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December 14, 2005 latimes.com : CALIFORNIA AND THE WEST
PUC May Energize Governor's Solar Plan
Commissioners hope to generate enough power over 11 years to end need to build gas-fired plants.
By Marc Lifsher, Times Staff Writer
Gov. Arnold Schwarzenegger's stalled campaign to put solar energy panels on a million California rooftops could start moving again this week with the help of state regulators.
The California Public Utilities Commission released details Tuesday of its $3.2-billion plan to generate enough solar power over the next 11 years to eliminate the need to build six natural-gas-fired power plants.
The commission is expected to approve the plan at its regular meeting Thursday, resurrecting a key Schwarzenegger initiative that ran afoul of partisan sniping in the Legislature this year.
"The PUC's anticipated action will go a long way toward meeting the people's demands for clean and reliable energy at all times," said Darrel Ng, a Schwarzenegger spokesman.
The cost would be borne by customers of the state's three investor-owned utilities — Southern California Edison Co., Pacific Gas & Electric Co. and San Diego Gas & Electric Co.
Edison estimates that its average residential customer, with monthly usage of 550 kilowatt hours, would pay about 55 cents more a month to help finance subsidies for the new solar system. Industrial, commercial and institutional users would pay proportionately more.
The PUC's plan, which would increase the state's total solar output from 101 megawatts now to 3,000 megawatts by 2017, is expected to provide less than 5% of the state's electricity needs when fully in place.
The total price tag for ratepayers would start at about $400 million in 2006 and decline to just over $100 million in 2016 as the state ratchets down the size of rebates to homes, businesses and public buildings that install photo-voltaic panels that convert sunlight to electricity. Solar advocates, including environmentalists and panel manufacturers, contend that fewer subsidies would be needed over the next decade because prices should drop as technology improves.
Many business groups and academic energy experts counter that a large-scale push for solar power next year is neither the cheapest nor the most competitive way to meet California's burgeoning appetite for energy.
The cost of generating solar power, once the $3-billion subsidy is stripped away, is "three or four times more expensive than [electricity] from gas-fired plants," said Severin Borenstein, director of the University of California Energy Institute in Berkeley.
"The problem is solar panels are very sexy," he said, "and it's much easier to get people excited about them than energy efficiency or wind power."
The state, rather than subsidizing affluent homeowners for solar panels, should be putting its money into developing truly cost-efficient photo-voltaic systems, Borenstein said.
California businesses need more abundant sources of cheaper electricity to be able to compete with neighboring states that have far lower power costs, said Dorothy Rothrock, a vice president at the California Manufacturers and Technology Assn.
Investing in solar with today's technology is "betting on the come that the price will come down," she said.
The PUC's new solar power initiative is expected to be the largest in the nation and, possibly, the world, Commissioner Dian M. Grueneich said.
"Polls indicate that there is very strong support for doing solar power, and this is the type of program that will drive down prices" and reduce emissions of the greenhouse gas that contributes to global warming, she said.
The PUC's four commissioners — all but one are Schwarzenegger appointees — are expected to pass their version of the governor's solar plan in two phases.
On Thursday, they will vote on a stop-gap proposal to inject $300 million into an existing, nonresidential solar-subsidy program that is short of money to meet demand through 2006.
Next month, the commission plans to take up a longer-term plan that provides funding for business and residential installations, and also earmarks 10% of the money toward installing solar systems in low-income housing.
The PUC's solar plan differs in two significant ways from the one now on hold in the Legislature.
The governor's plan would have required all home builders to offer buyers the option of adding a solar electrical system.
It also would have allowed more solar power users to sell surplus electricity to the state's utility grid by increasing the availability of high-tech meters.
Schwarzenegger and Assembly Speaker Fabian Nuñez (D-Los Angeles) said they hoped to act next year on the parts of the original proposal that remain outside the PUC's authority.
Nuñez stressed, however, that Democrats would continue to safeguard the interests of labor unions, who criticized the original bill for failing to ensure that solar installers would receive so-called prevailing wages on new home and commercial construction projects.
Prevailing wages are higher than typical construction paychecks and vary from region to region.
The California Apollo Alliance, a coalition of environmental, human rights and labor groups such as the International Brotherhood of Electrical Workers, is supporting the PUC proposal because it "will create high quality jobs."
Environmentalists said they were pleased with the PUC's solar power proposal.
"Given California's abundant sunshine and growing economy, this program has the potential to make California the Saudi Arabia of solar power," said Bernadette Del Chiaro of San Francisco-based Environment California.