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STATE OF CALIFORNIA

Public Utilities Commission

San Francisco

M e m o r a n d u m

Date:

May 20, 2008

   

To:

The Commission

(Meeting of May 29, 2008)

     

From:

Pamela Loomis, Deputy Director

Office of Governmental Affairs (OGA) - Sacramento

   

Subject:

AB 2804 (Hayashi) - California Solar Initiative.

As amended: April 14, 2008

 

LEGISLATIVE SUBCOMMITTEE RECOMMENDATION: OPPOSE

SUMMARY OF BILL:

AB 2804 as amended would require the California Public Utilities Commission (CPUC) to consult with the State Architect and grant "special status" to school buildings, as defined in Section 17283 and 81050 of the Education Code, in the implementation of the California Solar Initiative (CSI) Program. Specifically, AB 2804 would require that the CPUC, in consultation with the State Architect's office, define "reasonable time" for school solar project implementation, and then provide schools with that "reasonable time" to obtain all approvals for and install solar systems. Presumably, this "reasonable time" would be beyond the 18 months of project completion time already granted to schools and other government and non-profit entities under the California Solar Initiative (CSI).

SUMMARY OF SUPPORTING ARGUMENTS FOR RECOMMENDATION:

AB 2804 is unnecessary, as schools already have special status in CSI Program.

The California Public Utilities Commission (CPUC) understands that schools face special challenges. Government and non-profit organizations, including schools, are already granted special status under the California Solar Initiative (CSI) and receive a higher monetary incentive and six months of additional project implementation time (18 months as opposed to 12 months for other applicants). Additionally, all projects in the California Solar Initiative are eligible for timeline extensions of up to 180 days on a case-by-case basis.

A new, solar-friendly tariff structure in San Diego territory will address the financial issues that school projects in that area have encountered.

The new DGR tariff, which became available in May 2008, will address the issues of standby changes that have affected many school solar projects in the last 18 months. A major reason for school solar projects dropping out of the California Solar Initiative thus far has been financial viability issues caused by tariffs in the San Diego territory. These issues have been addressed in the most recent San Diego General Rate Case, and will fundamentally and positively affect the financial viability of school solar projects moving forward.

There is no need to provide special consideration to schools as a separate customer class. There is no need to change State law to address a single and specific customer class. Other public buildings, such as recreation centers, public housing developments and government office buildings, have physical and monetary constraints similar to those experienced by schools. All projects faced with similar constraints should be treated equally under the CSI Program for ease of program implementation.

The CSI Program already has a process to handle program changes such as those suggested in AB 2804. Any party seeking changes to the California Solar Initiative Program may file a Petition To Modify (PTM) the Program with the CPUC, outlining reasons for the proposed changes and suggesting how the proposed changes are to be implemented. The PTM is considered by CPUC and either granted or rejected, in part or whole. No stakeholder has raised the issue of granting "schools" special status during the recent history of the CSI program. The issue could be raised as part of CSI program evaluation, or a suggestion could be brought to the quarterly CSI Program Forum, a meeting where stakeholders typically bring program suggestions.

SUMMARY OF SUGGESTED AMENDMENTS:

None.

DIVISION ANALYSIS (Energy Division):

Under the California Solar Initiative, school projects are already given both additional implementation time and additional incentive dollars. Currently, school projects are given up to 18 months to complete their solar projects, and are eligible for an unlimited number of extensions, each up to 180 days. All other residential and commercial solar projects are allowed 12 months for project completion, plus extensions. Additionally, as non-taxed entities, school projects are subject to additional monetary incentives provided by the California Solar Initiative.

AB 2084 would require changes to online application, database tracking and program reporting. If the implementation of AB 2804 created a special category for schools, with additional project completion time for school solar projects, changes would have to be made to the CPUC's policy decisions adopting the CSI program, as well as the CSI application process, which is currently integrated with the program database. The database was developed and is managed by a third party, who would be responsible for implementing the technical changes required to administer a third category of CSI applicants. Additionally, the CSI Program Handbook would have to be changed by CPUC Energy Division staff to clearly reflect the special considerations to be given to school buildings.

