Sunday, September 8, 2013

Will the California Legislature Save or Punish Ratepayers?

California's legislature is considering a bill (A.B. 327) that may solidify the monopoly status of investor-owned utility companies by charging all ratepayers a fixed fee.  Not only would this unfairly penalize ratepayers who invest their own money to make their homes and businesses energy efficient, it would strangle nascent efforts to democratize our energy grid with rooftop solar.  California ratepayers are already being taken to the bank by utility companies; each utility collects a guaranteed return of over 10% from ratepayers.  No matter what they build or destroy, they can earn a profit.  Even when utility companies make bad decisions, they expect to be compensated and rewarded.  For example, now that Southern California Edison shut down its failed nuclear plant at San Onofre, it wants to collect 2.4 billion dollars from ratepayers, enough money to pay for its misguided investment and earn at least 5.5% extra. 


Apparently utility companies don't want to give up this good deal, and they are threatened by the thousands of people who are installing solar panels on their rooftops.   In California, most rooftop solar owners are only credited at the retail rate - they do not earn money, but they can reduce the amount of money they owe on their utility bill.  However, this does not just benefit people with rooftop solar.  All ratepayers benefit from the excess energy generated by rooftop solar because it adds clean energy to the grid without the need to invest in expensive new transmission lines and remote power plants.  If this energy were not coming from the house next door, it would be coming from an expensive power plant hundreds of miles away, requiring dozens of miles of transmission lines.



Solar panels provide shade for students' vehicles at Victor Valley Community College in California.  There are plenty of places to generate clean energy in our cities, but utility companies see this development as a threat.  For every solar panel customers install over parking lots and rooftops, utility companies miss another opportunity to expand profits.
Utility company plans to punish rooftop solar and energy efficiency investments does not add up.  How can we justify this when utility companies continue to earn over 10% for the projects they build on remote wildlands, and even a 5.5% return for the failed San Onofre nuclear power plant?  I would rather invest in energy efficiency and rooftop solar than see another landscape destroyed by utility companies.  Instead of imposing unfair rates on the customers that reduce their burden on the grid, perhaps we should consider cutting the guaranteed profits these monopolistic utility companies are taking from ratepayers.

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