsidies. On May 19, the Assembly, on a 71-0 vote, approved AB 864 by Assemblymember Jared Huffman (D-San Rafael). The bill now goes to the Senate. The bill allows wind, solar, fuel cell, and other large non-fossil units built at industrial sites to reap the incentive. The 50 percent subsidy under the Self Generation Incentive Program can cover no more than 5 MW of a system up to 10 MW. For instance, if a cement factory builds an on-site 7 MW alternative energy project, only 5 MW of the system could be eligible for the California Public Utilities Commission incentive. “Californians get cleaner air, California manufacturers get cheaper electric bills, and we spur creation of construction and operation jobs at a time when we most need it,” Huffman stated. In other capitol news, Democratic lawmakers questioned the decreasing effectiveness of investor-owned utilities’ energy efficiency programs during a May 17 Senate Energy, Utilities, & Communications Committee hearing. California energy policy makers have made energy efficiency the state’s top priority, noted committee chair Senator Alex Padilla (D-San Fernando Valley), believing that efficiency can avoid the need to build expensive new power plants. “Based on this promise, Californians have paid billions of dollars on energy efficiency,” Padilla said. He raised questions about what energy efficiency programs have achieved and whether public goods charges on utility bills should continue to help fund them. The hearing came as the Legislature considers a number of bills to extend public goods charge programs--instead of sweeping the money into the general fund. The programs include renewable subsidies, research, and energy efficiency. The charge raises about $230 million a year for energy efficiency programs, according to a Legislative committee analysis. Under the programs as operated, investor-owned utilities spend about $1 billion a year on energy efficiency, including both the public goods charge and other money collected from ratepayers. California Public Utilities Commission demand-side programs manager Jeanne Clinton said that as long at the energy efficiency programs save money--even if it’s less than when they began--they are worthwhile. She added they still are cost-effective. Clinton also pointed out that the benchmark for judging savings is the extent to which energy efficiency displaces the need for power generated by gas-fired combined cycle power plants. She added that the CPUC may revise its cost-effectiveness test for energy efficiency programs in the future to account for a basket of power sources that include higher-priced renewable energy. This would have the effect of making higher-priced energy efficiency measures economical, which now are potentially barred from utility programs under the current cost-effectiveness test. Senator Rod Wright (D-Inglewood) criticized past reliance on compact fluorescent light bulbs, which he said are full of poisonous mercury vapor and do not last as long as promised. Clinton acknowledged the concerns and responded that the CPUC has told utilities to phase out CFLs in their programs.
