Below is a statement form the Imperial Irrigation District regarding legislation authored by Assemblymember Chad Mayes (R-Yucca Valley). Immediately after the statement is the five-page letter from IID General Counsel to the Assemblymember.
Imperial Irrigation District and the IID Board of Directors have proudly served and represented its valued customers in Imperial and Coachella valleys with some of the lowest energy rates in California.
Ten local residents from the IID service area in the Coachella Valley serve on IID’s Energy Consumers Advisory Committee, which meets monthly and advises the IID Board of Directors on energy matters.
The legislation introduced last week by Assemblyman Mayes is a serious matter for the IID and can only be seen as a direct attack on the authority of the IID Board and the water and energy rights it holds in trust and to which it is duty-bound to protect.
The district is concerned about the far-reaching impacts of this bill as well as the potential legal matters, which would surely ensue.
The IID Board is expected to discuss the matter during a special meeting Friday, March 1, and will be meeting with Assemblyman Mayes next week to discuss in greater detail.
As part of the long-standing compromise agreement with the Coachella Valley Water District to serve energy to the area, IID pays CVWD 8 percent of its energy net proceeds ($45 million to date), an additional benefit to the Coachella Valley.
Riverside County Slammed by Judge Granting a Preliminary Injunction Requested by the Imperial Irrigation District…..In granting the injunction, the Judge found that the county’s ordinance conflicts with state law and, if enacted, would cause irreparable harm to the district, said Frank Oswalt, IID general counsel.
IID Also Believes Riverside Violated Brown Act
IID scores initial win in legal battle with Riverside County
LOS ANGELES — A County Superior Court judge here on Tuesday granted a preliminary injunction preventing the county of Riverside from implementing an ordinance that, if enacted, would bypass the authority of the Imperial Irrigation District to set electric rates for its customers, according to an IID press release.
In granting the injunction, Judge Mary Strobel found that the county’s ordinance conflicts with state law and, if enacted, would cause irreparable harm to the district, Frank Oswalt, IID general counsel, reported.
Although no final rulings were made, Oswalt said the court determined that there was a likely probability that IID would prevail if the matter were fully contested, according to IID. Further, should the ordinance be enacted, the IID board and staff would be irreparably harmed by the prescribed criminal penalties in the ordinance, and the district harmed by the millions of dollars in unrecoverable costs to implement it, according to the district release.
In June, the Riverside County Board of Supervisors approved Ordinance No. 943, which would have required IID to scrap its publicly vetted and board-adopted solar tariff, net-energy billing and create a new solar tariff that closely resembles that of a privately owned utility, Southern California Edison.
All this came at the request of a private business owner whose business is located in Riverside County and stands to directly benefit financially from the impacts of this ordinance, according to the IID. The district is referring to Renova Energy owner Vincent Battaglia.
“The notion that Riverside County would usurp IID’s ratemaking authority and adopt an ordinance that violates state law is inherently unreasonable and unprecedented,” said James Hanks, IID board president. “Today’s action by the court is a win for the district and its ratepayers.”
In making her ruling, Judge Strobel also noted several potential areas in which the county’s ordinance may conflict with the Public Utilities Act.
Among those areas are:
“First and most critically, section 2827 (of the Public Utilities Act) provides that a [public owned utility], such as the petitioner (IID), is not required to offer NEM (net-energy metering) programs beyond its 5 percent participation cap provided for under that statute,” the judge wrote. “The ordinance directly conflicts with this general law because it imposes NEM requirement on [IID] ‘as expansive’ as NEM 2.0, which does not have this participation cap.”
Second, the same section defines the ratemaking authority of a publicly owned utility as the board of that utility. “That board has the authority to determine when … the utility is not obligated to provide NEM to additional customer-generators. … The ordinance, in contrast, grants [Riverside County] the authority to regulate [IID’s] rates for NEM credits, and it purports to regulate [IID’s] NEM activities as if it were an [investor-owned utility] under the ratemaking authority of the [California Public Utilities Commission],” the judge wrote in her decision.
Riverside County officials did not comment when contacted by the Imperial Valley Press.
Recently, IID alleged Riverside County was in violation of California’s open meetings law, the Brown Act, when Riverside officials “lined up votes” outside of the public’s purview on Ordinance 943.
