before the public utilities commission of the state of ... · golden gate university school of law...

BEFORETHEPUBLICUTILITIESCOMMISSION

OFTHESTATEOFCALIFORNIA

OrderInstitutingRulemakingtoDevelopa

SuccessortoExistingNetEnergyMetering

TariffsPursuanttoPublicUtilitiesCodeSection

2827.1,andtoAddressOtherIssuesRelatedto

NetEnergyMetering.

Rulemaking14-07-002

(FiledJuly10,2014)

JOINTPROPOSALBYTHECALIFORNIAHOUSINGPARTNERSHIP,CALIFORNIA

ENVIRONMENTALJUSTICEALLIANCE,BRIGHTLINEDEFENSEPROJECT,NATURALRESOURCES

DEFENSECOUNCIL,ANDNATIONALHOUSINGLAWPROJECT(NONPROFITSOLAR

STAKEHOLDERSCOALITION)ONIMPLEMENTATIONOFASSEMBLYBILL693

MattSchwartz,PresidentandCEO

WayneWaite,PolicyDirector

CaliforniaHousingPartnershipCorp.

369PineStreet,Suite300

SanFrancisco,CA94104

Telephone:775-771-5550

Email:[email protected]

EddieH.Ahn,ExecutiveDirector

DiliniLankachandra,LegalFellow

BrightlineDefenseProject

1028AHowardStreet


Telephone:415-252-9700


ShanaLazerow,AttorneyforCalifornia

EnvironmentalJusticeAlliance

CommunitiesforaBetterEnvironment

120Broadway,Suite2

Richmond,CA94804

Telephone:510-302-0430x18


TovahTrimming,AttorneyforCalifornia

EnvironmentalJusticeAlliance

EnvironmentalLaw&JusticeClinic

GoldenGateUniversitySchoolofLaw

Telephone:415-369-5340,415-442-6549


JimGrow,KentQian

AttorneysforNationalHousing

LawProject

703MarketSt.,Suite2000



PeterMiller,SeniorScientist

MariaStamas,Attorney

NationalResourcesDefenseCouncil

111SutterStreet,21stfloor


Email:[email protected];[email protected]

Date:August3,2016

ii

Rulemaking14-07-002

PROPOSALFORTHEIMPLEMENTATIONOFAB693

NonprofitSolarCoalition

JointSubmission

August3,2016

TableofContents

Page

I. Introduction 4

II. ProgramFunding 10

III. ProgramEligibility 17

IV. ProgramTargeting 23

V. TenantPVAllocations 28

VI. TenantBenefits 35

VII. SolarFinancingandOwnershipStructures 43

VIII. IncentiveStructure 47

IX. LocalHiring 62

X. EnergyEfficiency 69

XI. EnergyStorage 76

XII. ProgramAdministration 89

XIII. Conclusion 97

Appendices 99

1

BEFORETHEPUBLICUTILITIESCOMMISSION

OFTHESTATEOFCALIFORNIA

OrderInstitutingRulemakingtoDevelopa

SuccessortoExistingNetEnergyMetering

TariffsPursuanttoPublicUtilitiesCodeSection

2827.1,andtoAddressOtherIssuesRelatedto

NetEnergyMetering.

Rulemaking14-07-002

(FiledJuly10,2014)

JOINTPROPOSALBYTHECALIFORNIAHOUSINGPARTNERSHIP,CALIFORNIA

ENVIRONMENTALJUSTICEALLIANCE,BRIGHTLINEDEFENSEPROJECT,NATURALRESOURCES

DEFENSECOUNCIL,ANDNATIONALHOUSINGLAWPROJECT(NONPROFITSOLAR

STAKEHOLDERSCOALITION)ONIMPLEMENTATIONOFASSEMBLYBILL693

PursuanttotheRulesofPracticeandProcedureoftheCaliforniaPublicUtilities

Commission(Commission),theCaliforniaHousingPartnershipCorporation(CHPC),California

EnvironmentalJusticeAlliance(CEJA),BrightlineDefenseProject(Brightline),theNatural

ResourcesDefenseCouncil(NRDC),andtheNationalHousingLawProject(NHLP)collectively

referredhereinastheNonprofitSolarStakeholdersCoalition,herebysubmitaJointProposalto

implementtheMultifamilyAffordableHousingSolarRoofsProgram(MultifamilySolarRoofs

Program)enactedbyAB693.

TheNonprofitSolarStakeholdersCoalitioncompriseofalargeanddiversegroupof

nonprofitorganizationsincorporatedintheStateofCaliforniathatadvocateonbehalfofthe

interestsoflowincomerenterhouseholds,low-incomeanddisadvantagedcommunities,

nonprofitmultifamilyaffordablehousingorganizationsandthoseworkingtoreduceenergy

consumptionandgreenhousegasemissionsandtocreatecleanerandhealthiercommunitiesin

California.

ThemembersoftheNonprofitSolarStakeholdersCoalitionhavecometogetherin

commoncausetodevelopandsubmitthisJointProposalforimplementingtheMultifamily

SolarRoofsProgram.Thehouseholdsandcommunitiesthatweadvocateforarethedirectand

theintendedbeneficiariesoftheAB693legislation:householdsvulnerabletorisingenergy

prices,havehighhouseholdenergycostburdens,havebeenlargelyunderservedbyCalifornia’s

renewableenergyandenergyefficiencyprograms,andoftenresideingeographicareas

2

disproportionatelyburdenedbyhighratesofpoverty,socio-economicdisadvantages,and

multiplesourcesofpollutionandotherenvironmentalriskfactors.Ourobjectiveinworking

togetheristoassisttheCommissioninmeetingitsresponsibilitiestodevelopaprogramdesign

thatsatisfiesthelegislativemandatesofAB693,respondstothelong-termenergyneedsof

low-incomerentersanddisadvantagedcommunities,andcontributestothebroaderpurposes

servedbytheimplementationoftheprogramincludingjobplacementandreducing

greenhousegasemissions.

TheJointProposalbytheNonprofitSolarStakeholdersCoalitionincludesadetailed

programdesignthatisresponsivetoeachofthequestionsandsubjectareasoutlinedinthe

AdministrativeLawJudge’s(ALJ)July8,2016ruling(ALJRuling)andadditionalareasthatare

essentialtotheimplementationoftheMultifamilySolarRoofsProgram.Firstandforemost,the

MultifamilySolarRoofsProgramisfundamentallyatransformationalprogram.TheMultifamily

SolarRoofsProgramwillpotentiallyreachoveronethirdofthepublicallysupportedaffordable

multifamilyrentalhousingmarketinCalifornia.Theprogram’sscope,whichprovidesaplatform

forintegratingenergyefficiency,solarPV,andenergystoragestrategies,willinfluencethe

energyfutureofover150,000low-incomehouseholds,andshapeenergyuseandenergycost

acrossthissegmentofthehousingmarketfordecadestocome.TheNonprofitSolar

StakeholdersCoalitionaskthatthesefactsandconsequencesrelatedtothesignificanceofthe

programbeattheforefrontoftheCommission’sdeliberations.

TheJointProposalgivesconsiderableattentiontomattersofallocatinggenerationand

economicbenefitstolow-incometenants,therequirementforgeographicdiversityandspecial

effortsneededtoaddresstheneedsofCalEnvironScreendisadvantagedcommunities(DACs),

theintegrationofenergyefficiencygoalsintotheprogramstructure,theeligibilityofenergy

storageanditsroleinpreservingandenhancingenergybenefitsforthismarket,andthe

incentivestructureneededtoaddressfinancialbarriersandscaleinvestmentinsolarenergy

systems.TheJointProposalalsoincludesrecommendationsforathird-partystatewide

ProgramAdministratorandtheadministrativeprocessesanddocumentationrequirementsto

implementtheprogram.

3

TheALJRulingalsoreferencestheOctober21,2015ALJRulingrequestingpartiesto

PhaseIoftheAB327proceedingtocommentonAB693abilityto“counttoward”the

Commission’sobligationtodevelopspecificalternativesdesignedforthegrowthofDistributed

Generationindisadvantagedcommunities.TheNonprofitSolarStakeholdersCoalitionreminds

theCommissionthatownersofaffordablehousingpropertieseligibleunderAB693didnot

haveareasonableopportunitytorespondtothequestionspresentedintheOctober21,2016

ALJRulingatthattime.SinceAB693targetsaffordablehousingpropertiesandtheinstallation

ofeligiblesolarsystemscanonlybeaccomplishedunderaprogramresponsivetotheneedsof

propertyownersandtenantsresidingattheseproperties,thisomissionresultedinthe

exclusionoftheviewsofkeystakeholdersspecificallyincludedunderAB693.Followingthe

issuanceoftheSecondAmendedScopingMemoandRuleonMarch4,2016,CHPC,CEJA,and

BrightlinejointlysoughtclarificationoftheScopingMemoandfiledaMotionrequestingpublic

workshopstoengage,educateandinformkeyconstituencygroupsaboutkeyissuesand

questionsaffectingtheimplementationAB693beforedevelopingandsubmittingproposalsfor

implementation.NoactionwastakenonthisMotion.

