California's Legislature yesterday approved the nation's largest program for shared renewable power, allowing renters, schools, cities and many others to invest in green energy projects.
The Assembly passed S.B. 43 from Sen. Lois Wolk (D), and the Senate subsequently signed off on amendments added by the lower chamber. The bill now is on its way to the governor.
The "Green Tariff Shared Renewables Program" will be open to customers of the state's three investor-owned utilities: Pacific Gas and Electric Co. (PG&E), San Diego Gas & Electric Co. (SDG&E) and Southern California Edison Co. (SCE). Businesses and people who buy shares in renewable developments will pay associated costs and reap any financial benefits through lower electric bills.
"S.B. 43 will allow the millions of Californians who cannot install their own solar unit, windmill, or other renewable power generation system to obtain renewable energy through their utility," Wolk said in a statement. "The bill will create thousands of jobs and encourage more investment in an important sector of our state's economy, while helping the state to meet its renewable energy goals."
The measure allows investments in up to 600 megawatts of renewable energy, the amount that would power about 100,000 American homes, according to the Vote Solar Initiative, an advocacy group. Of that total, at least 100 MW must be available to residential customers.
The California Public Utilities Commission (CPUC) will set up rules delineating which clean energy projects qualify for the program, and how costs and benefits will be applied to the generation portion of subscribing customer bills. Vote Solar estimated that more than 20,000 residential ratepayers would be able to participate, if each bought on average a 5-kilowatt share. In addition, schools, local governments, businesses and the military are eligible to invest, according to the legislation.
"We think it's a big deal and a game changer," said Susannah Churchill, California policy advocate at Vote Solar. "S.B. 43 is going to allow a lot of those folks to access renewable energy for the first time."
Bill changed from early version
The three utilities were neutral on the bill before its passage. Earlier, all three had opposed it, but each changed its position following amendments to the measure.
"We removed our opposition to S.B. 43 because it directs the CPUC to approve a program that protects nonparticipating customers from cost shifts," said Lynsey Paulo, PG&E spokeswoman. "In earlier versions of the bill, it failed to require participating customers to pay the administrative costs of the program, further shifting costs onto nonparticipating customers who don't want or possibly cannot afford higher bills."
The bill that passed the Assembly had been changed significantly from the one that passed the Senate. In the earlier version, the measure allowed people, businesses and schools to invest directly with renewable energy developers.
Some Assembly members objected, including Assemblyman Steven Bradford (D), chairman of the Committee on Utilities and Commerce. Bradford previously worked for Southern California Edison Co.
PG&E also objected to that provision.
"The original version of the bill did not have adequate consumer protections," Paulo said. "Under the current language, customers are not exposed to a complicated negotiation for power. Now they sign up and the power is delivered with CPUC oversight over every contract that's approved."
Under the version that passed, the utilities will contract with the renewable power developers and will manage electricity ratepayer participation in the green efforts. The bill requires that 100 MW of the eligible solar, wind and other projects be built in disadvantaged communities. That was added in the Assembly, along with language expanding the total project to 600 MW from 500 MW.
Several businesses and associations supported the measure, including Recurrent Energy, SunEdison, EDF Renewable Energy, the Solar Energy Industries Association, the Large-scale Solar Association, the Silicon Valley Leadership Group and the Los Angeles Business Council.
A starter green power program
Kathryn Phillips, director of Sierra Club California, said the changes in the Assembly shrank the shared green power program.
The measure now, she said, is "an incremental step forward to make sure that there are ways that people who otherwise don't have access to localized solar can get access, and can get credit for it, so that's good. It started out as a different bill that was much more aggressive, and then it became clear that it wouldn't get out [of the Assembly], so it became a smaller bill over time. But it's still a valuable bill."
"The utilities are very resistant to having independent entities provide power," Phillips said. "It's a big lift to get even incremental change. It was a big lift to get this bill the way it is."
Churchill with Vote Solar said it's important to launch the program, and that it can be expanded later. "When you are setting up a new model and creating a new way for customers to access renewable energy, it makes sense to demonstrate that the model works," Churchill said.
Vote Solar will be asking the CPUC to allow people investing in shared renewable projects to be able to choose which development they want to support. They might want to buy part of a solar array on a school, Churchill said, rather than simply buy into the utility's total green portfolio.
Both SDG&E and PG&E separately have proposed shared renewable programs. The CPUC has put off making a decision on those until the end of the legislative session. At that point, it's expected to review the cases in light of the potential new law.
A person familiar with the politics, who asked not to be identified to speak freely, said utilities have a reason to want enactment of a shared renewable power bill. Power companies are concerned about community choice aggregation, the person said, where a city decides to bid out its electricity demand to the provider that offers the best deal. Marin, Calif., took that step when it created the nonprofit Marin Energy Authority.
"They see this as a way to keep their customers happy and decrease the impetus for more community choice aggregation measures to pass," the person said.
The energy developed under the shared program will not be considered part of the state's renewable power mandate, which says utilities must generate 33 percent of electricity from green sources by 2020.