New California Energy Bill Passes State Senate

Posted: 09/27/2013  browse the blog archive
New California Energy Bill Passes State Senate

A new energy bill passed by California legislators on Monday could affect millions of Southern California residents as well as the renewable energy industry, the Los Angeles Times reported on September 9.  AB 327 authorizes the Public Utility Commission to change the energy pricing tiers for California residents, which have been frozen since the blackouts and rolling brownouts that plagued the state’s electrical grid in 2000 and 2001.

According to state-regulated utilities Southern California Edison Co., Pacific Gas & Electric Co., and San Diego Gas & Electric Co., the freeze on these retail rates did not protect utility companies, which were faced with rising costs of wholesale power, generation, transmission, and renewable energy.  These rising costs have been primarily borne by large volume consumers and residents of hotter inland cities.  Critics charged that this practice discriminated against the elderly and those with low incomes, who tend to disproportionately live in the affected areas and were burdened with higher bills. 

Under the new legislation, people who live in sweltering areas such as the San Joaquin Valley, the Inland Empire and the Mojave Desert would receive rate relief, while residents of temperate climates would receive higher bills.  The PUC would also have the power to charge all ratepayers a fixed monthly fee of up to $10 each.

Opponents of the bill include the Sierra Club, along with some farmers and manufacturers.  The Sierra Club asserts that the fixed monthly fee harms consumers who had already installed costly solar panels and other renewable energy projects to reduce energy bills.  Sierra argued that those individuals should be exempt from the monthly fee.    

However, the bill also mandates that utilities generate more electricity from wind, solar, and other renewable sources.   California already has one of the most aggressive renewable energy portfolio standards in the United States; currently, the state requires that energy companies generate 33% of their power from renewable sources by 2020.

AB 327 passed the state Senate by 33-5 on Monday.  In May, the Assembly approved the bill in a 66-4 vote.  Governor Jerry Brown is expected to sign the bill into law.

The Chanler Group is actively engaged in the review and analysis of incentive-based renewable energy programs to determine potential benefits to our clients.  Global energy consumption continues to increase each year and, with this increase, the demand for safe, clean, and unlimited energy is on the rise.  The Federal and State governments promote this interest through a variety of financially-beneficial incentives.  Our understanding of these laws allows us to guide homeowners, businesses, and/or developers through the various ways to take advantage of these incentive-based benefits.  With the appreciation that renewable energy laws and regulations are constantly changing, The Chanler Group is committed to investing in its understanding and practice of this area of law.

Photo Credit: Christopher Padalinski, used under the Creative Commons Attribution-Share Alike license