Inresponsetothisgap,membersoftheNonprofitSolarStakeholdershavespent

considerabletimeandresourcestoactivelyengageourconstituenciesandobtainfeedbackon

thedesignoftheMultifamilySolarRoofsProgram,incentivestructure,andrequirements.

Whilethepublic’sinterestandouroutreacheffortswouldhavebenefitedfromtherequested

publicworkshops,weareconfidentthattheJointProposalfairlyrepresentstheinterestand

viewsofourconstituencies.TheNonprofitSolarStakeholdersCoalitionrequeststhatthe

Commissiongiveitsfullattentiontotheissuesandrecommendationspresentedinour

proposalsothattheinterestsoftheintendedbeneficiariesoftheAB693legislationhavean

appropriatevoiceinthisproceeding.

WethanktheCommissionfortheopportunitytosubmitproposalsandcommentson

thisimportantandtransformativeprogramandforitsthoughtfulconsiderationofourJoint

Proposal.

4

I. Introduction

Assembly Bill (AB) 693, enacted on October 8, 2015, established the Multifamily

Affordable Housing Solar Roofs Program (AB 693 or Multifamily Solar Roofs Program). The

Multifamily Solar Roofs Program is a legislative response to theprofound gap in the level of

solarinstallationsservinglow-incomerentersanddisadvantagedcommunities.

Thelegislationseekstoprovidelow-incomerenterslocatedinmultifamilyhousingwith

greateraccesstocleanenergysolutions.Inenactingthebill,theLegislaturefoundanddeclared

that:

Itisthegoalofthestatetomakequalifyingsolarenergysystemsmoreaccessibleto

low-incomeanddisadvantagedcommunitiesand,asinthecaseoftheMultifamily

AffordableHousingSolarRoofsProgram,toinstallthosesystemsinamannerthat

representsthegeographicdiversityofthestate.1

Thelackofsolaraccessbylow-incomehouseholdsanddisadvantagedcommunitieswas

acoreelementinthejustificationforenactingthebill,asevidencedbytestimonypresentedin

supportofAB693.OnJuly13,2015,theCaliforniaEnvironmentalJusticeAlliance(CEJA),the

primarysponsorofthelegislation,providedtestimonytotheSenateCommitteeonEnergy,

Utilities,andCommunicationsthat“evenwiththeexistingrenewableenergyprogramsforlow-

incomeanddisadvantagedcommunities,therehasonlybeenlessthan1%penetrationinto

disadvantagedcommunities.”2Similarly,atthesamehearing,arepresentativeoftheMASH

Coalitionstatedthat“thegrowthinsolarinCalifornia’sresidentialmarketsfacilitatedbytheCSI

Initiativehaslargelybypassedlow-incomerentersanddisadvantagedcommunitiesinCalifornia

[and]ananalysisbytheCenterforAmericanProgressreportedthatonly4.2%ofthesolar

installationsundertheCaliforniaSolarInitiative(CSI)servedhouseholdswithincomesofless

than$40,000peryear.”3

MajorProgramGoalsandBeneficiariesofAB663

1AB693Section1(e).

2TestimonyofStrelaCervas,SenateCommitteeonEnergy,Utilities,andCommunications.Public

hearingonAB693,July13,2015.3TestimonyofRandallSimmrin,SenateCommitteeonEnergy,Utilities,andCommunications.Public

hearingonAB693,July13,2015.

5

AB693wasenactedtoprovideanewframeworktoaffirmativelymitigatebarrierstosolarPV

accessataffordablerentalproperties,andtoensurethatbenefitsfromrenewableenergyare

availabletotheseunderservedmarkets.TheintendedbeneficiariesoftheMultifamilySolar

RoofsProgramarelow-incomerentersresidingineligibleaffordablemultifamilyproperties.In

providingthesebenefits,thedesignoftheMultifamilySolarRoofsProgrammustcarryout

variousprogrammaticpurposes,whicharesummarizedinTable1below

TABLE1–MajorProgrammaticPurposesofAB693

ScopeofProgram

§ Installeligiblesolarenergysystemsateligibleaffordable

multifamilyproperties.

§ Ensuregeographicdiversityforsolarenergysystemsinstalled

throughtheprogram.

§ Facilitateenergyefficiencyimprovementsinconjunctionwith

solarenergyinstallations.

§ Provideeconomicbenefitsindisadvantagedcommunities.

§ Advancepoliciesforrenewableenergyandreducingemissions.

Allocationsfrom

Systems

§ Allocateelectricitycollectedanddistributedfromeligiblesolar

energysystemtoutilitycustomersatqualifiedaffordable

multifamilyrentalhousingsites.

Benefitsfrom

Systems

§ Reducepeakenergyuse.

§ Adoptutilitytariffsthatprovide,andcontinuetoprovide,net

economicbenefitstolow-incometenants.

IncentiveStructure

§ Setincentivelevelstomakesolarenergysystemsfinancially

feasibleandtoaccountfor“splitincentive”barriers.

§ Alignincentivelevelswithreasonableestimatesofsolarcosts.

§ Reduceincentivelevelstoaccountforresourcesandother

projectcontributionsthatoffsetprojectinvestmentcosts.

§ Provideprojectfinancingtoolswherenecessaryandappropriate

tosupportincentivestructuresandmaximizeratepayerbenefits.

Hiring

§ Providealocalhiringprogramtoplacequalifiedpersonsfrom

disadvantagedcommunitiesinjobscreatedbythesolar

program.

ConsumerProtection

§ Protectandpreserveenergybenefitsprovidedtoprogram

participantsandratepayers.

§ Safeguardaffordablehousingpropertiesandtenantsfrom

financialrisks.

6

AdditionalPurposes

AB693mustsupportotherlegislativemandatesincludingpoliciesgoverningsolar

installations,prioritiesapplicabletothesourceoffundingforAB693,andstatewideenergy

efficiencygoalsapplicabletoutility-fundedprograms.Theseadditionalpurposesare

summarizedinTable2below.

TABLE2–RelatedStatutoryPurposes

SB1

SB1establishedbasicrequirementsapplicabletosolarPVinstallations

undertheCaliforniaSolarInitiative.PurposesunderSB1thatare

applicabletoAB693’sprogramdesigninclude:

§ Facilitatecost-effectiveinvestmentsinpeakelectricity

generationcapacitywhereratepayersrecoupthecostoftheir

investmentbyavoidingpurchasesofelectricityatpeakrates.

§ Providemonetaryincentivesforsolarenergysystemsthathave

theprimarypurposeofcollectinganddistributingsolarenergy.

§ Requirereasonableandcost-effectiveenergyefficiency

improvementsinexistingbuildingsasaconditionofproviding

incentivesforeligiblesolarenergysystems.

§ Developfinancingoptionsthathelpoffsettheinstallationcosts

ofthesolarenergysystems.

Section748.5

ProgramfundingforAB693isauthorizedunderSection748.5ofthe

PublicUtilitiesCode,whichspecifiesthateligiblefundingusesinclude

cleanenergyandenergyefficiencyprojects.ThepurposeofSection

748.5tofundabroadrangeofintegratedcleanenergysolutions

shouldbereflectedintheprogramdesign.

SB350

AB693wasenactedinthesamelegislativesessionasSB350.SB350

setsagoaltodoubleenergyefficiencysavings.ItrequirestheCPUCto

adoptenergyefficiencyanddemandreductiontargetsandto

implementthetargetsthroughprogramsthatprovidefinancial

incentives,rebates,technicalassistance,andsupportcustomersto

increaseenergyefficiency.TheimplementationofAB693providesa

meanstoaddressthepurposesofSB350.

AB802

AB802,enactedonOctober8,2015,requiresutilitiestoprovide

energyusageinformationtomultifamilypropertieswithfiveormore

activeresidentialornonresidentialutilityaccountsandestablishes

energybenchmarkingrequirementsforthecoveredproperties.

ImplementationoftheprogramwillbeginonJanuary1,2017.As

such,energydatasharingandbenchmarkingsetbyAB802shouldbe

incorporatedintoAB693’sprogramdesign.

7

AB693’sMarketObjectivesandProgramFrameworkareDifferentthanMASH

Thegoaltoinstallatleast300megawatts(MW)ofnewsolarcapacityunderMultifamily

SolarRoofsProgramisordersofmagnitudegreaterthanwhatwasproposedoroccurredunder

MultifamilyAffordableSolarHousing(MASH).Withfundinglevelsupto$100millionannually,

theMultifamilySolarRoofsprogramcouldbeinstalledonover2,000properties,comprising

morethan150,000low-incomerenters,andreachingroughly30%oftheaffordablemultifamily

housingmarketinCalifornia.