What’s more, due to the alleged Brown Act violations, the district sent a letter from one of its attorneys demanding that the ordinance in question be rescinded or that Riverside County face additional legal challenges from the district. From the date of the letter, Oct. 12, the IID has given Riverside County 30 days to respond or be subject to legal action.
LA QUINTA — The Imperial Irrigation District is alleging Riverside County was in violation of California’s open meetings law, the Brown Act, when Riverside officials “lined up votes” outside of the public’s purview on an ordinance the district is now suing over.
What’s more, due to the alleged Brown Act violations, the district sent a letter from one of its attorneys demanding that the ordinance in question be rescinded or that Riverside County face additional legal challenges from the district.
The allegations were made public Tuesday at the district’s monthly meeting in La Quinta during a presentation by attorneys for Aguirre and Severson LLP, an outside law firm hired by the district to make a California public records request on its behalf.
The district is currently embroiled in a lawsuit with Riverside County over the approval of Ordinance 943, a law passed by the Riverside County Board of Supervisors in June compelling the IID to provide additional incentives to electrical customers who have installed solar panels on their properties.
IID officials are opposed to the ordinance, saying that at stake is the district’s authority to set its own rates and that the district is already in compliance with California state law.
“IID’s business model allows the district to offer its customers some of the lowest residential electric rates in California — rates that are as much as 50 percent lower than that of neighboring investor-owned utilities. The ordinance, should it be implemented, jeopardizes these rates and sets a bad public policy that has the potential to impact other public power providers across the state,” IID communications specialist Robert Schettler said in a statement.
The ordinance passed by Riverside County — which is not in effect, but in a court-ordered stay while the suit makes its way through legal proceedings — establishes new regulations and procedures for irrigation districts like IID that are operating net-energy metering programs. Net-energy metering is a program designed to benefit customers who generate their own electricity, usually via rooftop solar panels.
The Brown Act violation allegations are believed to be contained in a series of correspondence Aguirre and Severson requested between Riverside County officials and staff and principals in Renova Energy, a private solar installation company based in Palm Desert that appears to have pushed for the ordinance according to a series of emails.
“Because of the rather troubling aspects of the way this thing was passed, we asked outside counsel to make a public records request,” IID General Counsel Frank Oswalt said.
Oswalt said Riverside County responded to the records request Oct. 2 and within a series of email correspondence attorneys believed they found two emails, or examples, in which the Brown Act was violated.
The Brown Act states, Oswalt said, that a legislative body such as the Riverside County Board of Supervisors “shall not outside a meeting, use a series of communications to discuss, deliberate or take action” on a subject within its jurisdiction.
In a letter to the Riverside County board from IID Deputy County Counsel Joanna Smith Hoff:
“Email correspondence produced by [Riverside] County reveal extensive, non-public solicitation and collection of votes by Supervisor V. Manuel Perez at the insistence of [Renova Energy owner Vincent] Battaglia. For example, by email dated May 5, 2018, Supervisor Perez urged Thomas S. Freeman, a senior Perez staff member:
‘Tom, let’s count the votes. Use this information and the fact that Renova will indemnify. If votes still not there, we will need Vince (Battagalia) to knock on those doors to get us there.’”
Smith Hoff’s letter goes on to cite a second email where Perez lobbies Riverside County Deputy Chief Executive Officer Brian Nestande on May 1:
“Hey Brian, what are we waiting on now? Let’s move this forward. Let’s count the votes. V. Manuel Perez”
Smith Hoff writes: “It is clear from the above emails that Supervisor Perez worked through intermediaries to develop concurrence on Ordinance 943 out of public view and prior to any public consideration of the matter by the board.”
Further, IID alleges in Smith Hoff’s letter that the email correspondence also shows “a secretly negotiated indemnity agreement between Mr. Battaglia and his companies (Renova and ERA) on the one hand, and the county of Riverside on the other, that preceded any public board consideration or action in connection with the adoption of Ordinance 943.”
“We see this letter,” Smith Hoff writes, “as providing you [Riverside] an opportunity to rectify an illegal action avoiding the need for further litigation.” From the date of the letter, Oct. 12, the IID has given Riverside County 30 days to respond or be subject to legal action.
Riverside County officials deny any wrongdoing.
