How CA Came Close to Losing Solar Panel Benefits
California Solar Energy Industries Association’s Bernadette Del Chiaro says monopoly utility companies have spent $17 million on campaign contributions to get rid of net metering and consumer benefits
JESSICA DESVARIEUX, TRNN: Welcome to the Real News Network. I’m Jessica Desvarieux in Baltimore.
California is the biggest solar market in the U.S., and on Thursday the California Public Utilities Commission voted to continue the net metering program. This program allows folks to produce their own power and then sell that power back to the grid. It’s a pretty sweet deal that’s been helping the industry grow in the state, and a similar vote which rolled back rooftop solar benefits in Nevada has decimated the solar industry there.
With us to help break down the vote and understand just what interests are behind pushing against this renewable program is our guest Bernadette Del Chiaro. She’s the executive director of California Solar Energy Industries Association. Thank you so much for joining us, Bernadette.
BERNADETTE DEL CHIARO: You’re welcome, thanks for having me.
DESVARIEUX: So Bernadette, this was a really close vote, three to two, but your side, which was against increasing costs for solar panel users, ended up winning. What arguments were you making to sway the vote on your side?
DEL CHIARO: Well, I mean, the biggest one is California, as you mentioned in the beginning, is the largest market for rooftop solar in the United States. However, we’re only barely scratched the surface. Only 3 percent of California rate payers have their own solar energy system, and less than 1 percent of California’s electricity comes from rooftop solar. So while we’ve seen tremendous growth and we’re a source of a lot of jobs, in fact, 65,000 people work in the solar industry just in California alone, we’re really just starting out.
And you know, the vision for the rooftop solar industry is that nearly everybody should have access to generating pollution-free electricity from the sunlight that falls on their roofs or on their backyards every single day, and we’ve made great progress in making solar more affordable. In fact, over the past couple of years the greatest growth in rooftop solar adoption is in neighborhoods with low to moderate incomes. So we’re starting to see more just average, everyday Californians with modest incomes to be able to afford going solar, because we brought the prices down so much. That growth is what’s sort of triggered this whole controversy.
DESVARIEUX: I was going to say, because the utility companies certainly don’t see it that way. And we have to mention that essentially the solar industry had lobbied hard over the last week against this little notice footnote that would have required solar owners to pay an electricity transmission charge, which essentially ensures that they, like other rate payers, they pay their share of the cost of maintaining the electric grid of transmission wires and the like.
So why should those who use solar panels not pay what some would argue their fair share to keep the electric grid?
DEL CHIARO: Yes. Well, the policy that was under debate was the policy called net metering. And it gets pretty wonky pretty fast. But as you said in your opening, it’s essentially the ability to send surplus electrons back to the electric grid on sunny days and use that electron credit, and that credit then goes to count against the electricity you draw from the grid at nighttime or when the sun is not out.
In sunny places like California this makes a whole lot of sense. Not just for the solar consumer and the person with solar on their home or their school or their business, but also for everybody in the grid. And that’s because if you remember back to the electricity crisis and the rolling blackouts that California saw at the beginning of the century, 2001-2002, it was during hot summer days, when California’s air conditioning load goes through the roof. And we are yet basking in all of the sunshine that we could use to generate electricity.
So to be able to generate surplus that goes to your neighbor, and your neighbor’s neighbor, and helps keep the lights on in a pollution-free way, and drawing from the grid at nighttime when we have actually a lot of surplus electricity during that time of day is really a win-win for everybody. And so net metering facilitates that. The utilities are really–what they’re threatened by is the fact that the way they’re set up, their profits are set up in California for California’s three investor-owned utilities, which are Pacific Gas and Electric in northern California, southern California Edison in the Los Angeles and Inland Empire area, and then San Diego Gas and Electric in San Diego. Those three utilities make their money off of building large infrastructure projects like transmission lines. And they don’t really make money anymore off of selling electrons.
So the problem with rooftop solar is that it actually reduces the need to build big, expensive power plants and big, expensive transmission lines, and that cuts into the profit motive of these utilities. And that’s really at the heart of the matter.
DESVARIEUX: Got it. Got it. But we should also mention, it wasn’t a complete victory for the solar industry. California utility regulators, they narrowly passed new rules that will increase costs for owners of rooftop solar systems. Can you just talk about that a bit? What are these new fees all about?
DEL CHIARO: Yes. So basically what the commission–it wasn’t a, we didn’t get everything we wanted. It was actually a real compromise. What the new fees–first of all, if anybody has gone solar to date, there are about 400,000 homes, schools, renters, farmers, et cetera, around the state of California that have gone solar. Those folks, they don’t pay these new fees. They are grandfathered for 20 years from the time they turned their system on. It’s for folks going forward into the future that want to go solar in the next six months to a year, and beyond that.
The new fees will basically be–there’s two new fees that people will feel. One is a one-time what’s called an interconnection fee, that basically when you flip the switch you have to pay for some of the administrative costs that the utility incurs as a result of you going solar. So that’s going to be $75-$150, depending on the size of your system. For most homeowners it would be around $75. The second fee is going to be a monthly fee. We estimate that to be around $8-$10 a month for an average, typical home, you know, residential energy user. What that money goes toward is what are called public goods funds, things like low-income bill payment assistance, energy efficiency rebates, nuclear power plant decommissioning. These are all hidden costs in everybody’s bill, that when you pay for every electron that you consume in your home, you’re paying a little surcharge, a little tax on your bill.