ThisscaleandscopeoftheMultifamilySolarRoofsProgramwillhaveasignificant

transformativeeffectonCalifornia’saffordablemultifamilyrentalhousingmarket,andhavea

lastingeffectofCalifornia’saffordablehousinginventoryfordecadestocome.Assuch,

significantattentionandeffortsareneededtoensurethatAB693’sprogramdesignanticipates

thelong-termenergyissuesaffectingthismarketsegment.Themarkettransformationthatwill

occurunderAB693isalsoanunprecedentedopportunityformultifamilypropertiestoplaya

pivotalroleintheCommission’sstrategiesandplanstomoveCaliforniatoasmartergrid.

AsaresultofsignificanttransformationcontemplatedbyAB693andtheopportunityto

facilitatethischangeinamannerthatadvancesthetransitiontoasmartgridinlow-income

markets,anypremisethatAB693ismerelyanextensionoftheMultifamilyAffordableSolar

Housing(MASH)programmustberejected.TheAB693’slegislativehistoryalsoarguesstrongly

againstthisconclusion.

WithintheLegislativeCouncilsDigestandthetextofAB693thereisnostatementthat

theMultifamilySolarRoofsProgramwasintendedasanextensionofMASH.Infact,thereare

onlythreereferencestoMASHwithinthetextofAB693andnoneofthosereferencesstateor

inferthatAB693wasintendedtoextendMASHoritsprogramstructure.4

Onthecontrary,theCPUCanalysisofAB693statedthat:

4WithinAB693,MASHisfirstreferencedintheLegislativeDigestinthecontextofthe10%set-asidefor

theSASHandMASHprogramsundertheCaliforniaSolarInitiatives.Thesecondreferenceisinsection

2870(g)(1).MASHismentionedinthecontextofutilitybillreductionsbeingachievedthroughtariffs

thatallowfortheallocationofcredits,“suchasvirtualnetmeteringtariffsdesignedfortheMultifamily

AffordableSolarHousingprogram….”Thethirdreferenceisinsection2870(j)(1)totherequirementthat

assessmentsoftheAB693programsenttotheLegislatureincludeasummaryoftheothersolar

programsincludingMASH.

8

TheMultifamilyAffordableHousingRenewablesProgramwouldhaveseveralimportant

differencesfromthecurrentMultifamilyAffordableSolarHousing(MASH)andSingle

FamilyAffordableSolarHomes(SASH)incentiveprograms.5

Severalofthesedifferencesarespecificallydiscussedintheanalysis,includingtheinclusionof

other“qualifyingrenewableenergysystems”inadditiontosolar-electricsystems.

Indeed,throughoutthelegislativeprocesslegislators,committeestaff,andprogram

stakeholdersaskedquestionsaboutthesimilaritiesanddifferencesbetweenwhatwas

proposedunderAB693andthecurrentMASHprogram.Inresponse,briefingmaterialswere

publicallydisseminatedtolegislators,committeeandlegislativestaffs,andotherstakeholders

thatidentifieddeficiencieswithcurrentsolarPVprogramsandapproachesforservinglow-

incomehouseholdsinmulti-tenantbuildings,andidentifiedprogramelementsinAB693that

providedadvantagesovertheMASHprogram.ThesematerialsincludeanAB693FAQ

documentsenttoaffordablehousingstakeholdersonSeptember7,2015immediatelybefore

theSenatevote,andonJune30,2015,whichisprovidedinAppendixA.6Thesepublically

disseminatedmaterialsaswellasstatementssuchasthepreviouslyreferencedtestimonyby

theMASHCoalitionthat“currentsolarprogramshavenotpenetratedtheaffordablehousing

markets”andhave“largelybypassedlow-incomerentersanddisadvantagedcommunitiesin

California”makeitclearthatnewapproachesandsolutionswerebeingsoughtthroughtheAB

693legislativeinitiative.

Moreover,ifitwastheintentoftheAB693sponsorstocontinuetheMASHprogramor

retainthesameprogramstructure,thelegislaturecouldhaveandwouldhaveextended

fundingforaMASH3.0programasthelegislaturedidwhenextendingfundingfortheMASH

2.0.7NeitheroutcomewasincludedintheenactedAB693legislation.Therefore,statements

5Curran,ElizabethandKochanowsky,Amy,CaliforniaPublicUtilitiesCommission,EnergyDivision,

“DivisionAnalysis:MultifamilyAffordableHousingRenewablesProgram.”6BriefingmaterialsshowninAttachmentAweresenttoHousingCalifornia,theCaliforniaHousing

Consortium,theSouthernCaliforniaAssociationofNonprofitHousing,theCaliforniaCoalitionforRural

Housing,theNon-ProfitHousingAssociationofNorthernCalifornia,theSanDiegoHousingCommission,

andtheCaliforniaHousingPartnershipCorporation.7SeeAB217(Bradford,2013),availableat

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB217.

9

thatAB693“wasdesignedaroundDecision15-01-027(AB217orMASH2.0proceeding”8areat

bestinconsistentwiththepublicrecord,and,asapointofdepartureforconsideringhowto

implementthenewMultifamilySolarRoofsProgram,aremisleading9andapparentlydrivenby

parochialinterests.

Insummary,AB693mustbetakenuponitsowntermsandresponsiblyweighthe

broadimpactsthisprogramwillhaveonlow-incomerentersandpropertyownersindeveloping

aprogramdesignthatisresponsivetoanewsetofpurposesandlegislativemandates.

8EverydayEnergy,NoticeofExparteCommunication,July1,2016.

9ThereareseveralstatementintheNoticeofExparteCommunicationthatmeritrebuttal.Forexample,

thefocusonaffordablemultifamilyhousinginAB693wastoensurethatinstalledsolarenergysystems

continuetobenefitlow-incomerentersovertheusefullifeofthesystem.Affordablehousingtypically

hasverylongaffordabilityperiodsinwhichrentsarerestrictedupto55years.Thesesamerestrictions

donotexistforothermarketsegments.AB693wasnotintended,assuggestedintheNotice,to

readdresstheconflictsbetweenEverydayEnergyandShorebreakintheMASHproceedingoverthe

eligibilityofmobilehomes.Additionally,theprogramproposaldisseminatedtoSenatorHuesoand

otherpublicofficialsinFebruarywouldhaverequiredCAREhouseholdsatmultifamilypropertiesto

convertoroptintostandardutilityrateschedules.Thisapproachwouldhaverequiredadded

enrollmentcomplexitiesandminimumtenantPVinstallationsandotherprotectionstoensurethatthe

programwouldnotharmCAREhouseholds.Thisstructurefordeliveringtenantbenefitswasrejected,

andisaltogetherdifferentfromAB693andMASH.Furthermore,thestatementthattheMASHprogram

isoversubscribeddoesnotconnotethattheprojectsinthereservationqueuewillbeimplementedas

proposed.WeareconcernedthattheMASHreservationsinthequeuemaybeoverstatedfromwhat

mayactuallybeaccomplished.Challengesandfinancialuncertaintyassociatedwithutilityallowance

adjustments,overlookedbyMASH,canadverselyaffectthescalingofsolartoserveresidents.Lastly,

contrarytothesuggestionthatEverydayEnergyandCALSEIAdraftedandareresponsibleforAB693,

environmentjusticeorganizationswerealreadyworkingwithCALSEIAonthedevelopmentofaproposal

toservelowincomehouseholdsanddisadvantagedcommunitieswhenEverydayEnergyjoinedthe

discussion,andthatCEJAhadaleadroleinthedraftinganddevelopmentofthelegislationthatwas

eventuallyenacted.

10

II. ProgramFunding10

TheMultifamilySolarRoofsProgramisfundedfromCapandTradeauctionrevenues.

Section2870(c)ofPart2ofDivision1ofthePublicUtilitiesCodeprovidesthat:

Thecommissionshallannuallyauthorizetheallocationofonehundredmilliondollars

($100,000,000)or10percentofavailablefunds,whicheverisless,fromtherevenues

describedinsubdivision(c)ofSection748.5fortheMultifamilyAffordableHousingSolar

RoofsProgram,beginningwiththefiscalyearcommencingJuly1,2016,andendingwith

thefiscalyearendingJune30,2020.11

Theuse,distribution,andmanagementofthisfundingresourcemustbeundertakenina

mannerconsistentwiththeregulationsandpoliciespertainingtogreenhousegas(GHG)

allowancesunderArticle5ofTitle17oftheCaliforniaCodeofRegulations,Sections95800to

96023,andtherequirementsadoptedbytheCommissionunderDecision(D.)12-12-033.