PROGRAM BACKGROUND:

The CSI program was created by the CPUC to further the state's goal to create 3,000 MW of new, solar-produced electricity by 2017 - moving the state toward a cleaner energy future and helping lower the cost of solar systems for consumers. The CSI statewide budget is $3.3 billion over 10 years. With a 10-year commitment for solar incentives, and under legislative direction, California aims to build a self-sustaining solar industry free from ratepayer subsidies after 2016.

Under CSI, government and non-profit entities are granted additional project implementation time, with the opportunity for extensions. The CSI Program Handbook1 recognizes the unique physical and administrative issues associated with government and non-profit projects and grants these projects an additional six months of project implementation time. Government and non-profit applicants, including schools, have 18 months to complete their solar projects, while regular commercial and residential projects have 12 months to complete their solar projects. The CSI Program Handbook also allows Program Administrators to grant up to an additional 180 days of project implementation time if an applicant can demonstrate real need for an extension.

LEGISLATIVE HISTORY:

No Prior bills or current similar bills.

FISCAL IMPACT:

Staff estimates that the total fiscal impact of AB 2804 would be less than $100,000 because it would not require adding additional staff; however there would be staff time and consultant time dedicated to implementing this bill. While additional positions would not need to be created in order to implement AB 2804, implementation of the bill would require staff to forgo other pressing issues for a finite period of time, potentially on a recurring basis.

STATUS:

AB 2804 is awaiting hearing in the Senate Committee on Energy, Utilities and Communications.

SUPPORT/OPPOSITION:

None on file.

STAFF CONTACTS:

Erin Grizard, Legislative Liaison eeg@cpuc.ca.gov

Office of Governmental Affairs (916) 445-1430

Date: May 16, 2008

BILL LANGUAGE:

BILL NUMBER: AB 2804 AMENDED

INTRODUCED BY Assembly Member Hayashi

FEBRUARY 22, 2008

An act to add Section 2851.5 to the Public Utilities Code,

relating to energy.

AB 2804, as amended, Hayashi. Renewable energy resources:

California Solar Initiative.

Under existing law, the Public Utilities Commission has regulatory

authority over public utilities, including electrical corporations.

A decision of the commission adopted the California Solar Initiative.

Existing law requires the commission to undertake certain steps in

implementing the California Solar Initiative, including authorizing

the award of monetary incentives for up to the first megawatt of

alternating current generated by a solar energy system, as defined,

with the incentive level declining each year following implementation

at a rate of no less than an average of 7% per year.

This bill would require the commission, in implementing the

California Solar Initiative, to utilize flexible design and

build out completion requirements for a school building, as defined,

that recognize the additional requirements that are applicable to the

modernization or alteration of a school building

consult with the State Architect to determine the reasonable time

period required for school districts to complete all necessary

approvals for, and the installation of, solar energy systems. The

bill would additionally require the commission to permit a school

district to reserve incentives from the California Solar Initiative

for the reasonable time required for the school district

to complete all necessary approvals for, and to install, the solar

energy system .

Vote: majority. Appropriation: no. Fiscal committee: yes.

State-mandated local program: no.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 2851.5 is added to the Public Utilities Code,

to read:

2851.5. (a) In implementing the California Solar Initiative, the

commission shall utilize flexible design and build out

completion requirements for a school building, as defined in Section

17283 and 81050 of the Education Code, that recognize the additional

requirements that are applicable to the modernization or alteration

of a school building.

(b) This section does not limit the authority of the commission to

utilize flexible design and build out completion requirements for

other categories of buildings that, because of special requirements,

generally need more time to complete the planning, design, and build

out of solar energy systems than the average commercial building.

consult with the State Architect to determine the reasonable time

period required for school districts to complete all necessary

approvals for, and the installation of, solar energy systems.

(b) The commission shall permit a school district to reserve

incentives from the California Solar Initiative for the reasonable

time required for the school district to complete all necessary

approvals for, and to install, the solar energy system.


1 Available at: http://www.cpuc.ca.gov/NR/rdonlyres/A4E6B6BD-0D6E-4C5F-BBA1-F2712B491577/0/CSI_Handbook_1_08.pdf

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