PG&E Solar Affiliate Deal Challenged

By Published On: January 7, 2011

San Francisco and Californians for Renewable Energy protested a Pacific Gas & Electric Corp. proposal to have its subsidiary invest $120 million in a utility-affiliate venture with Solar City, which installs and leases small photovoltaic systems. The City and County of San Francisco called the utility’s proposal a “direct conflict of interest,” in a Dec. 13 filing with the California Public Utilities Commission. The utility is seeking approval of its plan through the Advice Letter process, as required by the Affiliate Transaction Rules (Current, Dec. 10, 2010). San Francisco noted that PG&E administers part of the California Solar Initiative (CSI) rebate program to the tune of $800 million. “Administering the CSI in a manner that places corporate interests above those of the ratepayers would constitute an unjust and unreasonable use of ratepayer funds,” it warned. In late November, PG&E sought regulators’ approval to allow a new corporate subsidiary to invest shareholder funds in 23 MW of residential and commercial solar energy installations in and outside the utility’s service territory through 2011 to reap federal tax credits and other tax benefits. A utility affiliate involved with the solar installer and contractor would reap part of the customer payments for the generated solar power. In January 2010, PG&E Corp. tried to invest $60 million in a home and small business solar outfit to reap tax credits. Six months later, the CPUC energy division director did not approve the advice letter. In late December and on Jan. 6, PG&E amended its advice letters related to the residential solar deals. The amended filings are said to supersede previous filings. PG&E wrote, it “provides training to targeted groups affected by particular rules. The annual audits performed by the independent auditors through 2006 have confirmed that PG&E’s procedures have been effective” in assuring compliance with the Affiliate Transaction Rules. “It resets the clock on our protest,” said Austin Yang, San Francisco deputy attorney. He said San Francisco will file an amended protest within the next several days.

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