Consumer Federation of California

The Consumer Federation of California (CFC)
has been playing an active role in ensuring the California Solar
Initiative (CSI) is implemented in a way that is fair to all consumers,
as well as beneficial to the State’s environment and economy.

The CFC, in comments to the state’s Public Utility Commission on May
15, 2006, advised caution in how the $2.8 billion budgeted for the
Initiative is allocated. The CFC, as outlined in its filing, believes
that public utility customers should not be paying for the CSI unless
they are going to see reduced utility bills in return.

Further, before doling out rebates to customers installing solar
technologies, CFC advised the Commission to determine where that money
will do the most good and target those markets. In particular, to
congested urban areas and regions where new housing developments are
going up, which in return reduces demand for electricity during peak
periods.

Other advice filed by the CFC was as follows:
Rebates shouldn’t be given to customers who live in buildings that
"leak" energy but don’t make the necessary energy efficency
improvements to rectify the problem.

The CSI budget should be allocated fairly among the various groups of customers, whether business or homeowners.

Ratepayers should pay only for the solar energy that is actually
produced, not the amount that is estimated to be produced, therebye
creating an incentive for solar users to monitor the efficiency of
their equipment and maintain it.

And finally, inspectors should be dispatched to make sure the panels are installed properly.

The Commission will make an initial decision on the CSI program design in July, 2006.

Below are excerpts from submitted comments by Alexis K. Wodtke, CFC’s Staff Attorney, to the CPUC:

THE CONSUMER FEDERATION OF CALIFORNIA’S COMMENTS
ON CPUC ENERGY DIVISION STAFF PROPOSAL FOR
CALIFORNIA SOLAR INITIATIVE, DESIGN AND ADMINISTRATION

R.06-03-004

The Consumer Federation of California ("CFC") submits the following
comments in response to the "scoping Memo and Ruling of the Assigned
Commissioner and Administrative Law Judge" issued on April 25, 2006,
requesting comments on the Energy Division Staff Proposal For
"California Solar Initiative, Design And Administration 2007-2016."

The CFC agrees with most parties to this proceeding that it is
essential for the State to promote energy efficiency and to develop
renewable sources of energy. The CFC believes customers will benefit,
in the long term, if the State is able to reduce its reliance on fossil
fuels and nuclear power.

Since the Commission proposes to impose the
cost of the California Solar Initiative (CSI) on customers of the
Investor Owned Utilities, however, the program should be designed to
equitably allocate the costs among customers and to maximize the
benefits to ratepayers.
The Commission’s goal is to obtain 2600 MW of solar power, to
displace existing power resources, by spending $2.8 billion over a
ten-year period.

Some of the goals underlying the Staff Proposal are
reasonable, i.e. making the program simple to administer, and
transparent so it is easily understood by customers. Other goals should
be left to the legislature to implement, e.g., ntroducing competition
among solar equipment providers so that new technologies will be
introduced and efficiency of the equipment will be maximized.

A 2005 report commissioned by the PUC indicated that the
cost-benefit ratio for PV was, optimistically around 30%, when costs
and benefits to all ratepayers and to society are considered. (The
ratio is much higher, 88%, for participants.) At the workshop on May 4,
2006, Staff agreed that the solar technologies it proposes to include
in the CSI, other than PV, are not cost-effective.

Before spending any
additional funds to facilitate customer installation of solar
technologies, the Commission should undertake a thorough cost-benefit
analysis and establish priorities for the use of these funds.
The Commission recognized in D.03-02-068 that high peak prices
"support consideration of distributed generation as a customer-side
peaking resource." (Distributed generation has the potential to reduce
system demand in areas experiencing load growth. (Id., at