CITY OF LARKSPUR Staff Report
May 21, 2014 Council Meeting
DATE: May 16, 2014
TO: Honorable Mayor Morrison and Members of the City Council
FROM: Dan Schwarz, City Manager
SUBJECT: CONSIDERATION OF POSITIONS ON LEGISLATION
ACTION REQUESTED
Authorize Vice-Mayor Chu to sign and send the attached letters.
SUMMARY AND ANALYSIS
It is the policy of the City Council only to take positions on legislation that affect Larkspur and its interests. Further, it is the general practice of the City Council to rely upon the Legislative Committee of the Marin County Council of Mayors and Councilmembers to take positions on legislation. From time-to-time, staff and Councilmembers identify legislation that is of significant enough concern for the City Council to consider taking positions. Two such bills are presented to the Council for positions of opposition.
AB 2145 As a member of Marin Clean Energy, Larkspur has a vested interest in the success of this joint powers authority. The primary effect of this bill is to make it more difficult for new Community Choice Aggregation (CCA) entities to form and operate. The bill would also impose new requirements and burdens on existing CCAs – requirements that would increase the cost of operation relative to those of PG&E (on which such requirements would not be imposed). It is for this reason that Larkspur should oppose this bill.
AB 2188 This bill would impose new costs on Larkspur by requiring expediting processing for all solar permits. Further, this bill would eliminate the current review process for solar installations, potentially increasing risks to public health and safety by allowing for less secure installation. It is recommended that the Council oppose this bill.
CONSIDERATION OF POSITIONS ON LEGISLATION Page 2
RECOMMENDATION
Authorize Vice-Mayor Chu to sign and send the attached letters.
Respectfully Submitted,
Dan Schwarz, City Manager
Attachments 1. Info Sheet on AB2145 and MCE sheet about AB2145 2. Draft Letter of Opposition to AB2145 3. Info Sheet on AB2188 4. Draft Letter of Opposition to AB2188
May 21, 2014
The Honorable Steven Bradford, Chair, Assembly Utilities and Commerce Committee State Capitol P.O. Box 942849 Sacramento, CA 94249-0062
RE: AB 2145 (Bradford): Electricity: community choice aggregation NOTICE OF OPPOSITION
Dear Assembly Member Bradford:
On behalf of the Larkspur City Council, I am writing to express opposition to your bill, AB 2145. Enclosed is a copy of the letter of opposition from the County of Marin, which we believe provides compelling arguments against AB2145 on the basis of its affects statewide.
The Larkspur City Council opposes AB2145 because of its impacts on Marin Clean Energy (MCE), of which Larkspur is a member. Specifically, it is our understanding that AB2145 will impose reporting requirements on Community Choice Aggregation entities like MCE, including 5-year forecasts of rates and greenhouse gas emissions, without imposing the same requirements on investor-owned utilities. We are perplexed why the Legislature would wish to unlevel the playing field in such a manner. Further, we understand that AB2145 will reduce or eliminate the ability of CCAs to for many cost-saving programs for low-income residential customers and many small business customers. Eliminating such programs is detrimental to the customer and entirely unnecessary.
If you have any questions regarding the City’s position on this bill, please do not hesitate to contact City Manager Dan Schwarz at (415) 927-5018.
Sincerely,
Larry Chu, Vice-Mayor encl: as stated c: DaVina Flemings, Principal Consultant, Assembly Utilities and Commerce Committee Daryl Thomas, Consultant, Assembly Republican Caucus Martha Guzman, Deputy Legislative Secretary, Governor’s Office
April 15, 2014
The Honorable Steven Bradford Chair, Assembly Utilities and Commerce Committee State Capitol, P.O. Box 942849 Sacramento, CA 94249-0062
Re: AB 2145 (Bradford): Electricity: Community Choice Aggregation – OPPOSE
On behalf of the County of Marin, I write to voice our strong opposition to the Monopoly Protection Bill, AB 2145. The proposed legislation limits community choice, violates the original intent of AB 117, thwarts California’s environmental goals, infringes upon local government decision-making, and is unnecessary. Today the County of Marin is releasing results of the Marin Climate Action Plan which show that the changes to electric supply in our community made possible by MCE service have allowed the county to achieve community GHG reduction targets for 2020 fully eigght years ahead of schedule. The MCE program will also save customers over $5 million this year alone.
We believe residential customers in Caalifornia should have the opportunity to choose an alternate utility provider. AB 117, which authorized Community Choice Aggregation in California, intentionally structured CCAs as an opt-out program with the goal of leveling the playing field for CCAs who might atttempt to enter a monopoly market so there could be a viable choice for customers. AB 2145 restricts choice.
A CCA opt-in program would not allow ffor the dramatic increase in renewable energy purchases and greenhouse gas emission reductions that are present throughout the planning and implementation stages of CCAs throughout California. Marin Clean Energy provides more than twice as much renewable energy as PG&E, and MCE’s most recent published emissions rate is 19% lower tthan PG&E. Defaulting customers to a utility provider with a higher emissions rate runs counter to AB 32 goals and would undermine California’s climate change prevention iinitiatives. AB 2145 also infringes upon local government decision-making, representing a repeat attack on CCAs similar tto that of Proposition 16, a PG&E-funded initiative that failed in 2010.
