JUICE: Distributed Generation Offers State Dollars

By Published On: June 3, 2011

With California suffering from a serious budget deficit, coupled with a sluggish economic recovery, the possibility of developing renewable energy generation on state properties and leasing it out sounds like a true win-win situation. Under an idea that’s still in development, you might be able to look up at any number of state-owned buildings in a few years and see solar panels collecting energy, or gaze across vacant state-owned land and see more renewable generation than ever before. An April report by the California Energy Commission on developing renewable generation on state property explained that such development would help meet two goals: raising the state’s renewable energy portfolio and increasing revenue. “In this time of fiscal austerity, the financial benefits of deploying (distributed generation) on state property are especially attractive,” according to the paper. “DG installations can create new revenue streams for the state through land lease arrangements with developers and/or can reduce state energy and other costs.” As of right now, there are about 907 MW of renewable self-generation capacity installed in California, according to the state. Gov. Jerry Brown’s “Clean Energy Jobs Plan” sets a goal of 12,000 MW of localized electricity generation by 2020. Although the twofold goal of expanding existing renewables in the state in a way that also increases income sounds like a no-brainer, there are still thorny issues to be worked out. For instance, there’s the question of territorial encroachment--can the state and municipal power agencies get along? Distributed generation project developers that would build a project connecting to a part of the transmission system controlled by the California Independent System Operator and sell the energy to another party have to file an interconnection request with the Federal Energy Regulatory Commission. Municipal utilities, such as the Los Angeles Department of Water & Power and Sacramento Municipal Utility District, could possibly resist distributed generation being leased out in their service territories by the state. “The commission did not get that specific, but we aren’t excluding any options and are open to exploring various partnership options,” CEC spokesperson Adam Gottlieb said regarding whether or not municipal-owned utilities could possibly control some of the sites. And then there are costs: the CEC says the aim is to install renewables on state properties at no net increase in cost to the state, a goal that may be reachable since the state wouldn’t have to pay maintenance costs for land it leases for renewable development. But it’ll still cost money to identify sites to participate in the program and assess their feasibility. There’s also the issue of whether some state properties have legal restrictions that limit what non-state projects can be undertaken on them. The CEC thinks that adding 2,500 MW of renewables on state property by 2020 is doable. Gottlieb says no estimates have been completed regarding how much revenue could be raised through the effort, but a state inventory preliminarily identified 2.5 million square feet of useable rooftop space and 3.9 million square feet of parking lot space in a total of seven counties--mostly Sacramento, Los Angeles and San Francisco-- available for renewable energy development. Other, separate surveys of state-owned prisons, mental health facilities and remote, vacant land, found that there could be a combined 237 MW potential additional capacity. “It’s not only solar--any renewable technology that is RPS [renewable portfolio standard] eligible is feasible,” Gottlieb said. By the end of June, the Department of General Services is expected to issue a request for proposals to develop renewables on state buildings believed to offer the best opportunities for renewable distributed generation development. Then, by the end of the year, the DGS, CEC and other state agencies are expected to request proposals to develop renewables on other state-owned excess lands. And over the next couple of years, the state plans consider expanding the program to properties owned by local governments as well as federal land. Overall, the idea of placing renewable assets on state-owned facilities seems like a no-brainer. But as with any government plan, the idea is subject to the pitfalls of government red tape and bureaucracy. A large potential hurdle is that the largest portion of rooftop square footage that’s been deemed suitable for installations is in Sacramento, which is SMUD territory. The various agencies involved can learn to play nice and work cooperatively. This potential win-win scenario is close to perfect and would benefit the state greatly. It would be a shame for it to fall victim to government snafus.

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