ContributionsofGHGAllowanceProceeds

TheallocationsmadepursuanttoSection748.5arefromGHGallowancesreceivedby

electricaldistributionutilitiespursuanttosubdivision(b)ofSection95890ofTitle17ofthe

CaliforniaCodeofRegulationsandmaybeusedforcleanenergyandenergyefficiencyprojects.

TheseutilitiesincludePacificGasandElectricCompany(PG&E),SouthernCaliforniaEdison

Company(SCE),SanDiegoGas&ElectricCompany(SDG&E),LibertyUtilities(CalPecoElectric)

LLC(Liberty),andPacifiCorp.

WeproposethatalloftheelectricalcorporationsberequiredtocontributeGHG

allowanceproceedstowardtheMultifamilySolarRoofsProgramtoensurethatlow-income

rentersthroughoutthestatehaveaccesstosolarenergysystems.Ifthecustomersofan

electriccorporationareincludedintheprogramdesign,theutilitymustberequiredto

contributeGHGproceedsasdirectedbyAB693.Theexclusionofoneormoreoftheelectrical

corporationsfromthisprogramcouldpotentiallyunderminetherequirementtoprovidebroad

geographicdiversityandsolaraccesstoqualifiedaffordablemultifamilyproperties.In

particular,exceptionstomakingGHGallowancecontributionsfromPG&E,SCE,andSDG&E

10Questions18,19,20,and21oftheALJ’sJuly8,2016Rulingarecoveredinthissection.

11AB693amendmentstoPublicUtilityCode(PUC).Part2ofDivision1ofthePUC,Section2870(c).

11

shouldnotevenbeconsideredsincetherearelargenumbersofeligiblemultifamilyaffordable

propertiesandrenterswithineachoftheseutilities’servicejurisdictions.

ContributionLevels

Currently,roughly$1billioninannualallowancerevenuesaredistributedtoresidential

customersastheCaliforniaClimateCreditfromthedesignatedelectricalcorporations.The

tablebelowshowsanestimateof2015auctionproceedspreparedbytheCaliforniaAssembly

inSeptemberof2015,andpercentagecontributionfromeachutility.

Table3-ElectricIOUAllowanceProceedsAvailableforCleanEnergy

andEnergyEfficiencyProjects,2015

Utility

Forecastof2015

AllowanceAuction

Proceeds12,13

Percentof

Auction

Proceeds

PacificGasandElectricCompany $438,602,830 39.31%

SouthernCaliforniaEdison $562,499,489 50.41%

SanDiegoGas&ElectricCompany $98,717,335 8.85%

PacifiCorp $11,870,145 1.06%

LibertyUtilities(CalPecoElectric) $4,078,910 .037%

Total $1,115,768,709

AB693contemplatesthatalloftheparticipatingelectricalcorporationswillcontributea

similarpercentageshareoftheirGHGallowancestosupporttheMultifamilySolarRoofs

program.

Inadditiontorequiringallelectricinvestor-ownedutilities(IOU)tocontributetowards

AB693,weproposethatthecontributionsfromparticipatingelectricalcorporationsbe

calculatedusingoneofthefollowingtwomethods,dependingonwhetherthetotalGHG

allowancesfortheyearbeingcalculatedexceed$1billion:

12Source:AssemblyFloorAnalysis,September10,2015.AnalysisPreparedby:SueKateley

http://www.leginfo.ca.gov/pub/15-16/bill/asm/ab_0651-

0700/ab_693_cfa_20150910_231003_asm_floor.html13Totalforecastofallowanceauctionproceedsfor2015includesallowanceproceedsthatwillwere

expectedtobereceivedin2015inclusiveoffranchisefeesanduncollectibles,andtheremainingbalance

ofallowanceproceedsreceivedinpreviousyears(inclusiveofinterest)thathasnotyetbeen

distributed.

12

§ Iftheallowancesforallelectricalcorporationstotal$1billionorless,eachelectrical

corporationshouldcontribute10%ofitsGHGallowancesforthatyear;

§ Ifthecombinedtotalallowancesexceed$1billion,eachelectricalcorporation’s

contributionshouldbebasedontheelectricalcorporation’spercentageofthetotal

allowancesforallparticipatingelectricalcorporationsmultipliedby$100million.

PursuanttotheALJ’srequest,tables4and5providequantitativeexamplesoftheabove-

describedapproaches.

Table4-ElectricIOUContributions

TotalAuctionAllowancesExceed$1Billion

UtilityGHG

Allowances

%ofTotal

Allowances

AB693

Contribution

%

Contributed

PG&E $438,602,830 39.31% $39,309,476 8.96%

SCE $562,499,489 50.41% $50,413,628 8.96%

SDG&E $98,717,335 8.85% $8,847,473 8.96%

PacifiCorp $11,870,145 1.06% $1,063,854 8.96%

Liberty(CalPeco

Electric) $4,078,910

.037%

$365,569 8.96%

Total

$1,115,768,70

9 100% $100,000,000

Table5-ElectricIOUContributions

TotalAuctionAllowancesEqualToorLessThan$1Billion

UtilityGHG

Allowances

%

Contributed

AB693

Contribution

PG&E $350,882,264 10.00% $35,088,226

SCE $449,999,591 10.00% $44,999,959

SDG&E $78,973,868 10.00% $7,897,387

PacifiCorp $9,496,116 10.00% $949,612

Liberty(CalPeco

Electric)$3,263,128

10.00%

$326,313

Total $892,614,967 10.00% $89,261,497

MechanismforDirectingAllocationsandDataConfidentially

TheregulatorymechanismfortheallocationofGHGallowancesandproceedsis

establishedunderArticle5ofTitle17oftheCaliforniaCodeofRegulations,CaliforniaCapon

GreenhouseGasEmissionsandMarket-basedComplianceMechanismstoAllowfortheUseof

13

ComplianceInstrumentsIssuedbyLinkedJurisdictions.Undertheseguidelines,theelectrical

corporationshallcalculatethevalueoftheseallowancesbasedontheaveragemarketclearing

priceofthefourquarterlyauctionsheldinthesamecalendaryearthattheallowancesare

allocated.Themonetaryvalueofallowancesreceivedbytheelectricalcorporationisdeposited

directlyintocomplianceaccounts.14

Weproposethattheelectricalcorporationsberequiredtoretainorreserve10%ofthe

GHGallowancevalueinanAB693reserveaccountpendingadeterminationbytheCommission

ontheannualprogramfundinglevelatthebeginningofeachfundingyear.Theannualprogram

levelshouldbebasedonthecumulativevalueofGHGallowancesforeachoftheparticipating

electricalcorporations.OncetheCommissionsetstheannualprogramlevelandthecalculated

contributionforeachelectricalcorporation,theCommissionshouldorderthetransferoffunds

fromtheelectricalcorporation’sAB693reserveaccounttotheAB693programaccount

administeredbytheProgramAdministrator.Themethodsfordeterminingthefundinglevels

fortheMultifamilySolarRoofsProgramandcalculatingthecontributionsforeachparticipating

electricalcorporationshouldbetransparenttoassureprogramstakeholdersandmembersof

thepublicthatthecorrectamountoffundsareallocatedtotheprogrameachyear.

Thisprocessdoesnotrequirethedisclosureofinformationconcerninginternalbidding

strategiesorbiddinginformation.Rather,whatisrequiredisthattheCommissionprovide

sufficientregulatoryoversightofthereportingandaccountingrequiredunderTitle17ofthe

CodeofCaliforniaRegulationsandalsoprovidetimelydisclosuresofthecumulativeannual

GHGallocationsandrevenuesreceivedbyeachparticipatingelectricalcorporationtobe

crediteddirectlytotheresidential,smallbusiness,andemissions-intensivetrade-exposedretail

customersoftheelectricalcorporationpursuanttosubdivision(b)ofSection95890ofTitle17

oftheCaliforniaCodeofRegulations.

FundingAvailabilityandAnnualAllocations

Theamountoffundingavailableonayear-to-yearbasisfortheMultifamilySolarRoofs

programwilldependontheresultsoftheauctions,whichareheldatscheduledquarterly

14Article5ofTitle17oftheCaliforniaCodeofRegulations,Sections95800to96023.

14

intervalsthroughoutayear.Toprovideapredictablelevelofannualfundingforqualifying

projectsandaccountfortimedifferencesinthecollectionofauctionallowanceproceedsand

yeartoyearrevenueuncertaintiesassociatedwithauction-basedfunding,weproposethatthe

programfundinglevelsbesetannuallybasedontheauctionproceedsforthepreviousyear.