“The Riverside County Board of Supervisors has and will continue to adhere to the requirements of the Ralph M. Brown Act. The allegations by the Imperial Irrigation District have no merit. Board members did not engage in any serial meetings in advance of the ordinance’s introduction and adoption. The recent disclosure of emails in response to IID’s public records request does not change the fact that there were no serial meetings,” Riverside County spokesman Ray Smith wrote in an email Wednesday afternoon.
Aguirre and Severson partner Maria Severson took the IID Board of Directors and those assembled at Tuesday’s meeting through a history of the “behind-the-scenes” development of the ordinance by way of a chain of emails outlining negotiations between Battaglia, Perez and others. There was a specific call to arms against the IID from Battaglia, according to the emails. Battaglia makes references to going to “war” with IID and in another instance calling the IID Board of Directors “rogue, corrupt and environmentally tone-deaf” through the development of the ordinance and the alleged negotiation of the indemnity agreement.
IID is “wasting rate payer money challenging a law they know they have no right to challenge,” Battaglia said Wednesday. “We addressed this Brown Act business. They are throwing anything at the wall to try to make it stick.”
Battaglia said the IID is trying to “paint it as if this greedy solar guy is trying to bring net-metering back. … It’s a just a game they are playing now trying to smear me. … It’s a cartel down there. I understand that mentality; I’m just not going to put up with that.”
He added that any dealings he had with Riverside County officials was above board and legal.
No action was taken on the Brown Act issue by the IID board, as the issue was placed on the meeting agenda as an information-only item. None of the board members nor IID General Manager Kevin Kelley commented on the issue; Oswalt advised, “In fact, it would probably be inappropriate for the board to comment on it.”
Meanwhile, IID filed suit against Riverside over the ordinance back on July 13 in Riverside County Superior Court. The ordinance in question has not gone into effect, as the IID won a stay pending further consideration of the merits of the case. The parties are next due in court Nov. 6 in Los Angeles, seen as a neutral site by the court.
Another news story about the scheme to hand control over California’s energy choice to others who don’t believe in climate change or robust renewable energy.
Opponents see it as a direct threat to California’s clean-energy policies.
It could cede at least some control over California’s power lines and electricity market to coal-producing states such as Wyoming and Utah whose energy policies do not align with California’s. The proposed regional grid organization also would operate squarely under the oversight of a federal government that, under President Trump, is searching for ways to keep coal-fired power plants alive.
“You’ve got to look at who we’re partnering with,” said Loretta Lynch, former president of the California Public Utilities Commission. “We’re not partnering with people who want to be clean and green.”
The new system, critics fear, could even open California’s electricity market to the kind of manipulation that plunged the state into rolling blackouts during the 2000-01 electricity crisis.
You can read the complete story on the San Francisco Chronicle’s web site by clicking here.
This is a great article from our semi-local favorite, the San Diego Union-Tribune.
Here are some pull-outs from “The new solar mandate: A leap forward or a step back?”:
First, rooftop solar systems generate electricity that is anywhere from two to six times more costly than large renewable sources like utility-scale solar farms.
“Rooftop solar is an extremely expensive way to move to zero-carbon energy,” Borenstein said. “It costs a lot more than grid-scale solar. It is not cost-effective for the system as a whole.”That, Bushnell argues, raises the question about whether a mandate was really needed.
“It is a blunt instrument,” Bushnell said. “If you’re building a new home, you have a bunch of choices to make about exactly how energy-efficient you want it to be … And installing solar is now in the ‘you gotta do it’ category.”
Critics worry the new rule could crowd out lower-cost, more efficient renewable energy sources in the future.
As more solar customers get credited at the retail price, there is upward pressure on rates to cover the utilities’ costs (provided the CPUC approves those rate increases).
Borenstein says that leads to costs moving from those who have rooftop solar on their homes to those who do not.
“The CEC says individual homeowners will save money,” Borenstein said. “But they’re only going to save money because they are essentially shifting costs to other consumers, other ratepayers.”
In 2017, after years of forward progress, the globe took a step backward as some of the world’s most important environmental protections were loosened and jeopardized. At the same time, last year saw the global transition to clean energy intensify as well as a renewed focus on public-private partnerships to advance environmental sustainability.