Finally, the Monopoly Protection Bill is unnecessary since customers can easily make a choice when a CCA begins offering service in a new community. There is a four month public noticing process with a state requuirement of at least four opt-out notices served upon every customer. Customers can easily opt out during or after the public noticing process. There is no such requirement for customers of for-profit utility companies.
We urge you to oppose AB 2145 and to support community choice.
Respectfully Submitted,
Kathrin Sears, President Marin County Board of Supervisors cc: Honorable Assembly Member Marc Levine Members, Assembly Utilities and Commerce Committee AB 2145: The Monopoly Protection Bill’s Impact on Community Choice
Assembly Bill 2145 (Bradford – D), aims to smother local clean energy initiatives to favor monopoly utility corporations that should be focusing on energy distribution and safety.
Dubbed by businesses and environmentalists alike as the ‘Monopoly Protection Bill’, AB 2145 seeks to lock in the status quo of the State’s three largest, private energy corporations—Pacific Gas & Electric (PG&E); Southern California Edison (SCE); and San Diego Gas & Electric (SDG&E)—as monopoly energy providers even in communities that have taken action to form local, public power agencies that offer renewable energy alternatives, lower rates, and new jobs.
AB 117: Community Choice Aggregation
Under existing State law, AB 117, California cities, counties, and special districts can pool their constituents’ demand for energy, and buy energy wholesale from resources outside the control of the private monopolies. These small, public power agencies—known as community choice aggregators (CCAs)—supply their own, individually-sourced energy to the existing distribution lines on behalf of their customers. An active CCA becomes the default providers of service, meaning that customers automatically start service with CCAs unless they choose to opt out. Customers are notified of the new choice for a local service provider through four legally required mailers.
Historically, investor-owned utilities (IOUs) have been the default service provider to customers in their jurisdictions. However, this default status was transferred from the IOUs to the local CCA, if a CCA exists in the community. The original CCA legislation, seeing the wisdom of collective community action, mandated that the customers residing in the service area would automatically be enrolled, unless they chose not to participate by opting out.
AB 2145 Proposes to Eliminate Competition & Consumer Choice
AB 2145 proposes to steal the default service from CCAs and place it with the IOUs, protecting their monopoly status and destroying any opportunity for competition. Placing the default status with IOUs would prevent new CCA programs from forming and consequently prevent opportunities for consumer choice, decrease clean energy investments, and limit options for competitive rates and new job creation.
AB 2145 would result in enormous increases in marketing expenses for nascent agencies. The only collateral a CCA has is the customer base created by the opt-out mechanism. Without collateral, power cannot be purchased, and without a power purchase agreement, rates cannot be developed or advertised, meaning that CCAs could not offer service.
AB 2145 would shift the default service from a lower greenhouse gas emission option to a higher greenhouse emission option, running contrary to local and state environmental policies.
AB 2145 would terminate opportunities for customer cost savings offered by CCA programs, including low income residents and small business owners. AB 2145 Proposes Unrealistic Forecasting
AB 2145 proposes that the CCA provide all customers with rate and greenhouse gas emission information for five years of service into the future. No such requirements are imposed on the IOUs and due to the real-time nature of IOU rate approvals, a forecast of rates is not available. Due to the time-lag associated with usage calculations and greenhouse gas emissions verification, forecasted greenhouse gas emissions are not available to customers.
Accurately forecasting future power sources to determine greenhouse gas emissions and rates, is unreasonable because of the fluctuating nature of the electricity market. For example, if an electricity provider had projected getting 20% of its power from hydroelectricity, that provider would fall dramatically short this year due to the lack of rainfall. CCAs and IOUs continuously solicit bids for new power purchases. There is no way to know in advance what types of power those bids will contain and what the rates will be.
MCE supports customer disclosures and frequently exceeds requirements for discloses. IOUs and CCAs are already legally required to send mailers to all customers in a CCA service area once a year which includes direct comparisons of current rates and electric power generation mixes. The only currently operational CCA programs, Marin Clean Energy and Sonoma Clean Power, both also include comparisons of greenhouse gas emissions on this mailer. IOUs and CCAs should be treated equally when it comes to rate and greenhouse gas emissions forecasting to ensure a competitively fair landscape.
Opposing AB 2145 Protects Jobs, Cost Savings, Renewable Energy, and Community Choice
Ultimately, CCAs give our communities the option to choose alternative sources of power and create competition in business. CCAs create demand for new renewable power sources resulting in new local jobs, greenhouse gas emissions reductions, and quite often, lower rates for customers. The future of who has the power in California—corporate monopolies or local communities—will depend on what happens next to the Monopoly Protection Bill, which would be detrimental to community choice.
