BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 655|
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UNFINISHED BUSINESS
Bill No: SB 655
Author: Peace (D)
Amended: 8/16/99
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE : 8-0, 4/13/99
AYES: Bowen, Baca, Brulte, Kelley, Mountjoy, Peace, Solis,
Speier
NOT VOTING: Alarcon, Hughes, Vasconcellos
SENATE APPROPRIATIONS COMMITTEE : 9-4, 5/27/99
AYES: Johnston, Alpert, Bowen, Burton, Escutia, Karnette,
McPherson, Perata, Vasconcellos
NOES: Johnson, Kelley, Leslie, Mountjoy
SENATE FLOOR : 28-9, 6/1/99
AYES: Alarcon, Alpert, Baca, Bowen, Brulte, Burton,
Chesbro, Costa, Dunn, Escutia, Figueroa, Hayden,
Johannessen, Johnston, Kelley, McPherson, Murray,
O'Connell, Ortiz, Peace, Perata, Polanco, Rainey, Schiff,
Sher, Speier, Vasconcellos, Wright
NOES: Haynes, Johnson, Knight, Leslie, Lewis, Monteith,
Morrow, Mountjoy, Poochigian
NOT VOTING: Hughes, Karnette, Solis
ASSEMBLY FLOOR : 76-1, 9/7/99 - See last page for vote
SUBJECT : California Energy Commission: grant program:
solar energy
systems
SOURCE : Author
CONTINUED
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DIGEST : This bill establishes a grant program to
increase consumer investment in solar and low-pollution
distributed generation systems.
Assembly Amendments (1) clarify the dates of implementation
and sunset of the grant program, (2) delete the requirement
that "CEC, subject to PUC approval" establish standards for
distributed generation and, instead, requires the PUC to
establish them, and (3) clarify the goals of the grant
program and the expedited process for distributed
generation.
ANALYSIS : Existing law provides a variety of mechanisms
to support solar energy. These include property tax
exemptions for installation of solar systems and grants for
development and operation of some solar generation
technologies.
Since 1976, California tax law has provided a credit for
the cost of solar energy systems installed in California.
Existing federal law provides a credit equal to 10% of the
cost of energy property placed in service during the year.
In 1980, the California Constitution was amended by
initiative (Proposition 7) to provide that active solar
energy systems would not be assessed as "new construction"
under Proposition 13's property tax requirements.
AB 1890 (Brulte), Chapter 854, Statutes of 1996, provided
$540 million, collected over four years, to operate and
develop new, emerging and existing renewable resources
technologies. The California Energy Commission (CEC) was
charged with developing a spending plan for these funds, as
well as others dedicated in AB 1890 for various public
purpose programs. The CEC spending plan was codified by SB
90 (Sher), Chapter 905, Statutes of 1997.
Under SB 90, the grid-connected photovoltaic segment of the
solar industry (which is potentially eligible for grants
under this bill) is eligible to compete for 10% of the $540
million, which is the portion designated for new and
emerging technologies. That money is awarded according to
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the number of kilowatt hours produced, not on a per-system
basis. As a result, the solar water heating segment of the
solar industry is not eligible to compete for this funding
because no kilowatt hours are produced. And, by
definition, the non-grid-connected photovoltaic segment is
also not eligible.
Distributed generation (DG) 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 transmitted to multiple
users. DG systems range from photovoltaics and fuel cells
to gas turbines and diesel engines in residential,
commercial and industrial applications. They can operate
in conjunction with, or independent of, the electricity
grid. Under this bill, solar and DG systems are required
to be interconnected with the electricity grid to be
eligible for grants. DG systems are further required to be
used only to meet onsite electric load, and not sell power.
This bill requires CEC, beginning July 1, 2000 and until
January 2005, to develop a program to provide grants to
offset a portion of the costs of qualified solar and DG
installations, contingent on funding of the program in the
annual Budget Act. Solar systems would be eligible for up
to $750 and DG systems would be eligible for 10% of their
cost, up to $2,000.
This bill further requires the PUC to establish operational
and safety standards for DG systems.
This bill also expands the purpose of a "solar energy
system" to include "electricity generation" for the Civil
Code's definition of a "solar easement."
The bill requires the PUC, to establish appropriate
interconnection and safety requirements and operating
agreements for DG systems.
