Skelton: Controversy over California solar incentive change


The solar system on the roof generates on Gov. Gavin Newsom intense heat. And he’s quietly trying to cool it down.

He does this by pressuring rival interest groups and the California Public Utilities Commission.

Governors and interest groups regularly put each other under pressure. It’s part of the political playbook.

But the PUC is officially an independent agency. And governors shouldn’t rely on the commissioners to shape their policies. Wink, wink.

Successful governors do, of course. You would be negligent not to do it. They appoint all five members and appoint the President. Governors often receive credit or blame for the decisions of their appointees.

Newsom recently appointed two new commissioners. One of these was his energy adviser, Alice Reynolds, whom he installed as president.

“I’ve never known a governor who didn’t have a tremendous impact on the PUC,” says Susan Kennedy, a former commissioner.

“I know every major decision I’ve ever made, I’ve been in constant communication with the governor’s office.”

Kennedy speaks from unusual experience. She was a top adviser to two governors from both parties, and served as cabinet secretary to Democrat Gray Davis and chief of staff to Republican Arnold Schwarzenegger. Davis commissioned her, and Schwarzenegger named her his top advisor after they developed a close working relationship at the PUC.

The PUC’s topical issue is its proposal to drastically reduce subsidies for homeowners who have spent thousands of dollars installing a solar rooftop system after being promised a generous price for the electricity they generate but don’t use. That, plus the fact that they would have to buy fewer kilowatts from an electric utility, made it an attractive long-term investment for those who could afford the installation.

Governors – Schwarzenegger in particular – used these financial incentives to get homeowners to generate their own solar power so they could use less fossil fuel-generated energy that warms the planet.

The strategy was very successful. California has more than 1.3 million rooftop solar arrays, and this state is the national leader in clean energy.

But utilities say the incentives have gotten far too generous, and the PUC agrees. Utilities are being forced to pay solar rooftop owners for their unused electricity many times more than it’s worth. The kilowatts can be bought much cheaper from large solar farms.

In addition, owners of rooftop solar systems feel financially comfortable. Those who don’t usually earn much less have to pay for subsidies from the rich through higher electricity tariffs.

The private utilities — Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric — are allowed to make a specified profit from the PUC. When solar owners don’t rake in their fair share of the profits, non-solar customers get hit. And that’s exactly what happens according to the PUC.

“The utilities end up not paying for the oversubsidies. Other customers do. And those people are poorer,” says Severin Borenstein, faculty director at the UC Energy Institute. “That contributes to the increase in electricity prices.”

OK, but solar roof owners are upset. They accuse the state of not keeping a promise made years ago for a sophisticated deal for the partial conversion to green electricity.

“It’s a lure and switch,” says Jamie Court, a strategist for activist Consumer Watchdog.

Schwarzenegger stated in an op-ed for The New York Times that the PUC plan “should be halted immediately.”

US Senator Dianne Feinstein (D-Calif.) also got involved, writing to the incoming PUC president that the plan “affects and could impact the state’s conservation goals as we address climate change.”

Of particular delight to solar owners is a PUC plan that charges a monthly fee of around $50 to generate the green electricity. The fee would help cover utilities’ fixed costs, e.g. B. for network maintenance and fighting forest fires. Typically, a customer would pay this money when purchasing electricity from a utility. But this is avoided by using self-generated solar energy.

The PUC calls it a “network participation fee”.

“Let’s call it what it is: a solar tax,” writes Schwarzenegger.

“Everyone agrees [the subsidies] need to be reformed,” says Kennedy, adding that she is not involved in the struggle. “How do you keep the solar industry going without introducing something politically stupid like a tax?”

Both sides run TV ads and try to get the public to yell at the governor and the PUC.

“We’re trying to get him to feel the heat and understand that if he’s going to be a leader on climate change, he needs to lead and not be put in a position where California has the worst rooftop solar policies in America.” has.” Court says. “He’s got everyone on his ass.”

Newsom has urged both sides to get their butt off and compromise. They were taught in his office by top helpers.

One side includes the PUC, utilities, unions installing solar farms, and reformers. On the other side are the owners of rooftop solar panels and the companies that sell and install the panels, as well as green energy advocates.

The PUC had scheduled a final decision for last week but postponed it – a sign the panel is trying to reach an agreement.

Newsom is in a bind. He believes the subsidies are too generous and the poor are going astray. But he worries about being labeled anti-solar.

The governor has said very little publicly.

“There is much to do. Leave it at that,” he told reporters three weeks ago. “Lots of conversations. A lot of balls in the air.”

Certainly, Newsom can covertly maneuver the PUC toward a compromise that’s fair to solar owners, low-income rate payers, and the utilities while expanding clean energy. And lower the temperature on yourself. Skelton: Controversy over California solar incentive change

Tom Vazquez

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