Nearly 100 (and counting) local governments, organizations, and businesses have opposed AB 2145, including: The Cities of: Benicia, Cupertino, Fairfax, Hayward, Lancaster, Menlo Park, Mountain View, Richmond, San Carlos, San Pablo, Santa Cruz, and Sunnyvale; The Counties of: Alameda , Los Angeles, Marin, Monterey, San Benito, Santa Cruz, and Sonoma; 350 Santa Barbara; Alliance for Retail Energy Markets; Asian Pacific Environmental Network; Bay Area Air Quality Management District (BAAQMD); California State Association of Counties; Communities for a Better Environment; Greenlining Institute; Kyoto USA; League of California Cities; Office of Ratepayer Advocates (CPUC); Pacific Energy Advisors; Panasonic Eco Solutions North America (PESNA); Regional Climate Protection Authority; Retail Energy Supply Association (RESA); Richmond BUILD; San Diego Energy District Foundation; San Francisco Local Agency Formation Commission; San Luis Obispo Clean Energy; School Project for Utility Rate Reduction; Shell Energy of North America; Sierra Club of California; Solar Energy Industries Association (SEIA); South San Joaquin Irrigation District; The Utility Reform Network (TURN); Westcoast Solar Energy; Western Power Trading Forum; World Wildlife Fund US.
MCE Fact Sheet Proponents of AB2145 have used misinformation to influence the decision-making process. This document provides detailed, fact-based information about MCE, a California Community Choice Aggregation (CCA) program. The contents reflect information filed with, and where applicable, verified by, operational and regulatory bodies in the state including the California Public Utilities Commission (for public noticing, public disclosures, and Renewable Portfolio Standard compliance), the California Energy Commission (for Resource Adequacy compliance), the California Independent System Operator (for procurement, load and usage verification), and the Center for Resource Solutions/Green-E (for reporting of voluntary renewable purchases).
In just 4 years of operations, MCE has received many awards for its success in building California based renewable power, reducing greenhouse gas emissions, and passing cost- savings along to customers.
MCE rates are lower than the monopoly utility. MCE customers are expected to save $5.9 million in 2014.
MCE’s greenhouse gas emissions rate is 19% lower than the monopoly utility. The emissions rate for both parties uses a methodology approved by The Climate-Registry, and using most recent 2012 data for both parties, measured in lbs CO2e/MWh:
PG&E MCE Light Green MCE Deep Green 19% Renewable 50% Renewable 100% Renewable 445 380 0
MCE exceeds compliance with the CA Renewable Portfolio Standard. This is confirmed by data filed with the CPUC for 2012 for both parties:
PG&E RPS MCE RPS 19% 29%
Note: MCE exceeds State mandates for California certified renewable purchases by 9%. In addition to exceeding these State requirements, MCE voluntarily purchases unbundled Renewable Energy Credits. This stimulates additional renewable growth, beyond the RPS metric. MCE Creates Jobs in California MCE currently employs 20 individuals from in and around the communities we serve. MCE also contracts with services from local providers in accounting services, information technology, legal services, catering services and energy efficiency. MCE currently has contracts with 34 local vendors and 20 non-local vendors. MCE has worked with RichmondBUILD and the Marin City Community Development Corporation to identify candidates for job openings. MCE is joining with RichmondWorks on a new solar installation that will employ local residents under the Richmond Local Hire Ordinance.
Through power purchase agreements, MCE is creating jobs for solar installations throughout California. A 30 megawatt solar project from MCE is being built in Kings County under a project labor agreement that will employ many unionized workers. MCE will purchase power from this project under a 20 year long-term agreement.
For MCE’s first local Feed-In Tariff project, over 20 people were employed for a three month period to build the solar installation. Many of the individuals employed were from the job training program of the Marin City Community Development Corporation, a local job training program for low-income individuals.
MCE is working on 7 specific local renewable projects, and three broad-based programs that grow local distributed renewable energy within our service territory:
1 MW - 3 MW Solar installation at the Richmond Port (phase one will be 1 MW, with future phases growing the project to 3 MW) – land lease being finalized with the City of Richmond. Expected completion: Q3, 2015
1 MW Solar Carport shade structure at a large non-profit organization in Novato. This project is already under contract under a 20-year PPA, and will be on-line in 12 months. Expected completion: Q2, 2015
2 MW Solar Installation at a brownfield site in Richmond – land lease being finalized. Expected completion: Q2, 2016
4 MW Landfill Waste to Energy project a local landfill in Marin County. Power Purchase Agreement in process Q1, 2016
9 MWs of capacity are left in MCE’s Feed-in Tariff for additional renewable installations beyond those listed above. Three project developers have requested a place on the reservation list and are finalizing documents for their projects which are in three separate locations in MCE service territory. After applications are complete, these projects would become part of MCE’s portfolio under a 20 year PPA. Expected completion: 1 MW per year in 2014, 2015, 2016, etc.