Prior Legislation
This bill is similar to SB 116 (Peace) of 1998, which
established a grant program for solar systems, but not DG
systems. In addition, SB 116 reinstated a property tax
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exemption for the installation of solar systems. SB 116
was vetoed by Governor Wilson, who objected to the grant
program, stating a preference for "fair and open market
competition without government subsidization of one
particular industry." Governor Wilson had already
reinstated the solar property tax exemption by signing AB
1755 (Keeley), Chapter 855, Statutes of 1998.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
Senate Appropriations Committee staff estimates the CEC
will have the following fiscal impacts:
1.Consultant contracts totaling $180,000 one time to
evaluate the various distributed generation technologies
and develop performance standards.
2.Consultant contracts estimated at $200,000 to develop the
operating agreement criteria, guidelines, and
requirements.
3.To the extent interim requirements are needed, one CEC PY
may be needed to accomplish this task.
4.Consultant contract estimated at $120,000 to assist the
CEC with establishing fair and reasonable standby rates.
The CEC will likely need one-half PY to work with the
California Public Utilities Commission in establishing
these rates.
5.Unknown, probably two to three PY to develop and
administer the grant program.
SUPPORT : (Verified 9/8/99)
Ackler & Associates, Sacramento
Alten, Palo Alto
Alternative Solar Products, Los Angeles
Ameco, Long Beach
Astro Power, Walnut Creek
Aztec Solar, Sacramento
BP Solar
California Solar Energy Industries Association, Rio Vista
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California Manufacturers Association
California Building Industry Association
California State Association of Electrical Workers
California State Council of Laborers
Clean Power Campaign
Concorde Battery Corporation
Diablo Solar Services, Martinez
Environmental Defense Fund, Oakland
Environmental Solar, North Hollywood - 15 letters
Goldline Electronic Controls, La Mesa
Helioco, Napa
Heliotrope General, Spring Valley
Horizon Industries, Escondido
Independent Energy, Inc. - Parent of Goldline Electronics
Controls, La Mesa
Leveleg, Precision Solar Mounting Systems, San Diego
Mark Naylor & Company, San Diego
Morley Manufacturing, Cedar Ridge
New Energy Ventures, Inc. (NEV)
Off-Line Independent Energy Systems, North Fork
Pacific Energy Company
Photocomm, Inc. the Wireless Power Company, San Diego
PVI Photovoltaic & International, Sunnyvale
Real Goods, Ukiah
Sacramento Municipal Utility District
San Diego Regional Energy Office
Schofield Solar Energy Company, San Buena Ventura - 2
letters
Science Applications International Corporation, San Diego
Sierra Club
Sierra Pacific Home and Comfort, Inc.
Six Rivers, Eureka
Solar Connection, Morro Bay
SolarCraft Services, Inc. Novato
Solar Depot, Sacramento
Solar Depot, San Rafael
Solar Unlimited, Burbank
Solar Utility
Solec, Carson
South Bay Solar, San Jose
SunEarth, Ontario
Sunray Energy, Inc., Daggett, California
SunSpot Mechanical, Escondido
Sun Utility Network, Los Angeles
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Westburne, Escondido
Western Renewables Group, Mission Viejo
Numerous individual letters
ASSEMBLY FLOOR :
AYES: Aanestad, Ackerman, Alquist, Aroner, Ashburn,
Baldwin, Bates, Battin, Baugh, Bock, Brewer, Calderon,
Campbell, Cardenas, Cardoza, Cedillo, Corbett, Correa,
Cox, Cunneen, Davis, Dickerson, Ducheny, Dutra,
Firebaugh, Florez, Floyd, Frusetta, Gallegos, Granlund,
Havice, Hertzberg, Honda, House, Jackson, Keeley, Knox,
Kuehl, Leach, Lempert, Leonard, Longville, Lowenthal,
Machado, Maddox, Maldonado, Margett, Mazzoni, Migden,
Nakano, Olberg, Oller, Robert Pacheco, Rod Pacheco,
Papan, Pescetti, Reyes, Romero, Runner, Scott, Shelley,
Soto, Steinberg, Strickland, Strom-Martin, Thompson,
Thomson, Torlakson, Vincent, Washington, Wayne, Wiggins,
Wildman, Wright, Zettel, Villaraigosa
NOES: McClintock
NOT VOTING: Briggs, Kaloogian, Wesson
NC:cm 9/8/99 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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