It’s the Capitol: Community Choice Bill Faces Opposition

After extensive debate over the course of two Senate Energy, Utilities, & Communications Committee hearings this week and last, legislation passed to strengthen the ability of cities to provide their residents retail electricity and control the costs. SB 790 by Senator Mark Leno (D-San Francisco) seeks to protect cities that pursue community choice aggregation (CCA) programs enabled in 2001 under AB 117. Leno’s measure attempts to limit what community choice customers have to pay their old utility for their stranded costs. “We are trying to be respectful of costs to bundled investor-owned utility customers and not overburden a burgeoning CCA,” said Leno. “We are ready to pay our share but only to extent of the shared benefit,” added Barbara Hale, San Francisco Public Utilities Commission assistant general manager. In addition to cities, SB 790 also allows special districts with experience in generation to become retail energy aggregators. It also allows CCAs to apply for intervenor compensation from the California Public Utilities Commission. Today only one entity offers a community choice aggregation program--the Marin Energy Authority. It’s faced opposition from the incumbent utility, Pacific Gas & Electric. San Francisco hopes to offer its residents retail energy services. The May 3 Senate hearing focused on legacy costs. That includes funds investor-owned utilities use to procure power after some customers leave to join a community aggregator, as well as private utilities’ costs of meeting the mandated 115 percent resource adequacy and public goods charges. Utilities and lawmakers argue that private utility ratepayers should be protected from bearing those costs the utility associates with departed customers. Opposing Leno’s measure were the California Coalition of Utility Employees and San Diego Gas & Electric. The legislation was supported by ratepayer advocates and environmentalists. SB 790 passed on a 6 to 4 vote after Leno agreed to amend it and have the committee rehear the matter. The committee passed several other bills addressing renewable costs and programs, including ones reauthorizing the California Energy Commission’s ratepayer-funded efficiency and alternative energy programs. SB 836 by Senator Alex Padilla (D-Van Nuys) requires the CPUC to report to the Legislature the tallied costs of approved private utility renewable energy contracts. “This is a huge assist on better information on the true cost of the contacts,” said Padilla. By next January, the CPUC is to report on the costs of wind, solar, and other alternative energy deals approved by state regulators since 2003 under the state’s current 20 percent renewable mandate. New contracts subsequently approved to meet the 33 percent alternative energy requirement from legislation passed this year are to be reported annually. The bill, approved on a 10-0 vote, was supported by small and large energy consumers. Another measure by Padilla, SB 879, creates a one-way account for CPUC-authorized utility costs for natural gas infrastructure maintenance, upgrades, and replacements. The legislation, approved on a 10-0 vote, is in response to the Sept. 9, 2010, San Bruno gas pipeline accident and revelations that regulatory funds approved for the blown line and other pipelines were not spent by Pacific Gas & Electric as proposed. Another bill, SB 771 by Senator Christine Kehoe (D-San Diego), adds landfill gas turbines and digester gas and micro turbines to the list of low emission technology eligible for bond funding from the California Alternative Energy and Advanced Transportation Financing Authority. Improvements in landfill gas turbines that keep methane from being released into the air won the support of clean air advocates. “It is a new set of ideas coming together,” said V. John White, Center for Energy Efficiency and Renewable Technologies executive director. It passed 10-0 and is to be heard by the Senate Environmental Quality Committee. SB 410 by Senator Rod Wright (D-Los Angeles) extends to 2022 the life of the ratepayer-funded public goods charges supporting alternative energy research and development. The public goods money directed to the Energy Commission since the deregulation era was the subject of three recent hearings where the effectiveness of the programs was questioned. “The definition of ratepayer benefits has been loosey goosey,” Wright noted. The bill seeks to tie the public goods programs back to “those things that benefit ratepayers--makes service more effective, reliable or less expensive,” according to the bill’s author. SB 410 passed 7-3, and went to the Appropriations Committee. SB 35 by Padilla also attempts to improve the Energy Commission’s public goods program. It creates a council that decides how the commission’s alternative energy research and development funds are invested. The bill, a work in progress, does not reauthorize the public goods program that expires at the end of this year. It passed 10-0 and goes to the Appropriations Committee. Another bill directed at the Energy Commission, SB 343, seeks an unspecified amount of Commission energy efficiency funding for commercial building retrofits to cut avoidable energy uses. Senator Kevin De Leon’s (D-Los Angeles) legislation “seeks to reduce dependency on dirty fuels,” he said. The nine billion square feet of commercial buildings in the state consume 35 percent of the electricity used in the state, said De Leon. Senator Fran Pavley (D-Santa Monica) insisted the evolving bill include standards for funding eligibility criteria. Senator Joe Simitian’s (D-Palo Alto) SB 23 extends by one year--to July 2012--the date the Energy Commission must develop 33 percent renewable regulations for public power agencies. SB 23, passed 10-0, also gives the CPUC an additional year to develop resource adequacy rules for wind and solar resources. In further action, two bills were essentially gutted by the committee. SB 383 by Senator Lois Wolk (D-Vacaville) sought to allow Davis’ residents to buy into a city solar project, currently known as PVUSA. The facility was a large photovoltaic testing project initially owned by PG&E. It was handed over to the Energy Commission then sold to Davis for $1 in early 2000. The city has been credited for the energy sent to the grid. The city wants to expand the photovoltaic site on the city outskirts and allow residents unable to put solar on their roofs to buy into the system. Their share of output would have offset their power bills. The bill passed on an 8-2 vote but was stripped down to intent-only language this week. Legislation that attempted to eliminate the cap on a program that provides discount energy rates for struggling ratepayers was turned into a two-year bill. Senator Michael Rubio’s (D-Fresno) SB 142 would remove the current income eligibility cap of 200 percent of the federal poverty level. The bill was opposed by consumer advocates who worked out a deal with Kern County on rate impacts when electricity use soars on hot summer days. In Kern, 44 percent of ratepayers are under the California Alternate Rates for Energy assistance program.

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It’s the Capitol: Community Choice Bill Faces Opposition

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