PursuanttoSection2870(c),thecollectionofreceiptssupportingAB693commenced

onJuly1,2016.PursuantSection2870(f)(1),theCommissionisrequiredtoauthorizetheaward

ofmonetaryincentivesforqualifyingsolarenergysystems.Underthisframework,afullyearof

scheduledauctionscollectionswillhavebeencompletedbyJuly1,2017.Theprogrambudget

forinvestmentsduringthefirstprogramyear,July1,2017toJune30,2018,wouldbesetbased

ontheGHGallowancerevenuescollectedthroughJune30,2017.Subsequentannualfunding

allocationsforprograminvestmentswouldsimilarlybebasedontheprioryear’sallowance

revenues.Programfundingnotobligatedorexpendedduringaprogramyearshouldbeeither

carriedoverinareservefundoraddedtotheannualfundingreceiptsforfutureyearsto

supportmoreprograminvestments.

ProgramFundingAfter2020

AB693furtherprovidesthat:

ThecommissionshallcontinueauthorizingtheallocationofthesefundsthroughJune

30,2026,ifthecommissiondeterminesthatrevenuesareavailableafter2020andthat

thereisadequateinterestandparticipationintheprogram.15

Atthispointtheoutlookforcontinuedfundingafter2020isuncertain.Inasmuchasthe

planninganddesignofAB693mustconsiderthequestionofwhetherfundingwillbeavailable

after2020,theCommissionshouldstateinitsdecisionhowandwhentheissueoffuture

programfundingwillbetakenupand,ifknown,whatfactionstheCommissionwillconsiderin

decidingwhetherrevenuesareavailable.

15AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(c).

15

EligibleUses

FundingforMultifamilySolarRoofsProgrammustsupportavarietyofadministrative,

technicalsupport,andcapitalinvestmentactivities.FundingunderAB693shouldprovidethe

following:

§ AdministrativeFunding:10%oftheannualprogramallocationsshouldbesetasideand

usedforprogramadministrationandtoprovideforenhancedprogramsupport

necessarytosuccessfullyimplementtheprogram.Inadditiontocarryingoutcore

administrativerequirements,suchasdevelopingprogramguidelines,managingprogram

applications,reservationandpaymentprocesses,verifyingprogrameligibility,

conductingoutreachtohousingorganizations,andundertakingperiodicprogram

evaluations,theimplementationofAB693willrequiretheProgramAdministratorto

undertakethefollowingsupplementalactionsasspecifiedinthelegislation:

i. Ensurealignmentofprogramcostsandaccountingofleveragedresourcesin

settingprogramincentivesandmakingperiodicupdatestoincentivestructure

requiredunder2870(f)(4)and(5)

ii. EnsurecompliancegeographicdiversityrequirementsunderSection1(e)

iii. Conductoutreachandprovidetechnicalassistancetopropertyownersandtenants

indisadvantagedandunderservedcommunitiestoincreaseaccesstosolarenergy

systems

iv. Engagecommunitybasedorganizationstofacilitatetenanteducation

v. DevelopprotocolsandmakecompliancedeterminationspursuanttotenantPV

allocationsandtenanteconomicbenefitsrequirementsunder2870(f(2)and

2870(g)(1)

vi. Monitorcompliancewithlocalhiringrequirementsunder2870(f)(6)

vii. Providetechnicalsupportforimplementingenergyefficiencyassessments

viii. Facilitate“one-stop”accesstoutilityenergyefficiencyprogramresourcesto

implementrequirementsunderSection2870(f)(7)

ix. Developprotocolsandverifycompliancewithsystemperformanceandoperation

andmaintenancerequirementsunderSection2870(f)(3)

x. ConductanalysisandmarketdemandassessmentsrequiredunderSection

2870(j)(1)and(2)

Thescopeoftheseadditionaladministrativeandsupportactivitiesjustifytheneedforthe

proposedbudgetlevel.

§ CapitalFunding–90%oftheannualprogramallocationsshouldbeexpendedoneligible

programcapitalcosts.Eligiblecapitalexpensesshouldincludeequipmentandlabor

coststoinstall:

i. PVsystemsservingresidentialunitslocatedateligiblemultifamilyproperties

inclusiveofrooftop,carport,andgroundmountedsolarenergysystems

ii. PVsystemsservingthecommonareasofeligiblemultifamilyproperties

16

iii. Energystoragesystemsintegratedwithon-sitePVsystemsinstalledat

multifamilyproperties

iv. EnergyefficiencymeasuresforamountsnotfundedbyratepayerandCapand

TradeutilityenergyefficiencyasdiscussedinSectionX.

§ GeographicDistributions–ToprovidetheProgramAdministratorwithflexibilityin

committingprogramresourcespursuanttotherequirementsforgeographicdiversity,

andtoimplementprojectsinatimelymanner,thefundingprovidedtotheMultifamily

SolarRoofsProgramshouldbeavailabletoanyaffordablemultifamilyrentalproperty

meetingtheeligibilityrequirementsandlocatedwithinanyoftheserviceareasof

contributingelectricalcorporations.Criteriaforensuringgeographicdiversityshouldbe

adoptedtoensurethefairallocationofresourcesacrossutilityjurisdictionsduringthe

overalldurationoftheprogram.

FundsControlandEvaluation

Section2870(j)(1)and(2)prescribeextensiveprogramreportingrequirementsthatwill

requiretheProgramAdministratortoputinplaceaccountingcontrolstomonitorandanalyze

programcommitments,reservations,obligations,andexpenditures.Theserequirements

mandatethattheProgramAdministratorevaluateprogramoutcomesandbenefitsinrelation

totheprogramcoststoassesstheeffectivenessoftheprogram,includingutilitybillreductions

toprogramparticipants,ratepayerbenefitsfromthereductionofCAREoutlays,environmental

benefits,etc.

17

III. ProgramEligibility16

Programeligibilityislimitedtoaffordablemultifamilyrentalproperties.Aqualified

multifamilyaffordablemultifamilyrentalpropertymusthavefiveormorerentalhousingunits

servinglow-incomehouseholds,thatiscurrently,andcontinuestobe,subjecttodeed

restrictionsorotherpublicregulationsgoverninghouseholdincomelevelsandrent

affordability.Weproposedthattheseaffordablerestrictionsbeforaperiodof10years

followingthereceiptoffundingfromtheMultifamilySolarRoofsProgram.

UnderthespecificdefinitionprescribedbyAB693,low-incomeresidentialhousing

meansamultifamilyresidentialrentalcomplexfinancedwithlow-incomehousingtaxcredits,

tax-exemptmortgagerevenuebonds,generalobligationbonds,orlocal,state,orfederalloans

orgrantsinwhichtherentsofthelow-incomeoccupantsdonotexceedthoseprescribedby

deedrestrictionsorregulatoryagreementsimposedpursuanttothetermsofthepublic

financingorfinancialassistance.17Withinthisdefinition,low-incomemeansahouseholdwith

anincomeatorbelow80%ofthearea’smedianincome(AMI),whichisupdatedannuallyfor

eachcountybytheU.S.DepartmentofHousingandUrbanDevelopment(HUD).

Underthisdefinition,AB693furtherdivideseligiblepropertiesintotwocategories.A

qualifiedmultifamilypropertyeithermustbelocatedinaDisadvantagedCommunityasdefined

byCalEnviroScreen,ormustserveasubstantiallylowerhouseholdincomelevel,inwhich80%

oftheresidentshaveincomesatorbelow60%ofAMI.

ProfileofEligibleProjects

AsofJanuary2016,therewere6,023propertieswith425,168unitsinCaliforniathat

potentiallysatisfiedtheAB693eligibilityrequirements.Thisinventorywillgraduallyincrease

asnewaffordablehousingpropertiesareconstructedundertheLowIncomeHousingTaxCredit

(LIHTC)program.

16Questions1,2,3,and4oftheALJ’sJuly8,2016Rulingarecoveredinthissection.

17AB693.Section2870(a)(3).ThissectionreferencesofSection2852(3)(a)(i)ofthePublicUtilitiesCode.

Seeathttp://codes.findlaw.com/ca/public-utilities-code/puc-sect-2852.html

18

DisadvantagedCommunities(DACs)–Section2870(3)(B)requiresthatDACsmustbeidentified

bytheCaliforniaEnvironmentalProtectionAgencypursuanttoSection39711oftheHealthand

SafetyCode.