MCE has over 2,000 net-energy metering customers producing solar on their own homes and businesses. MCE pays them $0.01 per kWh for any over generation the customer creates. Expected completion: ongoing
MCE recently issued $20,000 in solar rebates but set aside 50% for Richmond customers only, and also reserved any rebate request for low income (CARE-qualifying) customers only for the first four months of the solar rebate program. MCE partnered with Grid Alternatives to help ensure low income installations were used, and achieved strong success with multiple low income installations. Expected completion: complete
MCE exceeds the state mandates for public disclosures and allows customer to opt out of service at any time. MCE has held hundreds of public meetings and participates in community based events on an ongoing basis to share information with customers. MCE contacts new customers by mail multiple times with letters and enrollment notices addressed directly to the customer. For existing customers, a power content label is distributed annually and a joint cost comparison and power content comparison is also published jointly on an annual basis by PG&E and MCE, and mailed to all customers in MCE’s service territory.
May 21, 2014
The Honorable Al Muratsuchi California State Assembly State Capitol, Room 4117 Sacramento, CA 95814
RE: AB 2188 (Muratsuchi) Solar Permits (as amended May 5, 2014) NOTICE OF OPPOSITION
Dear Assembly Member Muratsuchi:
On behalf of the Larkspur City Council, I am writing to express opposition to your bill, AB 2188. This measure would, among other things, require cities and counties to adopt a new, costly ordinance that would essentially create a separate and unequal permitting and inspection process specifically for residential solar installations of less than 10 kilowatts.
While we remain supportive of expanding access to renewable energy resources, including residential solar, we do not believe that the rigid solar permit and inspection process as mandated in AB 2188 is the right approach. Requiring every local jurisdiction to uniformly issue solar permits and inspect solar installations within five days of the request would be very problematic and costly for many local governments still recovering from the historic economic downturn. A local jurisdiction’s ability to process a permit application and complete an inspection in an expedited manner is largely driven by available funding and trained staff.
It should also be noted that AB 2188 could pose a threat to public safety. Amendments taken in the Assembly Local Government Committee on April 30, 2014 completely eliminate the review process for solar permits and instead require local jurisdictions to issue the permit in a ministerial manner upon receipt of a completed application. Eliminating the permit review process would prohibit cities from involving their fire department or utility department in the permit approval process, thus removing a jurisdiction’s ability to verify that no fire hazards are present and the installation complies with all applicable fire codes.
Building permits and inspections are required by state law, regulations, and local ordinances to help ensure public safety. By enforcing these laws, local governments essentially act as a consumer protection agency. AB 2188 could jeopardize this proven process by forcing cities and counties to potentially overlook shortcomings in solar permit applications or installations in order to comply with the bill’s highly restrictive approval timeline. Additionally, AB 2188 would require cities to provide those seeking solar permits a higher level of service presently unavailable to all other permit seekers, creating an unequal permit playing field.
If you have any questions regarding the City’s position on this bill, please do not hesitate to contact City Manager Dan Schwarz at (415) 927-5018.
Sincerely,
Larry Chu, Vice-Mayor cc: Chair and Members, Assembly Committee on Appropriations Jennifer Galehouse, Principal Consultant, Assembly Committee on Appropriations William Weber, Consultant, Assembly Republican Caucus
AB 2188 Page 1
Date of Hearing: April 30, 2014
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT K.H. "Katcho" Achadjian, Chair AB 2188 (Muratsuchi) – As Amended: April 21, 2014
SUBJECT: Solar energy: permits.
SUMMARY: Requires every city and county to create an expedited permitting and inspection process for small, residential solar energy systems, alters the definition of what is a reasonable restriction on a solar energy system, and makes additional changes to the Solar Rights Act. Specifically, this bill:
1) Requires, on or before September 30, 2015, every city, county, or city and county to adopt an ordinance that creates an expedited, streamlined permitting process for small residential rooftop solar energy systems, consistent with the goals and intent of existing law governing the implementation of statewide standards to achieve timely and cost-effective installation of solar energy systems (commonly referred to as the Solar Rights Act).
2) Requires each city, county, or city and county, in developing an expedited permitting process, to adopt a checklist of all requirements with which small rooftop solar energy systems shall comply to be eligible for expedited review.
3) Requires an application that meets the requirements in the checklist specified in 2), above, to be reviewed within 24 business hours if submitted during business hours. If submitted after business hours, such an application must be reviewed within 24 business hours of the beginning of the next business day after submittal of the application.
4) Requires the checklist specified in 2), above, and required permitting documentation to be published on a publically accessible Internet Web site.
5) Requires a city, county, or city and county to allow for electronic submittal of a permit application and associated documentation, and to authorize the electronic signature on all forms, applications, and other documentation in lieu of a wet signature by an applicant.
6) Requires a city, county, or city and county, in developing the ordinance specified in 1), above, to strive to conform with standardized checklists based on existing statewide solar permitting guidelines or best practices, including those developed through the United States Department of Energy’s SunShot Initiative.
7) Requires, for a small residential rooftop solar energy system eligible for expedited review, only one inspection and requires that one inspection to be scheduled within two business days of a request, if the request is received during business hours. If the request is received after business hours, the inspection must be scheduled within two business days of the beginning of the next business day after receipt of the request. If a city, county, or city and county is unable to provide inspection within two business days of a request, the city, county, or city and county may authorize a third-party inspection, using a qualified or certified
AB 2188 Page 2
inspector. If the small residential rooftop solar energy system fails inspection, a subsequent inspection shall also conform to the requirements of this provision.
