BILL ANALYSIS
SB 655
Page 1
Date of Hearing: July 12, 1999
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Roderick Wright, Chair
SB 655 (Peace) - As Amended: July 8, 1999
SENATE VOTE : 28-9
SUBJECT : California Energy Commission: grant program: solar
energy systems.
SUMMARY : Requires the California Energy Commission (CEC) to
develop a five -year program to provide grants to offset a
portion of the costs of qualified solar and distributed
generation installations, contingent on funding of the program
in the Budget Act of 2000. Specifically, this bill :
1)Requires the CEC, to the extent funds are appropriated for
that purpose in the Budget Act of 2000, to implement a grant
program to accomplish specified goals, including making solar
energy systems cost competitive with alternate forms of
energy.
2)Provides that solar systems would be eligible for up to $750.
3)Requires CEC to adopt guidelines, as specified.
4)Revises definition of "solar energy system" to include any
solar collector or other solar energy device, or any
structural design feature of a building, whose primary purpose
is to provide for electricity generation.
5)Requires CEC, to the extent that the funds are appropriated
for that purpose, to develop and implement a grant program to
offset a portion of the costs of eligible distributed
generation systems, as prescribed.
6)Provides that distributed generation systems would be eligible
for up to 10 percent of their cost, up to $2,000.
7)Requires the California Public Utilities Commission (CPUC) to
establish operational and safety standards for distributed
generation systems.
8)Requires CPUC to establish fair and reasonable standby rates.
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9)Defines distributed generation, for the purposes of this bill,
as "any onsite generation, interconnected and operating in
parallel with the electricity grid, that is used solely to
meet onsite electric load.
10)Authorizes CEC to use up to three percent of the funds
appropriated for the program to fund CEC's costs in
administering these programs.
11)Makes related finding and declarations about the merits of
solar technologies and distributed generation.
EXISTING LAW :
1)Requires CEC to expand and accelerate development of
alternative sources of energy, including solar resources.
2)Defines "solar energy system" to mean any solar collector or
other solar energy device, or structural design feature of a
building, whose primary purpose is to provide for the
collection, storage, and distribution of solar energy for
space heating or cooling, or for water heating.
FISCAL EFFECT : Unknown.
COMMENTS :
1)This bill is designed to encourage installation of
residential, small commercial and industrial solar and
distributed generation systems. Solar systems would be
eligible for up to $750 dollars and distributed generation
systems would be eligible for 10 percent of their costs up to
$2,000.
2)This bill is also intended to encourage end-users to install
environmentally superior generation systems to meet onsite
load and thereby improve system reliability and environmental
quality by reducing system load and reducing the need for new
distribution system investments.
3)The amended bill's program start-up date is July 1, 2000.
Funding for these provisions is contingent upon enactment in
the Budget Act of 2000, which would take effect July 1, 2000,
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assuming the Legislature meets its constitutional budget
deadline.
4)Existing law provides a number of mechanisms to support solar
energy, including property tax exemptions for the installation
of solar systems and grants for development and operation of
some solar generation technologies. Existing law also
provides a credit for the cost of solar energy systems.
Proposition 7, passed by voters in a statewide referendum in
1980, exempts active solar energy systems from being assessed
as "new construction" under Proposition 13's property tax
requirements.
5)AB 1890 [(Brulte), Chapter 854, Statutes of 1996] provided
$540 million, collected over a four year period, to operate
and develop new, emerging, and existing renewable resource
technologies. AB 1890 directed CEC to develop a spending plan
for these funds. SB 90 [(Sher), Chapter 905, Statutes of
1997] codified CEC's proposals. The SB 90 monies are awarded
according to the number of kilowatt hours produced, not on a
per-system basis. Under SB 90, the grid-connected
photovoltaic segment of the solar industry, which is eligible
for grants under this bill, is eligible to compete for 10
percent of the $540 million, in the category earmarked for new
and emerging technologies.
6)The solar water heating segment of the solar industry, which
produces no kilowatt hours, is not eligible to compete for SB
90 funding because no kilowatt hours are produced, but is
eligible for grants under this bill.
7)Distributed generation is small scale production of
electricity at or near the point of use, as opposed to central
generation, where electricity is produced in large quantities
at a remote site and transferred to multiple users.
Distributed generation systems range from photovoltaics and
fuel cells to gas turbines and diesel engines in residential,
commercial, and industrial applications. Under this bill,
distributed generation systems are required to be used only to
meet onsite electric load, and not sell power.
8)This bill requires CPUC to establish appropriate
interconnection and safety requirements, and operating
agreements for distributed generation. CPUC is presently
studying the issue of distributed generation. Last December,
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CPUC opened a rulemaking proceeding to consider reforms in the
structure and regulatory framework governing electricity
distribution service, which includes a study of issues related
to distributed generation.
REGISTERED SUPPORT / OPPOSITION :
Support
BP Solar
Alternative Solar Products
Alten
Ameco
Astro Power
Aztec solar
California Solar Energy Industries Association
Diablo Solar services
Environmental Defense Fund
Environmental Solar
Goldline Electronic Controls
Helioco
Heliotrope General
Horizon Industries
Independent Energy, Inc. - Parent of Goldline Electronic
Controls
Leveleg, Precision Solar Mounting Systems
Mark Naylor & Company
Morley Manufacturing
Off-Line Independent Energy Systems
Pacific Energy Company
Potocomm, Inc. the Wireless Power Company
PVI Photovoltaic & International
Real Goods
The Scholfield Solar Energy Company
Science Applications International Corporation
Sierra Pacific Home & Comfort Inc.
Six Rivers
Solar Connection
SolarCraft Services, Inc.
Solar Depot
Solar Unlimited
Solar Utility
Solec
South Bay Solar
SunEarth
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Sunray Energy, Inc.
SunSpot Mechanical
Sun Utility Network
Westburne
Western Renewables Group
10 individuals
Opposition
None on file.
Analysis Prepared by : Joseph Lyons / U. & C. / (916) 319-2083