What the decision yesterday said was for those electrons that solar customers are putting back onto the grid, they should pay a little bit of that surcharge, so that they’re paying into the overall pot of money. And historically this decision was debated. California’s had net metering for over 20 years. The reason why the commission in the past has already always exempted solar customers from those fees is the concept that these people that are early adopters of this really promising, beneficial technology are already doing more than their fair share of protecting the common good. Because we are growing, and it seems reasonable at some point to actually start to phase that back in, so that’s what yesterday’s decision does.
But to your point, the utilities are trying to kill the rooftop solar market. They’ve been successful in Arizona, in Nevada, in Hawaii, and they were going for the holy grail of California. What they tried to sneak in basically last-minute was a transmission charge. And this one is sort of salt on a wound, because not only would it have made that monthly fee 2-3 times bigger and made the cost of going solar out of reach of most consumers, but it actually makes no sense to ask what is by definition a distributed–within the distribution network.
So there’s two different parts of the grid. There’s the transmission grid that has big, huge electric lines that go across great distances to bring electricity from out in the desert or out in far away lands into the city, and then there’s the distribution grid, which is what takes it and brings it to our little homes and our little businesses. Solar energy exists entirely within the distribution grid,
and so to charge solar customers, who are doing more than their fair share of reducing costs for everybody in terms of reducing the need to build these expensive transmission lines and power plants, shouldn’t have to pay for those transmission lines.
DESVARIEUX: Gotcha. Gotcha. Bernadette, I want to talk a little bit more about these, the utility companies, these Goliaths of industry, this fossil fuel industry. What were their tactics in fighting this bill? Can you speak to specifics? They were probably pulling out all the stops. You’re an insider, what did you face?
DEL CHIARO: Yeah. It’s been an intense year-long battle, at least. I mean, obviously it’s been death by a thousand cuts for years. The solar industry is always swimming upstream because we’re seen as a disruptive technology, right. We’re turning the whole concept of what consumers, consumer choice in the grid, and turning it on its head, and giving consumers the ability to generate electricity instead of being just simply consumers from these utilities.
But it’s really important to know that they’re monopoly utilities, and they’re incredibly powerful. So there are three concrete things that they did to basically try to overthrow this vote, and they came very close. One is they spent a lot of money on campaign contributions, they spent $17 million in the past two years on giving campaign funds to politicians. The second is they hire hordes of lawyers. For every one of us that are in there defending a broad public interest and consumer choice, there’s about 20 lawyers seated across the table from us. So that’s incredibly influential, and they can bend the will of these agencies and these decision-makers toward them.
And then the third one is they started up a front group called FixMyEnergyBill.com. And you would, if you went to that website you would see a bunch of smiling faces of consumers saying, hey, it’s not fair. Solar is getting away with, you know, getting too much of a deal. But you never see the utility companies, in particular the San Diego Gas and Electric, or Sempra, its parent company, are behind it. Unfortunately, they didn’t let their PR company know that they publish and brag about this website. And so we were able to find that on the PR company’s website that formed this front group, they were bragging about how they did this great website all for Sempra energy, all to defeat net metering.
So that’s the kind of tactics that they’ve been up to, and we’ve been trying to shine a spotlight on that. And it’s a real testament to the governor’s support of consumer choice and renewable energy, as well as the three commissioners that voted just yesterday that they stood up to these powerful utilities and voted in favor of consumers and in favor of climate change and renewable energy.
DESVARIEUX: But two of them voted against everything you just listed there. So that just shows you how close this was, and the level of influence they have. Let’s quickly turn the corner and talk about the future. What’s on the horizon for the solar industry in California? What other bills are you proposing, and how are you trying to push for consumers to move away from fossil fuels and use renewables like solar energy?
DEL CHIARO: Yeah, there’s two things. One of the most exciting movements that yesterday’s decision sort of teed up for the rest of 2016 is that we’ll be working with our allies in the environmental justice movement like Brightline and Defense Project and others to set up a special program to make solar not just more affordable to low-income but literally put it directly in the hands of affordable housing renters. So this is the side of the market that’s the most difficult to reach. They’re in low-income, in affordable housing projects, and they rent. So how do you get rooftop solar in the hands of these folks?
And we’ve just passed a bill last year with our environmental justice allies, there’s an organization called the California Environmental Justice Alliance, CEJA, that we worked very closely with to pass a bill that created a billion-dollar program to build solar on affordable housing projects throughout the state of California, for the specific benefit of the tenants. So the tenants of these projects will now see their electric bills significantly reduced as a result of having solar in their, on their, in their community and on their roofs.
So it’s a really exciting program. We just passed the law last year and it’ll be something that needs to be implemented this year [after] QC. But something to really look into and an exciting new development. I think it’ll be the biggest affordable housing, low-income solar program, probably, certainly in the country, if not beyond that.
And then the other item that we’re really focused on right now is reducing our overuse of natural gas. And that goes beyond electricity. We use natural gas in all of our homes and our businesses to heat our water, and to light our, you know, to fuel our stoves and our heating units. Water heating is actually the single largest use of natural gas, and it’s something that the solar industry actually has a product called solar hot water systems that are basically very old, proven technology that can greatly reduce your use of natural gas, and I think the disaster at Porter Ranch and Aliso Canyon area of Southern California, where we’ve just seen so much methane and greenhouse gas emissions emitted through the disaster of the leaking gas well there as an example of the need for California to look at our fuels, our heating fuels, and how to make them renewable, as well as our electricity.
DESVARIEUX: All right. Bernadette Del Chiaro, congratulations on the victory, and thank you so much for being with us.
DEL CHIARO: You’re welcome. Thank you.
DESVARIEUX: And thank you for joining us on the Real News Network.
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