8) Prohibits a city, county, or city and county from conditioning approval for any solar energy system permit on the approval of a solar energy system by a nonprofit corporation or unincorporated association created for the purpose of managing a common interest development (CID).
9) Specifies that the Solar Rights Act shall apply to every city in this state, including charter cities.
10) Requires a finding, based on substantial evidence, before a city or county may require application for a use permit for a solar energy system, rather than the existing law requirement of a good faith belief.
11) Provides that existing law requiring a solar energy system to meet applicable health and safety standards and requirements imposed by state and local permitting authorities shall be consistent with the Solar Rights Act.
12) Requires every solar energy system for heating water to be certified by an accredited listing agency as defined by this bill, rather than the Solar Rating Certification Corporation (SRCC) or other nationally recognized certification agencies, and deletes language requiring the certification to be for the entire solar energy system and installation.
13) Provides, for the purposes of reasonable restrictions on solar energy systems in covenants, conditions or restrictions (CC&Rs) contained in specified instruments affecting the sale or transfer of real property, that for solar domestic water heating systems or solar swimming pool heating systems that comply with state and federal law, “significantly” means an amount exceeding 10% of the cost of the system, but in no case more than $1,000, or decreasing the efficiency of the solar energy system by an amount exceeding 10%, as originally specified and proposed.
14) Provides, for the purposes of reasonable restrictions on solar energy systems in CC&Rs contained in specified instruments affecting the sale or transfer of real property, that for photovoltaic systems that comply with state and federal law, “significantly” means an amount not to exceed $1,000 over the system cost as originally specified and proposed, or a decrease in system efficiency of an amount exceeding 10% as originally specified and proposed.
15) Reduces, from 60 days to 30 days, the period during which an application required by CC&Rs for the installation or use of a solar energy system shall be deemed approved, unless that delay is the result of a reasonable request for additional information.
16) Defines “Accredited listing agency” to mean a standards or testing organization that evaluates solar energy systems according to specified, independent criteria and allows its mark to be used on qualifying systems as a stamp of approval, such as the American National Standards Institute or the American Association for Laboratory Accreditation.
17) Defines “Electronic submittal” to mean the utilization of Email, the Internet, or facsimile. AB 2188 Page 3
18) Defines “Small residential solar energy system” to mean all of the following:
a) A solar energy system that is no larger than 10 kilowatts alternating current nameplate rating or 30 kilowatts thermal;
b) A solar energy system that conforms to all applicable state fire, structural, electrical, and other building codes as adopted or amended by the city, county, or city and county and specified provisions of existing law, as specified.
c) A solar energy system that is installed on a single or duplex family dwelling; and,
d) A solar panel or module array that does not exceed the maximum legal building height.
19) Provides that, if a conflict arises between law governing the implementation of statewide standards to achieve timely and cost-effective installation of solar energy systems, including the requirements of this bill, and any requirements in state fire, electrical, structural, or building codes, the requirements of this bill and existing law shall apply.
20) Makes updating and conforming changes.
21) Finds and declares that:
a) In recent years, the state has both encouraged the development of innovative distributed generation technology and prioritized the widespread adoption of solar power as a renewable energy resource through programs such as the California Solar Initiative;
b) Rooftop solar energy is a leading renewable energy technology that will help this state reach its energy and environmental goals;
c) To reach the state’s Million Solar Roofs goal, hundreds of thousands of additional rooftop solar energy systems will need to be deployed in the coming years;
d) Various studies, including one by the Lawrence Berkeley National Laboratory, show that, despite the 1978 California Solar Rights Act, declaring that the “implementation of consistent statewide standards to achieve the timely and cost-effective installation of solar energy systems is not a municipal affair ... but is instead a matter of statewide concern,” the permitting process governing the installation of rooftop solar energy systems varies widely across jurisdictions and, contrary to the intent of the law, is both an “obstacle” to the state’s clean energy and greenhouse reduction goals and a “burdensome cost” to homeowners, businesses, schools, and public agencies;
e) The United States Department of Energy, through its SunShot Initiative, has distributed millions of dollars in grants to local and state governments, including California jurisdictions, and nonprofit organizations to reduce the costs of distributed solar through streamlined and standardized permitting; and,
AB 2188 Page 4
f) A modernized and standardized permitting process for installations of small-scale solar distributed generation technology on residential rooftops will increase the deployment of solar distributed generation, help to expand access to lower-income households, provide solar customers greater installation ease, improve the state’s ability to reach its clean energy goals, and generate much needed jobs in the state, all while maintaining safety standards.
EXISTING LAW:
1) Provides that the implementation of consistent statewide standards to achieve the timely and cost-effective installation of solar energy systems is not a municipal affair, as that term is used in the California Constitution, but is instead a matter of statewide concern.
