Air Date: Week of February 21, 2003

California is considering charging a fee to people who make their own electricity instead of buying it from utilities. Cheryl Colopy, of member station KQED, reports solar advocates are calling the idea an outrage, but regulators say they have a reason.

Transcript

CURWOOD: Welcome to Living on Earth. I'm Steve Curwood. As California looks to pay for the energy crisis that caused rolling blackouts across the state in recent years, those who opt out of the power grid may find themselves paying special exit fees. The proposed levees would raise substantial amounts from large companies who generate electricity on site with diesel or natural gas, but would also hit those businesses and individuals who use renewable energy. That has solar advocates up in arms and looking for an exemption. From member station KQED in San Francisco, Cheryl Colopy reports.

COLOPY: The only way to see the largest solar array in Silicon Valley is to climb up a ladder to the third-story roof of Cypress Semiconductor in San Jose.

[MACHINERY MOVING AROUND]

COLOPY: You mean you guys couldn't have built an elevator just to get me up here?

SMITH: No, sorry.

COLOPY: Black and gray panels cover more than half the roof. David Smith manages Cypress's facilities. He says the multitude of photovoltaic cells here can generate up to a quarter of the building's power.

SMITH: During a peak day in the summertime, when the sun is right overhead and we're on a hot day, we're offsetting tremendous amounts of power cost to support this building. So, it does work out very well for us.

COLOPY: Smith says the solar array is saving 50,000 dollars a year on electricity. But solar is expensive. Under the best circumstances, it would take Cypress seven years to recoup the 1.5 million dollars invested in this roof. Now, it may take much longer.

The California Public Utilities Commission is considering whether to charge companies like Cypress a fee for the kilowatt hours they generate on site. Commissioners aren't calling it a tax. In power terms, it's an exit fee on a departing load. Cypress CEO T.J. Rodgers had been planning to put solar panels on all the buildings at this campus, but now he’s not so sure.

RODGERS: It's really unfortunate. We're just now there, where solar cells can contribute. And right now we're doing the dumbest thing I can think of, which is to put an economic disincentive for solar installation.

COLOPY: California has always encouraged solar power, so some people find it unbelievable that this state could with one hand give rebates and tax credits for solar installation, and with the other charge fees for each kilowatt hour ratepayers don't use. But Pacific Gas and Electric's David Ruben explains that the energy crisis in 2001 left the state with a large bill, and people can't just opt out of paying it.

RUBEN: They would also be reducing the amount that they are contributing toward the recovery of the state's cost, the cost the state incurred in order to buy power during the 2001-2002 period, and also going forward. So the question before the commission is, therefore, if these customers won't be repaying those costs, who then would be? And the answer is it would be shifted onto other customers.

COLOPY: The fee is not aimed at solar and renewable users. They make up only a fraction of off-the-grid producers. But there is a concern that large businesses might build a host of small natural gas plants, seeking to avoid paying high electricity rates.

RUBEN: What should be the responsibility of customers that are now reducing their usage by generating power on site? Again, the alternative being that if these customers don't make some contribution, all other customers are going to need to pick up that additional amount.

COLOPY: As for prospective solar users, Ruben believes the fees will be no disincentive for them. But some public utilities commissioners are sympathetic to the objections raised by the solar industry, and they think exempting solar from the proposed fees would be a good idea. California's consumer groups say be very careful where you grant exemptions. Matt Freedman is an attorney with the Utility Reform Network.

FREEDMAN: We have to start from the recognition that rates in California are at historically high levels.

COLOPY: In fact, the highest rates in the nation. Freedman says at least the burden must be shared equally.

FREEDMAN: We need to make sure that there are as few exemptions from paying for the energy crisis as possible, because the greater the exemptions, the more that average customers are going to end up taking this pain and having their rates stay high. And that's certainly not fair.

COLOPY: Freedman says his group does support the idea of an exemption from fees, but only for small wind and solar units. He likens installing a solar system at a home or business to buying a new energy-efficient refrigerator or air conditioner to replace an old energy hog. And the state would never contemplate charging people for the energy their new appliance isn't using. Everyone else, he says, must share the burden of California's staggering energy bill. For Living on Earth, I'm Cheryl Colopy in San Francisco.

[MUSIC: Chris Whitley “Good Thing” Din of Ecstasy Sony Music (1995)]

 

Links

Solar Buzz website

The Utility Reform Network

California Public Utilities Commission