With the cost of renewables continuing to fall at an unprecedented rate, policy makers and business leaders increasingly feel emboldened to advance concrete commitments and work to accelerate climate action, even in the face of determined efforts to prolong the inevitable transition to clean energy. While the U.S. government pulled out of the Paris Agreement, American businesses resoundingly said “We’re still in”, and over 50 U.S. cities put forward ambitious timetables for getting to 100% clean energy.
Business is also advancing environmental sustainability and looking to increase profitability while reducing dependence on natural resources in a constrained world. Additionally, companies are looking to align their corporate strategy with the United Nation’s Sustainable Development Goals; realizing the SDGs, it’s projected, could create upwards of 350 million jobs and opportunities worth $12 trillion across a range of sectors.
Join Us on May 24! Silicon Valley Energy & Sustainability Summit 2018
Join us on May 24 at Oracle to learn about the latest policy and regulatory developments and to explore how to employ the latest innovative technologies and practices to create lasting value and explore what you can do on a practical level to prepare for an evolving landscape. The 6th Annual Silicon Valley Energy and Sustainability Summit will include C-Suite plenaries, policy round tables and case studies, all focused on the business case for clean and efficient energy, environmental sustainability, water conservation and climate action. The event brings together policy experts, elected and appointed officials, business executives and NGO leaders for a series of thoughtful and engaging discussions.
Below is a great article from Lucas Davis, a UC Berkeley professor that published a report a few years ago about the closing of San Onofre, the nuclear facility north of San Diego, and how replacing the nuclear energy with natural gas was the equivalent of adding 2,000,000 vehicles to the roads of California.
700,000 California homes now have solar panels; what does this mean for everyone else’s rates?
“This is the future,” one of my neighbors recently told me, proudly showing off his rooftop solar panels, “Forget the old, inefficient utility.” The panels do look great, and, for a moment, I got caught up in my neighbor’s “green glow” of eco-righteousness. Should I be doing “my part” for climate?
But wait a second. I already am! As Severin Borenstein has been pointing out for years, a big part of the reason why rooftop solar is so popular in California is our electricity rates. And because of the way rates work, every time another neighbor installs solar, my rates go up. I’m tired of it. Why should they get all the “green glow”? Why should I be paying more for their rooftop solar, particularly given that grid-scale renewables are so much cheaper?
Almost 700,000 homes in California have installed solar, about 5% of all homes in California. Today I want to figure out what this means for the rest of us. No fancy econometrics, no complicated model. I just want to do a simple back-of-the-envelope calculation to try to figure out how big of a deal this is.
It is helpful to take a step back and think about what it takes to deliver electricity. Utilities have lots of what economists call “fixed costs”. For example, utilities have to maintain all the transmission and distribution lines used to deliver power. These costs are fixed (not marginal) because they do not depend on how much electricity is consumed.
Note: Utilities have lots of cool trucks. Image licensed under creative commons.
Who pays for these fixed costs? We all do. Every time you use electricity, you help pay for these fixed costs. There is a long history in the United States of regulators setting electricity prices equal to average costs. Economists have argued that it would be more efficient to set prices equal to marginal cost. But the truth is this didn’t matter much in the past, in part because people didn’t have much choice about whether or not to consume electricity.
Until now. Rooftop solar is an opportunity for consumers to radically reduce the amount of electricity they buy from the utility. In Hawaii there is a lot of talk of “grid defection”, but in 99.9%+ of cases solar homes continue to be connected to the grid. Solar homes use the grid just as much as other households, as they are always either importing or exporting electricity, it’s just that they consume much less grid-electricity.
What this means is that good people like my neighbor contribute much less to paying for utility fixed costs. The fixed costs haven’t gone away, but my neighbor now has a lower electricity bill so pays far less of them. This leaves the utility with a revenue shortfall, and it is forced to raise prices. So who pays for the fixed costs my neighbor used to pay? Everyone else.
Note: Utilities have lots of fixed costs.
A key subtlety here is “net metering”. Households who install rooftop solar pay only for the electricity they consume “on net” after solar generation. This is easy and simple, but also wrong. Implicitly, this means that they get compensated for their solar panels’ sales to the grid at the retail electricity rate. This is too high, significantly exceeding what the utility saves from not having to supply that electricity. Under an alternative rate structure, in which households were paid the wholesale rate, you would not have this “cost-shifting” away from solar households.
Ok, but how much cost shifting is actually happening? Outside California, Arizona, and Hawaii, probably not much. But California has a lot of solar, about half of all U.S. rooftop solar. How much have California electricity rates increased due to the 700,000 homes with solar?