2) Provides that it is the intent of the Legislature that local agencies not adopt ordinances that create unreasonable barriers to the installation of solar energy systems, including, but not limited to, design review for aesthetic purposes, and not unreasonably restrict the ability of homeowners and agricultural and business concerns to install solar energy systems.
3) Provides that it is the policy of the state to promote and encourage the use of solar energy systems and to limit obstacles to their use, and that it is the intent of the Legislature that local agencies comply not only with specified provisions of law, but also the legislative intent to encourage the installation of solar energy systems by removing obstacles to, and minimizing costs of, permitting for such systems.
4) Requires a city or county to administratively approve applications to install solar energy systems through the issuance of a building permit or similar nondiscretionary permit.
5) Requires review of an application to install a solar energy system to be limited to the building official’s review of whether it meets all health and safety requirements of local, state, and federal law.
6) Requires the requirements of local law to be limited to those standards and regulations necessary to ensure that the solar energy system will not have a specific, adverse impact upon the public health or safety.
7) Allows a city or county to require an applicant for the installation of a solar energy system to apply for a use permit if the building official of the city or county has a good faith belief that the solar energy system could have a specific, adverse impact upon the public health and safety.
8) Prohibits a city or county from denying an application for a use permit to install a solar energy system unless it makes written findings based upon substantial evidence in the record that the proposed installation would have a specific, adverse impact upon the public health or safety, and there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact. The findings must include the basis for the rejection of potential feasible alternatives of preventing the adverse impact.
9) Allows the decision of the building official regarding building or use permits for solar energy systems to be appealed to the planning commission of the city or county. AB 2188 Page 5
10) Requires any conditions imposed on an application to install a solar energy system to be designed to mitigate the specific, adverse impact upon the public health and safety at the lowest cost possible.
11) Requires a solar energy system to meet applicable health and safety standards and requirements imposed by state and local permitting authorities.
12) Requires a solar energy system for heating water to be certified by the SRCC or other nationally recognized certification agency, as specified, and requires the certification to be for the entire solar energy system and installation.
13) Declares that any covenant, restriction, or condition contained in any deed, contract, security instrument, or other instrument affecting the transfer or sale of, or any interest in, real property, and any provision of a governing document, as specified, that effectively prohibits or restricts the installation or use of a solar energy system is void and unenforceable.
14) Provides that the provisions of 13), above, do not apply to provisions that impose reasonable restrictions on solar energy systems. However, it is the policy of the state to promote and encourage the use of solar energy systems and to remove obstacles thereto. Accordingly, reasonable restrictions on a solar energy system are those restrictions that do not significantly increase the cost of the system or significantly decrease its efficiency or specified performance, or that allow for an alternative system of comparable cost, efficiency, and energy conservation benefits.
15) Provides that, for solar domestic water heating systems or solar swimming pool heating systems that comply with state and federal law, “significantly” means an amount exceeding 20% of the cost of the system or decreasing the efficiency of the solar energy system by an amount exceeding 20%, as originally specified and proposed.
16) Provides that, for photovoltaic systems that comply with state and federal law, “significantly” means an amount not to exceed $2,000 over the system cost as originally specified and proposed, or a decrease in system efficiency of an amount exceeding 20%, as originally specified and proposed.
17) Requires, whenever approval is required by CC&Rs for the installation or use of a solar energy system, the application for approval shall be processed and approved by the appropriate approving entity in the same manner as an application for approval of an architectural modification to the property, and shall not be willfully avoided or delayed. If an application is not denied in writing within 60 days from the date of receipt of the application, the application shall be deemed approved, unless that delay is the result of a reasonable request for additional information.
FISCAL EFFECT: This bill is keyed fiscal.
COMMENTS:
1) Purpose of this bill. This bill requires every city and county to create an expedited permitting and inspection process for small, residential solar energy systems, alters the definition of AB 2188 Page 6
what is a reasonable restriction on a solar energy system, and makes additional changes to the Solar Rights Act. The major provisions of this bill include:
a) A 24-hour turnaround on permit applications for small, residential rooftop solar energy systems;
b) A two-day turnaround on inspections for these systems, with a limit of only one inspection; c) Requiring a finding, based on substantial evidence, before a city or county may require a use permit for a solar energy system, rather than the existing law requirement of a good faith belief; and,
d) Reducing the threshold under which restrictions on solar energy systems are considered reasonable under CC&Rs, and reducing, from 60 days to 30 days, the period during which an application required by CC&Rs for the installation or use of a solar energy system shall be deemed approved, unless that delay is the result of a reasonable request for additional information.
This bill also contains a number of conforming and updating changes. The provisions of this bill would apply to all cities and counties in California, including charter cities. This bill is author-sponsored.
2) Author's statement. According to the author, "Currently, California’s solar permitting structure is a patch work of various regulations and requirements that vary from city to city and county to county. This results in a lack of certainty and hinders the ability of companies to scale and reduce costs. Requirements in one city can differ drastically from a neighboring city even though the same solar system is being installed on a similar home.