ConsistentwiththismandateweproposethatDACdesignationsfortheAB693program

bedeterminedthroughtheuseoftheCalEnviroScreentool.18CalEnviroScreenassessesa

comprehensivesetofcommunityindicatorsincalculatingscoresandprovidesanobjective

basisfordeterminingoverallcommunityneed.WerecommendthattheCalEnviroScreentool

beusedeitheronautilityjurisdictionbyutilityjurisdictionbasisoronastatewidebasis

dependingonwhichapproachhasthebroadesteligibility.19Itappearsthatbyusing

CalEnvirScreenonautilityjurisdictionbasisinsteadofthecurrentstatewidebasismayensure

thatregionalconditionsandfactorsaffectingcommunityneedsaremorepreciselyweighted

andnotskewedbystatewideaveragescoresandthatthenumberofcensustractsbyutility

jurisdictionmightincrease.However,beforeadecisionisreached,ananalysisshouldbe

completedtodeterminewhichapproachprovidesthebroadesteligibility.

Currentlyapproximately20%oftheaffordablemultifamilypropertiesinCaliforniathat

meettheeligibilityrequirementsunderSection2852arelocatedinDACsidentifiedby

CalEnviroScreenonastatewidebasis.OfpropertieslocatedwithinIOUjurisdictions,

approximately30%oftheeligiblepropertiesareinDACs.Becausetheinventoryofaffordable

multifamilyhousingqualifiedundertheMultifamilySolarRoofsProgramisalmostentirely

comprisedofpropertiesmeetingtherequirementthat80%oftheresidentshaveincomesator

below60%oftheAMI,theuseofCalEnviroScreenwillnotmateriallyaffectthenumberof

qualifiedmultifamilypropertiesundertheprogram.ThepracticaleffectoftheDACeligibility

criteriaistodirecttargetedeffortsinareasthathavespecialneeds.Table6providesa

summaryofthenumberofeligiblepropertiesandunitswithinIOUjurisdictionsandDACsby

typeofhousing.

18TheCalEnviroScreen2.0maybefoundat:http://oehha.ca.gov/ej/ces2.html.

19TheCommissionrecentlyapprovedthisapproachofusingCalEnviroScreeninSCE’sandSDG&E’s

electricvehiclepilotprogramsinA.14-10-014andA.14-04-014.SeeD.16-01-045,p.138,andD.16-01-

023,p.41.

19

Table6–AffordableMultifamilyHousing

CompliantwithSection285220

State IOUJurisdictions DACswithinIOUs21

Properties Units Properties Units Properties Units

LIHTC 4,213 312,237 2,932 225,173 921 75,187

HUD 1,422 98,812 918 63,549 249 19,276

USDA 388 19,119 315 15,214 91 4,851

TOTAL 6,023 425,168 4,165 303,936 1,261 99,314

CEJAandKevaladevelopedaGIS-basedtoolidentifyingeligiblemultifamilyaffordablehousing

properties.Thistoolisavailableat:https://keva.la/ceja.

CommunityChoiceAggregators(CCAs)–Section2870(i)statesthat“[t]hecommissionshall

determinetheeligibilityofqualifiedmultifamilyaffordablehousingpropertytenantsthatare

customersofcommunitychoiceaggregators.”

WeproposethatqualifiedmultifamilypropertiesthatareCCAcustomersshouldbe

includedintheMultifamilySolarRoofsprogram.Bytargetingunderservedaffordablehousing

marketsandlow-incomerenters,MultifamilySolarRoofsprogramwilladdressprogrammatic

gapsandcomplimentotherenergyprogramsavailableintheseareas.Wefurthernotethatthe

fundingsourceforAB69322wasestablishedtoprovidecustomersofelectricalcorporations,

includingcustomersinCCAs,withaClimateCredit.Weseenojustificationtoexcludelow-

incomeresidentsofCCAsfromthisprogram.

EligibilityDeterminations

Thereareseveralfactorsthatsignificantlysimplifytheprocessfordeterminingeligibility

ofaffordablemultifamilyrentalpropertiesunderAB693.Financialassistanceprovidedto

multifamilyhousingfromthepublicentitieslistedbelowdirectlysupportthedevelopmentand

20PreparedbytheCaliforniaHousingPartnershipCorporation,January2016.Analysisisbasedon

housingdatacompiledbyCHPCfrompublicagencieswithregulatoryoversightresponsibilities.Data

doesnotincludefederally-supportedpublichousingpropertiesadministeredbypublichousing

authorities.Thesepropertieswouldaddapproximately350propertiesand37,650unitstothestatewide

total.21NumbersbasedonTop25%ofDACsasdeterminedonastatewidebasisusingCalEnviroScreen.

22Subdivision(b)ofSection95890ofTitle17oftheCaliforniaCodeofRegulations.

20

operationoflow-income,verylow-income,andextremelylow-incomerentalhousing.This

assistanceisconditionedonstateandfederally-monitoredcompliancewithannuallyupdated

andofficiallypublishedhousingrentandincomerestrictions.

§ CaliforniaTaxCreditAllocationCommittee(TCAC)

§ CaliforniaDebtLimitAllocationCommittee(CDLAC)

§ CaliforniaDepartmentofHousingandCommunityDevelopment(HCD)

§ TheCaliforniaHousingFinanceAgency(CalHFA)

§ U.S.DepartmentofHousingandUrbanDevelopment(HUD)

§ U.S.DepartmentofAgriculture–RuralDevelopment(USDA-RD)

§ RedevelopmentAgencysuccessoragenciesingoodstandingwithHCD

§ Cityorcountygovernments,administeringHOMEFundsincompliancewithHUD

regulations.

Multifamilyrentalhousingassistanceprogramsadministeredbythepublicagencieslisted

abovesatisfybothAB693’srequirementthatthepropertyhaveadeedrestrictionorregulatory

agreementprescribingtenantincomeandrentlevelspursuantthetermsoffinancingor

financialassistance23,andAB693’srequirementapplicabletopropertieslocatedoutsideof

DACsthat80%ofrenterhouseholdshaveincomesatorbelow60%oftheareamedianincome.

Severalpublicagenciesandnon-profitorganizationsmaintaindatabasesofaffordable

multifamilypropertieswithintheStateofCaliforniathatcanbemadeavailabletotheProgram

Administratortodevelopalistofpropertieseligiblefortheprogram.Thisdatacouldassistthe

ProgramAdministratorinverifyingeligibilityandstreamliningtheeligibilityprocess.Alistof

qualifiedLIHTCandHUD-assistedmultifamilyproperties,preparedbytheCaliforniaHousing

PartnershipCorporation(CHPC)fromdataprovidedbythepublicagencies,isprovidedin

AppendixBandC.

Additionally,affordablemultifamilyrentalpropertieseligibleunderAB693aresubject

tostrictincomereportingandverificationrequirements.Federalandstatehousingagencies

requirepropertyownerstocollectandmaintainrecordsoftenanthouseholdincomes.Wherea

questionexistsaboutwhetheramultifamilyrentalpropertymeetsaparticularincome

standard,theProgramAdministratorcoulduseacopyofthecurrentrentrolltoverify

23AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(a)(3).Thissection

referencesSection2852(a)(3)(a)(i)ofthePublicUtilitiesCode.Seeat

http://codes.findlaw.com/ca/public-utilities-code/puc-sect-2852.html

21

compliancewiththeprogram’seligibilitystandardwithoutdisclosingprotectedtenant

information.

EligibilityRequirementsandDocumentation

Tomakeeligibilitydeterminations,werecommendthatthefollowrequirementsbe

adoptedfortheMultifamilySolarRoofsProgram:

§ PresumptionofEligibility–Affordablemultifamilypropertieswithadeedrestrictionor

regulatoryagreementfromoneoftheagencieslistedaboveshouldbepresumedeligible

fortheMultifamilySolarRoofsprogram.WerecommendthattheProgramAdministrator

developandannuallyupdatealistofprequalifiedaffordablemultifamilyrentalhousing

propertiesinconsultationstateagenciesandnon-profithousingorganizationsthat

maintaindataonCalifornia’saffordablemultifamilyhousinginventory.

§ RequirementsforPropertyCertificationofEligibility–Affordablemultifamilypropertieson

thepre-qualifiedlistshouldbepermittedtosubmitacertificationofeligibilitytoestablish

programeligibilitysignedbythepropertyownerorofficeroftheaffordablehousing

organization.Thecertificationshouldminimallyprovidethefollowinginformation:

i. Nameandaddressoftheaffordablemultifamilyproperty.

ii. Nameandcontactinformationforthepublicagencythatisresponsiblefor

regulatingtheproperty.

iii. Certificationthatthepropertyhasadeedrestriction,regulatoryagreementor

housingassistanceagreementwiththelistedpublicagency.

iv. Certificationthattheremainingperiodofaffordabilityonthepropertyisatleast

10yearsorininstanceswherethepropertyhaslessthan10yearsremainingon

theregulatoryagreement,thepropertyowneragreesthatthepropertywill

extendcurrentrentaffordabilityrestrictionsatthepropertyforatleast10years

asaconditionofreceivingincentivesunderthisprogram.24

v. Certificationthattenantincomesatthepropertymeetoneofthefollowing

incomeeligibilitystandards:

a. PropertyislocatedinaDACandthetenantincomesareatorbelow80%of

theAMI;

b. PropertyisnotinaDACand80%ofthetenantshaveincomesatorbelow

60%oftheAMI.

