California Victory: Solar Exit Fee Defeated

In a decision praised throughout the Renewable Energy community, the California Public Utilities Commission (CPUC) voted 3-2 Thursday to approve a decision exempting many types of small, renewable, and clean self-generation of customers of Pacific Gas and Electric Company, Southern California Edison, and San Diego Gas and Electric Company, protecting many solar, wind and fuel cell systems from so-called exit fees.

Sacramento, California – April 4, 2003 [] The Vote Solar Initiative called the vote “a tremendous victory which clears the way for the continued rapid growth of solar energy in California and beyond.” The group helped organized a grass roots effort, which resulted in more than 7000 e-mails sent to the PUC on behalf of protecting solar energy. In January, Administrative Law Judge, Charles Pulsifer issued an order that would have imposed a two to five cent per kWh departing load or exit fee on all distributed generation, including solar, wind and other fossil fuel technologies such as diesel generators. Exit fees were proposed as a means of reducing the state debt incurred by billions of dollars of fossil fuel-fired electricity purchases during the height of the energy crisis, and for billions of dollars in long-term energy contracts. “We’re thrilled with the decision of the CPUC and we’re extremely appreciative of the bipartisan efforts of Rep. Lynn Woolsey (D-CA) and Rep. Duncan Hunter (R-CA) and the other 23 members of California’s Congressional delegation to take the unusual step to weigh in against the solar tax,” Glenn Hamer, executive director of the Solar Energy Industries Association told “Their views clearly made a difference and we’re grateful that citizens and officials at all levels of government expressed their support for solar.” With their ruling, the CPUC indicated that the economic, environmental and social benefits of increased customer use of solar energy outweigh the nominal revenues that would have been collected by the proposed exit fee on solar customers. (The ruling does include a 3,000 MW cap, that, once reached, will tax customer generated power.) “Now, more than ever, the use of solar electric power makes sense for California. Imposition of a new utility fee on solar customers would have been at odds with the state’s goal of making clean, reliable Renewable Energy a greater portion of California’s energy mix,” said Kari Smith, policy director for the California Solar Energy Industries Association. “We applaud the State of California for ensuring long-term renewable power development by sending consistent, non-contradictory policy signals to the state’s utility customers – both residential and commercial.” Since 2000, the installation of large-scale PV systems has increased 1,000-fold in California, while the sale of residential solar systems has exploded across the state. This phenomenal market growth is due, in part, to public policies that remove market barriers and establish competitive pricing. This enables local governments; businesses and individuals to invest in solar, and ultimately help California meet its renewable development objectives. With a 35 percent annual growth rate in grid-connected systems, California’s solar industry is one of the fastest growing industries in the state, adding thousands of skilled jobs each year. Les Nelson, executive director of CalSEIA told the ruling is “pretty close, if not exactly what we were looking for.” “(The decision) means many years of unfettered solar development,” Nelson said. “It’s great news and good work on the part of all who intervened.”
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