"Several jurisdictions, such as the City of Los Angeles, San Jose, Richmond, Oakland, and San Diego County have already developed streamlined permitting requirements for small residential projects that meet certain criteria. These local governments have demonstrated that we can reduce permitting timeframes while maintaining important safety protections.
"By improving the efficiency of solar permitting statewide, AB 2188 will help lower the cost of solar installations and further expand the accessibility of solar to more California homeowners who want to control their electricity bills and generate their own clean energy. In addition, making solar more affordable will help the state reach its renewable energy and greenhouse gas reduction goals, and create more jobs while maintaining the safety of solar systems."
3) Background. The California Legislature enacted the Solar Rights Act in 1978 to protect a homeowner’s right to install a solar energy system by limiting a homeowner association's (HOA) ability to object to such installations through its CC&Rs. The Solar Rights Act allows CC&Rs to include provisions that impose reasonable restrictions on solar energy systems. Reasonable restrictions include those that: do not significantly increase the cost of the solar system; do not significantly decrease the system’s efficiency or specified performance; and, allow for an alternative system of comparable cost, efficiency and benefits. "Significant" is further defined as those restrictions that increase the system’s cost by more than 20% or decrease the system’s efficiency by more than 20%. AB 2188 Page 7
AB 2473 (Wolk), Chapter 789, Statutes of 2004, updated the Solar Rights Act by specifying standards for what constitutes "significant" increases in solar energy system costs or decreases in those systems' efficiency. The bill also declared that solar energy system installation is a matter of statewide concern, and made a local government's grant of permission to install a solar energy system ministerial rather than discretionary unless the permitting agency has good cause to believe doing so would create an adverse impact on public health or safety, in which case an application for a discretionary permit may be required. The local government cannot refuse to approve that application unless it makes detailed written findings based on substantial evidence that granting the permit will create specific adverse impacts on public health or safety. If conditions are placed on an approval to mitigate public health or safety impacts, the required mitigation must be designed to accomplish its goal at the lowest possible cost.
4) Solar Energy Initiative: In 2005, the California Public Utilities Commission through regulations established subsidy programs for the installation of solar photovoltaic systems (PV) administered by the California Energy Commission. These programs, known collectively as the California Solar Initiative (CSI), provide $3.2 billion in subsidies through rebates for the installation of photovoltaic projects. In 2006, the Legislature passed SB 1 (Murray), Chapter 132, Statutes of 2006, the Governor's Million Solar Homes Program, which established the goal of installing 3,000 megawatts of solar generation capacity, establishing a self-sufficient solar industry, and placing PV systems on 50% of new homes in 13 years.
5) Previous legislation. AB 1801 (Campos), Chapter 538, Statutes of 2012, prohibited a city or county from basing the calculation of a permit fee for the installation of a solar energy system on the valuation of the system, or any other factor not directly associated with the cost to issue the permit, and required the city or county to separately identify each fee assessed on the applicant for the installation of the system on the invoice provided to the applicant.
SB 1222 (Leno), Chapter 614, Statutes of 2012, placed a cap on the amount of permit fees charged by a city or county for both residential and commercial rooftop solar energy systems, unless a city or county makes written findings and adopts a resolution or ordinance providing substantial evidence of the reasonable cost to issue the permit and why the cost exceeds the specified caps.
AB 1892 (Smyth), Chapter 40, Statutes of 2008, provided that a prohibition or restriction on the installation or use of a solar energy system in any of the governing documents of a CID is void and unenforceable.
AB 2180 (Lieu), Chapter 539, Statutes of 2008, required an HOA in a CID to respond to a request from a member to install a solar energy system in his/her separate interest within 60 days.
AB 2473 (Wolk), Chapter 798, Statutes of 2004, required cities and counties to permit the installation of solar energy systems if the system meets specified requirements, and redefined the term “significantly” in regard to restrictions on solar systems that raise costs or decrease efficiency.
AB 2188 Page 8
6) Arguments in support. The California Solar Energy Industries Association, in support, states, "Permitting at the local level in California is a patchwork quilt of rules, requirements and timelines that differ within as well as between, the hundreds of jurisdictions in the state. Although the solar industry has greatly standardized the equipment of rooftop solar systems – meaning a residential system installed in Sacramento is basically identical to the system installed in Palm Springs – the rules and procedures can vary wildly from one city to another. As a result, solar companies have to employ cadres of staff whose job is solely to keep up with the various rules and regulations needed to essentially permit the same solar system. "According to a recent Lawrence Berkeley Labs (LBL) study, the time delays and procedural variations associated with the issuance of building permits keeps the installed price of solar higher than it should be. These higher prices frustrate the ability of installers to achieve economies of scale and prevents solar from becoming more affordable. Specifically, LBL reports that streamlined permitting practices at the city level can reduce the cost of residential solar systems by $1,350-$3,850 for the average 5 kW system.
"Further adding to the cost of solar power, permitting and inspection timelines can be long. While it can take just one day to install a small residential solar system, it can take up to two months in some situations to just get through the initial permitting process, not to mention to get inspected. Again, LBL’s research suggests that the best permitting practices can shorten development times by 24 days.
