07.14.10: PUC Acts to Suspend School Solar Incentives
By David Walrath
On Friday, the California Public Utilities Commission acted to suspend governmental and non-profit solar projects from rebates through the California Solar Initiative. This was an unexpected action that will put a chill on school solar energy projects and lessen California’s progress toward green energy. If your school district was contemplating a solar energy project or had initiated a project expecting initiative rebates, please write to all of the Commissioners and let them know how a repeal of the rebates will affect your project and why school rebates need to be restored.
California Public Utilities Commission
505 Van Ness Avenue
San Francisco, CA 94102
President Michael R. Peevey
Commissioner Dian Grueneich
Commissioner John Bohn
Commissioner Timothy Alan Simon
Commissioner Nancy E. Ryan
Following is the letter sent by the Small School Districts' Association:
July 14, 2010
President Michael R. Peevey
California Public Utilities Commission
505 Van Ness Avenue
San Francisco, CA 94102
Dear President Peevey:
The Small School Districts’ Association (SSDA) is writing to request that the California Public Utilities Commission (PUC) restore solar rebate incentives for school districts. Statewide California school districts have initiated, or are initiating, solar projects with the expectation there will be rebates to help fund these projects. These school districts are bonding and borrowing to provide the infrastructure investment funds needed to generate clean energy that will help meet AB 32 goals.
School districts already have taken a 20% cut in their revenues through state action based on the state’s fiscal situation. Suspending or eliminating solar incentives will increase the fiscal pressures on school districts. Already, almost 20% of California’s school districts are facing the potential inability to meet payroll after the next school year. School districts are making drastic cuts and using reserves to attempt to make it through to 2011-12. All of the current fiscal pressures will be exacerbated by the Commission’s actions to make energy generation a new higher unexpected cost in their constrained fiscal situation.
School districts are facing up to $2.5 billion in state aid deferrals at any time during the fiscal year starting July 1, 2010. The possible deferrals add fiscal uncertainty. The uncertainty adds to the necessity for school districts to be prudent in commitments to capital projects. Part of school district prudence is to ensure the new solar energy projects will be financially sound. The California solar initiatives were part of that financial soundness calculation of findings.
The unexpected and chilling action by the PUC to suspend the initiative for governmental and non-profits will create even more uncertainty and less likelihood that school districts will commit to future solar energy projects. School districts need to have some minimum reliance on the state in order to commit their school district resources. The July 9, 2010 PUC action means that school districts can no longer consider possible rebates. Consequently many school districts will suspend current and future projects.
Suspending and possibly terminating the solar initiative rebates can result in fewer solar construction jobs. As schools put projects “on hold” they will not be signing construction contracts. California needs to create new jobs. The CPUC action does not help and could hurt job creation.
SSDA represents the 584 school districts with 2,500 or fewer students. Many of these school districts have been looking at solar energy generation as a means of stabilizing or reducing their energy costs. SSDA believes that the solar initiative rebates are needed by districts if they commit their resources for solar projects. SSDA encourages the Commission to restore solar rebate incentives for school districts.
Thank you for your consideration.
Sincerely,
David L. Walrath
