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SCE Files its Compensation Proposal Pursuant to AB 920
03/30/10
SCE Files its Compensation Proposal Pursuant to AB 920
On March 15, SCE filed with the California Public Utility Commission (CPUC) its proposed Net Surplus Compensation Rate for solar customers under AB 920. You will recall that AB 920 requires utilities to pay solar customers who are net producers of energy “fair and reasonable” compensation for the surplus energy provided. As an investor-owned utility, SCE must file its proposal with the CPUC. (Municipal utilities like PWP, BWP and GWP need only seek approval from their local City Council. As of this writing, we have not seen anything from the munis yet.)
The filing with the CPUC consists of three documents, which are linked to this posting, and in total they run to more than 100 pages of at times impenetrable regulatory-speak. The first document is the Application to the CPUC, the second is prepared Testimony explaining (sort of) the Application, and the third is a short set of “Work papers” filed in support of the Application. (Please note - any annotations in these documents are MINE, and not those of SCE.)
We will have more to say about these documents in the coming days but for now, we wanted to make sure that interested parties would have access to them and we would welcome your thoughts about the implications of SCE’s proposal. We would note one thing of interest - SCE is NOT proposing to compensate solar customers for the retail value of the electricity produced.
SCE laid out a potential schedule for adoption of its proposal (subject to CPUC approval):
- April 15 - Protests and/or initial public comments to be filed;
- June 8 & 9 - Public workshops to be held;
- June 30 - Comments based on workshops to be filed;
- August 6 - Final Decision
Of course, if the CPUC holds a hearing on these proposals (it is also considering Applications from PG&E and SDG&E) these dates are likely to slip.
Attachments:
10-03-15 SCE Application.pdf (397 KB)- 10-03-15 Testimony.pdf (245 KB)
- 10-03-15 Workpapers.pdf (131 KB)
6 comments
I filed a protest to SCE's application. Happy to provide a copy to anyone. don@donricketts.com
Contrary to dominant «Green» philosophy, I’d rather buy and sell the renewable energy I produce in a free market (though, of course, renewable energy would not exist without the coercive economic inefficiency of forcing taxpayers to bear its much higher cost).That being said, we, unfortunately, have regulated markets so we are forced to debate the details of regulation, just like we are forced to debate the contents of curricula in the school monopoly system. In that context, the proposal to compensate net producers at rates MUCH INFERIOR to the retail value is unfair corporate rent seeking (the natural outcome of an environment where government becomes an extension of business).
In essence PG&E would be buying, at a rate of $0.08 / kWh, many kilowatt-hours produced during peak hours by solar customers and then immediately
...immediately reselling them to other customers at $0.30 / kWh – a purely rent seeking deal. 
DB -Probably not the best forum to debate the virtues of a free market economy, but I would note that the oil & gas industry benefit from far more generous subsidies (and have for decades) than does the renewable energy segment.
That said, I agree with you regarding the inequity in the net-producer rate structures being proposed by the IOUs. Given that their incentive is to maximize shareholder profits, their proposals are not really surprising - up to the CPUC to hold them to a different standard. It will be interesting to see what the Munis do, since their "owners" are (in part) the same people who are the net-producers.
As a percentage of expenditures, or kWh produced, the renewable power subsidies exceed many fold the subsidies of conventional energy. Campaigning for subsidies because someone else gets them, is a race to the bottom of economic efficiency and eventual decline. I do though understand that your stakes in the business are too great to go against these subsidies.For MUNIs the voter incentives are similar, since only a very small fraction of residents (i.e. shareholders) are net producers. And we all know what happens to minorities under a monopoly system. If the majority of electricity consumers can short change the minority of electricity producers by paying them below market rates, they will do it.
Yours is an interesting way to view subsidies (i.e., per kWh produced) but misses the rationale for subsidies in the first place. You should not spend taxpayer dollars to encourage someone to do something that they will do anyway - by definition that is money wasted. Take away all subsidies from the fossil fuel industries and they will continue on as they do now, with a somewhat lower profit margin. Society should provide subsidies with taxpayer/ratepayer dollars to encourage entities (people, companies, etc.) to do something that is in the public interest (i.e., the interest of those from whom the money is taken), but without the subsidies the entity would not be able to afford to do so. Viewed in that light, subsidizing renewables makes perfect sense. Developing renewable energy sources is clearly in the public interest - clean, cheap (longterm), safe domestic energy - so providing subsidies to make those energy sources more affordable (short term) is sound public policy. But subsidies to the fossil fuel industry is money down the drain.
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