"The time delays associated with permitting create a unique cost burden on the industry. This is because unlike many other permitted projects (HVAC, new roof, etc.), solar systems cannot be interconnected to the grid until a permit is issued by the local jurisdiction. The solar installer won’t even contact the local utility company until the permit has been issued. Unlike a new roof or an HVAC system that can be used and useful while waiting for a permit, the solar system just sits there on the customer’s roof, unable to generate a single electron.
"Last but not least, the barriers in some local jurisdictions can also create a market barrier for consumers interested in going solar. There are some jurisdictions that make it so difficult to get a permit that solar contractors simply refuse to do business there."
7) Arguments in opposition. The League of California Cities, in opposition, writes, "While we remain supportive of expanding access to renewable energy resources, including residential solar, we do not believe that the rigid solar permit and inspection process as mandated in AB 2188 is the right approach. Requiring local jurisdictions to uniformly issue solar permits in an “over the counter” fashion within 24 hours and inspect solar installations within two days of the request would be very problematic for many local governments still recovering from the historic economic downturn. A local jurisdiction’s ability to process a permit application and complete an inspection in an expedited manner is largely driven by available funding and trained staff. Furthermore, many municipalities still impose mandatory furloughs on Fridays, which limit their ability to provide services under a specified timeline.
"It should also be noted that AB 2188 could pose a threat to public safety. During the permit review process, many cities perform an onsite inspection, prior to issuing the permit, to ensure structural soundness. This most often occurs when a city lacks adequate building records of the dwelling. AB 2188, as amended April 21, 2014, would limit a city to one inspection, thus essentially prohibiting a city from visually inspecting a dwelling prior to AB 2188 Page 9
installation. Additionally, due to this measure’s 24 hour permit approval mandate, local fire departments may no longer have the ability to participate in the “plan check” phase of the permit approval process to verify that no fire hazards are present and the installation complies with all applicable fire codes.
"Building permits and inspections are required by state law, regulations, and local ordinances to help ensure public safety. By enforcing these laws, local governments essentially act as a
consumer protection agency. AB 2188 could jeopardize this proven process by forcing cities and counties to potentially overlook shortcomings in solar permit applications or installations in order to comply with the bill’s highly restrictive approval timeline."
8) Committee amendment. In order to maintain consistency with identical provisions in the Health and Safety Code, remove redundancies, and correct drafting errors, the Committee may wish to adopt the following amendments:
a) Amend Health and Safety Code section 17959.1 to conform to the provisions of this bill.
b) On page 6, in lines 35 and 36, delete "therefore, this section shall apply to every city in this state, including charter cities"
c) On page 10, in lines 2-5, delete "If a conflict arises between the requirements in this section and any requirements in state fire, electrical, structural, or building codes, the requirements in this section shall apply."
REGISTERED SUPPORT / OPPOSITION:
Support
1st Light Energy Arise Solar ASI Hastings, Inc. Aztec Solar, Inc. BMC Solar Booth Construction Brightline Defense Project California League of Conservation Voters California Solar Energy Industries Association Chico Electric City of Oakland Clean Power Finance Clean Solar Cobalt Power Systems Commission on the Environment of the City and County of San Francisco Cosmic Solar, Inc. Delta Solar Electric, Inc. Enphase Energy Environment California
AB 2188 Page 10
Support (continued)
Environmental Defense Fund FAFCO, Inc. Freedom Solar HelioPower Home Energy Systems, Inc. Horizon Solar Power Hot Purple Energy Insoltech Solar Luminalt Marin Clean Energy Mayor Gayle McLaughlin, City of Richmond Mayor Tom Bates, City of Berkeley Oakland Metropolitan Chamber of Commerce One Block Off the Grid Presente.org Real Goods Solar Renova Energy Corp. Rising Sun Energy Center Sierra Club California Sierra Pacific Home & Comfort, Inc. Skyline Innovations Solar Census Solar Energy Industries Association Solar Roof Dynamics Solar Universe, Inc. SolarCity SolarCraft Solartronics Sonoma Clean Power Spectrum Energy Development, Inc. Stellar Solar Sullivan Solar Power Sun Light & Power Sun Pacific Solar Electric, Inc. Suncrest Solar Sungevity Sunrun TerraVerde Renewable Partners Unique Solar Vote Solar Westcoast Solar Energy Zep Solar Individual letters (8)
AB 2188 Page 11
Opposition
American Planning Association, California Chapter California Association of Electrical Workers California Building Officials California Coalition of Utility Employees California Fire Chiefs Association California Municipal Utilities Association California State Association of Counties California State Pipe Trades Council Cities of Beaumont, Lompoc and Thousand Oaks County of Orange Elevator Constructors Union Fire Chiefs Association of Santa Barbara County League of California Cities Northern California Power Agency Rural County Representatives of California Urban Counties Caucus Western States Council of Sheet Metal Workers
Analysis Prepared by: Angela Mapp / L. GOV. / (916) 319-3958