This is tricky because we don’t actually know how much electricity is being produced by rooftop solar. Almost everyone is on net metering, so we only observe net consumption, not solar production. Fortunately, the California Energy Commission has poured over solar radiation information and other data and estimated that total annual generation from California behind-the-meter solar is 9,000 GWh. About two-thirds of this is residential, so about 6,000 GWh. To put this in some context, total annual residential electricity consumption in California is 90,000 GWh.
So how much “cost shifting” does this imply? The average residential electricity price in California is $0.185/kWh, while the average wholesale price is about $0.04/kWh. Accounting for electricity that is lost during delivery to the end customer adds about 9% more per kWh delivered. Thus, each time a California household produces a kWh, the utility experiences a revenue shortfall of about $0.14. Multiply this by total residential distributed solar generation, and you get $840 million annually. California utilities receive $15 billion annually in revenue from residential customers, so the total shortfall is about 5%.
This is a crude calculation, and it could undoubtedly be refined. For example, distributed solar proponents argue that local generation allows the utility to avoid distribution system upgrades, which would represent an additional benefit. These impacts have been found to be relatively small, but this continues to be an area of active research. On the other hand, I’ve also made an assumption that significantly decreases my estimate of cost shift. In particular, I’ve used the average residential retail price, but California customers actually pay increasing block rates so most solar customers face a marginal price well in excess of the average price.
The total revenue shortfall works out to about $0.01 per kWh, or $65/year for the average California household. This is more than I expected. And, I’d bet most Californians are not even aware that this cost shift is happening.
So why am I paying $65/year for other people to have solar? It doesn’t make sense. Sure, I’m concerned about climate change, but my $65/year could go a lot farther if it was used instead for grid-scale renewables. Moreover, this is almost certainly bad from an equity perspective, as we know that high-income households adopt solar much more often than other households. Rooftop solar isn’t getting rid of the utility. It’s just changing who pays for it.
Lucas Davis is an Associate Professor at the Haas School of Business, Faculty Director at the Energy Institute at Haas, and Research Associate at the National Bureau of Economic Research. His research focuses on energy and environmental markets, and in particular, on electricity and natural gas regulation, pricing in competitive and non-competitive markets, and the economic and business impacts of environmental policy. His work appears in leading academic journals including the American Economic Review, the RAND Journal of Economics, and the Journal of Political Economy. He blogs along with other Energy Institute researchers at energyathaas.wordpress.com.
Wind/solar advocates point to continued cost reductions due to technological learning.
Wind/solar opponents point to continued value declines due to intermittency.
It tuns out that these two effects cancel out fairly evenly.
Wind and solar will thus remain as subsidy-dependent as they are today.
There can be no doubt that wind and solar power will be important players in the energy system of the future. Over the past decade or so, these sources have grown almost as fast as nuclear power did in the seventies (see below). Since 2010, wind and solar have achieved an almost perfectly linear expansion of about 5.5% of global electricity production per decade (2.3% of global primary energy per decade).
Although wind and solar are settled as important energy players, the magnitude of their contribution to the future energy system is a topic of vigorous debate. The advocate camp points to the continued cost declines of these technologies, often claiming that wind/solar power will soon achieve competitiveness without subsidies, spelling the end of conventional power sources. The following graphs from IRENA for wind and solar illustrate this argument.
Over 32,000 homeowners in the Southern California Edison territory have gone solar this year, and the vast majority are likely unaware of the financial impact they will experience due to Southern California Edison’s newly altered solar rates. A typical homeowner may lose thousands of dollars in savings over the lifetime of their solar power system if it is not designed to factor in the new solar rules and rates.
Under former solar rules, it was simple for solar companies to design a solar power system that resulted in a $0 bill for electric energy. A solar company looked at how much energy a household used on an annual basis and designed a solar power system to produce that same amount of energy per year, regardless of when the system produced energy or when the home consumed energy.
Since July 1, 2017, solar customers in the Southern California Edison (Edison) territory have been on new solar rules, which have forced all solar customers onto “time-of-use rates.” An in-depth analysis is now needed to design a solar power system because with time-of-use rates, Edison charges more for the electricity depending on when a home uses energy in a day, not just how much the home uses in a given month.