§ PropertiesFundedbyDesignatedAgenciesNotonaPre-QualificationList–Newly

developedpropertiesandotheraffordablehousingpropertiesthathaveadeedrestriction

orregulatoryagreementfromoneofthedesignatedpublicagenciesthatarenotonthe

24SimilaraffordabilityrestrictionsaresetfortheCaliforniaLowIncomeWeatherizationProgramfor

LargeMultifamilyProjects.Therequirementsforthisprogramcouldbeusedasamodel.See:

https://camultifamilyenergyefficiency.org.

22

prequalifiedlistofpropertiesshouldbepermittedtomakearequesttobeaddedtothe

prequalifiedlistiftheycanprovideadditionalsupportingdocumentation.The

documentationincludes:

i. Copyofeachdeedrestriction,regulatoryagreementorhousingassistance

contractwiththelistedpublicagencyoragencies.

ii. RequirementsforPropertyCertificationofEligibility(listedabove).

§ PropertiesNotFundedByDesignatedPublicAgencies–Affordablehousingproperties

thathaveadeedrestrictionorregulatoryagreementfromapublicentityotherthanthe

designatedagenciesshouldbepermittedtomakearequesttobeaddedtothelistif

theycanprovidesupportingdocumentationincluding:

i. Letterfromthepublicentityornonprofitorganizationwithregulatoryoversight

responsibilitiesthatincludesinformationontherentrestrictionandother

affordabilitytermsandconditionsonthepropertypursuanttothetermsofthe

financingorfinancialassistance.

ii. Copyofeachdeedrestriction,regulatoryagreementorhousingassistance

contractwiththelistedpublicagencyoragencies.

iii. RequirementsforPropertyCertificationofEligibility(listedabove).

23

IV. GeographicProgramTargeting25

TheMultifamilySolarRoofsprogramwasintendedtobebroadlyavailabletoall

qualifiedaffordablemultifamilyrentalproperties.ThespecificlegislativedirectioninAB693

requiresthatresourcesbeallocated“toinstallthosesystemsinamannerthatrepresentsthe

geographicdiversityofthestate.”26Thisrequirementprecludesafirst-comefirst-serve

approach,andcallsinsteadforallocationstobemadeusingabroadsetofgeographically-based

considerationsincludinghowresourcesaredistributedbetweenqualifiedmultifamily

propertiesthatarelocatedinDACsandqualifiedpropertiesthatarelocatedoutsideDACs.

WhileAB693doesnotprescribearequirementthattheMultifamilySolarRoofs

ProgramadoptfundingallocationsorspecificMWcapacitytargetsbasedonwhethera

propertyislocatedinaDACoroutsideofaDAC,werecommendgeographicprogramtargets

basedonfundingallocations.AnequitabledistributionoffundingbetweentheseDACandnon-

DACpropertieswillfurtherthelegislativegoaltoinstallqualifiedsystems“inamannerthat

representsthegeographicdiversityofthestate.”27

UnderAB693,settinggeographicprogramtargetsbasedonfundinglevelsismore

logicalthanaMWbasedtargetbecauseoftheuncertaintyaroundtheamountofannual

auctionproceeds,theneedfordollarsbeforeinstallationsandMWcanberealized,and

becausetheactualinvestmentspendingineachcommunityisdirectlycorrelatedwiththings

likejobtraining,jobplacement,andothereconomicdevelopmentopportunities.

DACFundingTarget

Undertheapproachproposedabove,wespecificallyrecommendthatfundingtargets

besetbasedonthepercentageofeligiblepropertiesthatarelocatedinCalEnviroScreenDACs

andpercentofqualifiedpropertieslocatedoutsideofCalEnviroScreenDACs.Inthisregard,as

showninTable6,thenumberofqualifiedmultifamilypropertiesinDACsisapproximately30%

ofthetotalqualifiedmultifamilypropertiesinIOUjurisdictionsasdefinedonastatewidebasis

usingtheCalEnviroScreentool(seetable6).AssumingCalEnviroScreenisusedonastatewide

25Questions5,and6and23oftheALJ’sJuly8,2016Rulingarecoveredinthissection.

26AB693.Section1.(e)

27AB693Section1(e).

24

basisfortheMultifamilySolarRoofsProgram,weproposedthat30%oftheprogram’sfunding

onanannualbasisbeallocatedforuseinDACs.IfCalEnviroScreenisusedbyIOUservice

territoryorsomecombinationofserviceterritoryorstatewide,thentheCommissionwould

needtocalculatethenewpercentagesofDAC-eligiblebuildingsandadjustthefunding

allocationaccordingly.

FlexibilityinManagingTarget

TosuccessfullyimplementtheMultifamilySolarRoofsProgram,theProgram

Administrator(PA)shouldhaveflexibilityduringafundingyeartomovefundsfroman

undersubscribedallocationcategorytoanoversubscribedcategorytoensurethatprogram

implementationisnotbottleneckedandsolarprojectsarebeinginstalledinatimelyand

efficientmanner.However,beforemovingfundsfromDACallocationsforthebenefitof

propertieslocatedoutsideofDACs,thePAshouldberequiredtoprovideadditionaloutreach

andtechnicalsupporttoundersubscribedareastoensurethatpropertieswithintheseareas

haveaccesstotheprogramfundingthatisavailable.Additionally,werecommendthatthePA

berequiredtofileanadviceletterbeforeshiftingfundstoensurethatstakeholdershavethe

opportunitytocommentontheproposedtransfer.

Anytransferthatisauthorizedshouldnotexceedthetotaldemandforincentivedollars

neededbytheotherbucket,andwhenapplicationsarereceivedintheundersubscribed

bucket,thoseapplicationsshouldbeprioritizedinanattempttopreservetheoriginalallocation

asmuchaspossible.ToensurethatfundingtargetsaremetforDACs,theProgram

Administratorshouldberequiredtomakeadjustmentsinfutureprogramyearallocationsto

ensurethatoverthecourseoftheprogramthefundingallocationtargetsforDACsaremeet.

OtherGeographicDiversityConsiderations

InadditiontoallocatingincentivedollarsaccordingtoDACandnon-DACdesignations,

TheProgramAdministratorshouldtrackreservationsandinstallationstoensuregeographic

diversitythroughoutCalifornia.AB693aimstoinstallqualifiedsystems“inamannerthat

25

representsthegeographicdiversityofthestate.”28Accordinglythedistributionofsolar

installationsandfundingcommitmentsisalsoimportantintermsofwhethertheprojectisin

urban,suburban,andruralcommunities.

WhilewedonotrecommendspecificfundingorMWtargetsbasedontheseorother

geographicdesignations,werecommendthattheProgramAdministratormakeeffortsto

ensurethatlow-incomemultifamilybuildingownersandtenantsinallgeographicsettings

benefitfromgoingsolar.ThisapproachcouldbesimilartowhatoccursintheSASHprogram

andtheeffortsmadetoensurethatallcountieswithinthestatebenefitfromprogram

investments.

ResourceAllocationPlanandGoals

Toimplementtheproposedtargets,werecommendthattheProgramAdministrator

prepareaResourceAllocationPlanandsetanannualfundingtargetsDACsandnon-DACthatis

basedonavailablefundingandassessmentofsolarmarketpotentialanddemands,aswell

generalconsiderationforachievingbroaderstatewidegeographicdiversityobjectives.

WeproposethattheResourceAllocationPlanshouldbedevelopedandupdated

annuallyinconsultationwithenvironmentaljusticeandothercommunity-basedorganizations

todevelopprioritiesandstrategiesformeetinggeographicdiversitygoalsandobjectives.The

goaloftheplanshouldbetodevelopgeneralcriteriaandguidelinesforallocatingresources

andshouldidentifyadditionalactionsnecessarytoaddresssolaraccessbarriers.Additional

actionsforDACsshouldminimallyincludeenhancedcommunityengagement,tenantand

propertyownereducationonsolarbenefits,andtechnicalsupportforprojectimplementation.

AnnualupdatestoResourceAllocationPlansshouldadjustallocationprioritiesandoutreach

effortstoensurethatgeographicdiversitygoalsandobjectivesareachievedthroughoutthe

durationoftheprogram.

Intrackingprogramallocations,werecommendthattheProgramAdministratoradopt

metricstohelpguideoutreachandtechnicalsupportactivitiesincluding:

i. Numberofsolarinstallations(ProjectsreservedandInstalled).

28AB693Section1(e).

