SOLANA BEACH — Solana Beach is opposing a proposal by San Diego Gas & Electric that many claim will significantly raise rates for solar users and negatively impact the solar industry.
Every few years, SDG&E submits a forecast of future costs to the California Public Utilities Commission to set rates for its customers. The most recent one was filed Oct. 3.
“According to SDG&E, the proposal is designed to promote fairness, ensure a smooth transition toward a sustainable energy future and help achieve low carbon policy goals outlined by the state,” Dan King, the city’s environmental program manager, said during a presentation at the Nov. 9 meeting.
“Opponents argue the new rate structure will raise rates on solar customers and negatively impact the positive momentum toward more solar installations,” King said.
Ian Stewart, an SDG&E outreach manager, said his company “has a strong commitment to renewable energy, including rooftop solar and customer-generated power.”
“We also have to ensure that the grid is safe, reliable and allows all of our customers to receive power how they demand it and when they demand it,” Stewart said. “We also need to design a utility rate structure that will ensure all customers pay their fair share for utilizing the system.”
Stewart said traditional energy customers are now subsidizing solar users because power is no longer just delivered to customers.
“We now have a two-way street,” he said. “You’re not simply bringing in power and delivering it to customers. You’re now taking power from the customers as well.
“This is increasing the demand on the system that incurs additional costs,” Stewart said.
He said traditional energy customers also pay a monthly fee for infrastructure and solar users do not. Although the current “subsidy” works out to about $25 a year, Stewart said SDG&E projects that could increase to $200 annually if nothing changes.
The company is proposing a network use charge, which would represent the demand on the system.
“It’s proposing to bill customers for their use of the system as they are utilizing it,” Stewart said. “So if they are transporting power back onto the system as well as pulling power back off they now have to pay for that cost.”
He said the charge will be based on average monthly energy use. The proposal also eliminates a monthly $5.10 minimum charge and replaces it with a $3 fee that pays for services such as office support and a 24-hour call center.
The proposal would have little or no impact on bills for traditional customers. Solar users would see an increase of about $22 a month, according to Stewart, who said the new structure is not a rate increase but a program to determine how costs should be allocated.
“We honestly and truly believe this cost shift we’re seeing … is unsustainable and will collapse the current rate structure,” Stewart said.
“According to an independent analysis by the California Center for Sustainable Energy, the impact would be significantly more than has been represented by SDG&E,” Daniel Sullivan said, speaking on behalf of the San Diego Solar Coalition, a group of solar installers.
Sullivan said typical residential solar customers can expect annual bills to almost double, from about $371 to $718.
“The more you provide to the grid, the more it’s going to cost you,” he said.
Sullivan said elementary schools would see an estimated $8,100 annual increase, and water districts will pay about $122,000 more per year.
He said the new rate structure would be a disincentive to installing rooftop panels.
“The economics of solar are completely eviscerated by this rate case,” he said. “If this were approved it would wipe out 20 years of public policy.
“This is not creating a sustainable future for solar,” Sullivan said. “In six months, let there be no mistake, if this … gets approved, we’re out of business. The solar industry in San Diego is gone.”
Because the proposed rate structure would impose a fee that only solar producers pay, it is also illegal, he said.
Sullivan also said SDG&E profits from solar customers who overproduce. They get a credit of 4 cents per kilowatt hour, but SDG&E charges nonsolar customers 31 cents.
“Supposedly we’re freeloaders,” Sullivan said. “This is completely false. … Solar generates revenue for SDG&E.”
“Why should we believe you and not SDG&E?” Councilman Tom Campbell asked Sullivan following his presentation.
“You don’t have to take my word for it because it’s not a matter of me speaking my mind,” Sullivan said. “This is math.”
Sullivan said his calculations came from the California Center for Sustainable Energy, an independent, nonprofit organization that helps residents, businesses and public agencies save energy, reduce grid demand and generate their own power.
“They have no ax to grind,” Sullivan said. “I did not fabricate these numbers.”
Nearly a dozen residents, mostly solar customers, urged council to oppose the SDG&E proposal.
“It will take us longer to break even and we don’t really like this,” Jill Cooper said. “SDG&E needs to stop using a dark-ages business model and do the right thing.”
“If I’m costing the system more, I’m all for paying it but I can’t believe it’s a … jump from $5 a month to something like $40 a month,” Karl Rudnick said.
“They’re penalizing people who are trying to reduce their carbon footprint,” Jack Hegenauer said.
Mayor Lesa Heebner called the proposal “appalling” and “a huge step backwards.”
“This will definitely discourage investment in solar, and that’s bad for jobs,” she said. “It’s bad for the economy. It’s bad for the environment. It’s bad all the way around.”
“This is really about your future,” Councilman Dave Roberts said to the teenagers who were attending the meeting. “If you’re not offended by what you’re hearing here tonight, there’s something wrong.”
“It seems like it’s the wrong idea … at the wrong time when we’re in an economic hardship — to take an industry that has had leaping increases and just cast it aside, and that’s probably what it will do,” Councilman Joe Kellejian said.
At the Nov. 16 meeting, council members unanimously adopted a resolution opposing the proposed rate structure and agreed to send letters of opposition to the Public Utilities Commission, Gov. Jerry Brown and the San Diego Association of Governments.
According to the Center for Sustainable Energy, rate cases can take months to move through the public process. A decision is not expected until August.
If adopted, the basic service fee would be implemented in 2013. Half of the network use charge would be introduced in 2014 and the remainder would be put in place the following year.