26

ii. Numberoflow-incomerentersreceivingsolarbenefits(Projectsreservedand

Installed).

iii. NumberofCAREeligiblecustomersreachedbyprogram(Projectsreservedand

Installed).

iv. AmountofPVgenerationallocatedtooffsettenantusage(Projectsreservedand

Installed).

v. Numberoflocalhiresfromsolarprojects.

CountingTowardsAB327Compliance

AB693providesthattheMultifamilySolarRoofsprogram“maycounttowardthe

satisfactionofthecommission’sobligationtoensurethatspecificalternativesdesignedfor

growthamongresidentialcustomersindisadvantagedcommunities…”29

ThequalifiedpropertiesunderAB693representaverysmallsegmentoftheresidential

marketswithinDACs.EnergyDivisionstaffhavereportedthattherearenine(9)millionpeople

residingintop25%ofimpactedcommunitiesandthatonaverage,54%ofthetotalpopulation

DACsarelow-income30Incontrast,therearefewerthan100,000householdsresidinginAB

693-qualifiedmultifamilyhouseholdsinDACswithinIOUjurisdictions.

IfAB693adoptionratescountedtowardsthespecialeffortsunderAB327itcouldskew

thespecificalternativesadoptedpursuanttoAB327toanarrowsegmentoftheresidential

marketinDACs.ThisisbecauseAB327willlikelytargetothermarketsegments(e.g.,single-

familyhomeownersorrenters,multifamilybuildingsthatarelessthan5units).Thisresult

wouldbecontrarytotheintentofAB327.Andwethereforestronglyrecommendagainst

countingAB693resultstowardsAB327implementationgoals.

Severalpartieshaveexpressedadesiretotargetdifferentmarketsegmentsforthe

purposesofAB327sinceAB693isalreadytargetedlow-incomemultifamilytenants,andother

programswithsimilarqualifyingcriteriacouldleaveoutmarketsegmentsnottargetedbyAB

29AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(b)(1).

30EnergyDivisionStaffPaperPresentingProposalsforAlternativestotheNEMSuccessorTariffor

ContractforResidentialCustomersinDisadvantagedCommunitiesinCompliancewithAB327,June3

2015.Low-incomeisdefinedasatorbelow200%oftheFederalPovertyLevel,whichcorrespondswith

theincomeeligibilityrequirementsofCARE.

27

693,beduplicative,andadministrativelyburdensome.31Werecommendthatthedifferent

residentalmarketsegmentsareconsideredseparatelyintrackingsolaradoptionrates.For

example,installationsundertheAB693programshouldnotcounttowardsAB327obligations

ifthespecificalternativeadoptedpursuanttoAB327targetssingle-familyhomeowneror

rentersorlow-incomemultifamilybuildingswithlessthanfiveunits.ThiswillensurethatAB

693doesnotswallowupthe327programincontraventiontothemandateofbothAB327and

AB693.

31See,e.g.,GreenliningOpeningCommentsonALJRulingSeekingCommentonAB693pp.5-6(Nov.2,

2015);GRIDOpeningCommentsonALJRulingSeekingCommentonAB693pp.4-9(Nov.2,2015);

MASHCoal.OpeningCommentsonALJRulingSeekingCommentonAB693pp.2-6(Nov.2,2015).

28

V. TenantAllocations32

AB693statesthat:

Thecommissionshallrequirethattheelectricitygeneratedbyqualifyingrenewable

energysystemsinstalledpursuanttotheprogrambeprimarilyusedtooffsetelectricity

usagebylow-incometenants.Theserequirementsmayincluderequiredcovenantsand

restrictionsindeeds.33

ApriorityoftheMultifamilySolarRoofsprogramisforamajorityofthegenerationfrom

thesolarenergysystemtooffsetelectricityusedandpaidforbytenants.Compliancewiththis

mandatecanbeaccomplishedbyestablishingdesignrequirementsforthesolarenergysystems

supportedbytheprogramanddoesnotrequireadditionalcovenantsordeedrestrictions.The

appropriatedesignofqualifiedsolarenergysystemsataffordablehousingpropertiesmust

consideranumberoffactorsthatlimitsystemsizing,andalsobalancetheneedtooffset

electricityuseforbothresidentialunitsandcommonareastomakethesolarinstallation

financialfeasibleforthepropertyowner.Werecommendthatthedesignofthesolarenergy

systemconsiderthekeyfactorslistedbelow.

TenantElectricityUsage

DesigningaPVsystematamultifamilypropertybasedontenantusagecanbe

complicated.Usagevarieswidelyacrossunitsandtodateaccesstotenantutilitydatahasbeen

limited.Cautionisnecessarytopreventsystemover-sizingtominimizefinancialrisksto

propertyowners.

Californiaelectricityusageisamongthelowestpercapitainthecountry.TheCalifornia

PublicUtilitiesCommission(CPUC)reportsthatCalifornia’saverageresidentialelectricityusage

was542kilowatt-hour(kWh)permonthin2014,andwas519kWhpermonthin2015.34This

findingisconsistentwithareportpreparedbyEvergreenEconomicsfortheEnergySavings

32Questions13and14oftheALJ’sJuly8,2016Rulingarecoveredinthissection.

33AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(f)(2).

34ReaganR.RockzsffordeandMarziaZafar,GeospatialAnalysisofCalifornia’sUtilityServices,California

PublicUtilitiesCommission,May23,2016.

29

Assistance(ESA)andCaliforniaAlternativeRateforEnergy(CARE)programs,whichreported

thatCAREcustomersin2012hadanaverageelectricityusageof547kWhpermonth.35

Inestimatingtenantelectricityusageinmultifamilyrentalbuildingsitshouldbenoted

thatthedatainthereferencedreportsincludesresidentialhouseholdsinbothmultifamilyand

singlefamilyhousingandthereforelikelyoverstatehouseholdelectricityuseinmultifamily

rentalbuildings.Thereareseveralintuitivereasonswhysinglefamilyhomeswouldhave

greaterplugloadandlightinguse.Singlefamilyhomesarelargerthanaffordablemultifamily

units,havemorephysicalspaceformoredevices,andmoreoccupantsconsumingenergy

services.Occupantsinsinglefamilybuildingsalsotendtohavemorehouseholdincometo

spendonincreasedamenities,suchasadditionaldevicesordeviceswithpremiumfeatures.

Furtheranalysisisneededtoestimatethemultifamilyelectricityuseoncedatais

availablefromutilitycompanies.Tosetabenchmarkforthepurposesofthisproposalwe

estimatedthatperunitmultifamilyelectricityuseisonaverage70%to80%oftheaverage

residentialusageinthestate,orapproximately4,200kWhto4,800kWhannually.36Assuming

that2kWofPVcapacityisprovidedonaveragetoeachunit,thePVgenerationcouldoffset

60%to70%ofeachunit’selectricityuse.

SizingofPVsystemsatmultifamilypropertiesmustalsoconsiderwidedifferencesin

energyuseamongtenantsatamultifamilysite.Thedifferencesareillustratedinthechart

below,whichwascontainedinreportpreparedbyRedwoodEnergyevaluatingtheaccuracyof

energymodelingforapartmentcomplexes.37

35EvergreenEconomics,NeedsAssessmentfortheEnergySavingsAssistanceandtheCalifornia

AlternateRatesforEnergyProgramsVolume1:SummaryReport,FinalReport,December16,2013.

PreparedforSouthernCaliforniaEdison,PacificGasandElectric,SouthernCaliforniaGas,SanDiegoGas

andElectricandtheCaliforniaPublic

UtilitiesCommission.36ThisestimateisgenerallyconsistentkWhusageseeninthelargeMultifamilyLowIncome

WeatherizationProgram.TheAssociationforEnergyAffordability(AEA)hasdevelopedatenantkWh

loadestimationtoolusingthe2009ResidentialApplianceSaturationStudy(RASS).TheRASSThestudy

yieldedenergyconsumptionestimatesfor27electricand10naturalgasresidentialend-usesand

appliancesaturationsforhouseholds.37RedwoodEnergy,IstheModelingProducedbytheCaliforniaUtilityAllowanceCalculatorAccurate?A

StudyofSevenApartmentComplexes,September15,2013.

30

ThechartabovereinforcesthatinimplementingtheMultifamilySolarRoofsProgramcaution

shouldbetakentoensurethatPVinstallationsarenotdesignedtooffset100%ofthe

aggregatedtenantuseatamultifamilyproperty.Doingthiswouldresultinsometenantsbeing

allocatedmorecreditsthantheycoulduseduringayear.Becauseallofthecreditsgenerated

cannotbeusedtooffsetelectricityuse,thecost-effectivenessandeconomicsoftheinvestment

isreduced.BasedonthevariationsseenintheanalysisconductedbyRedwoodEnergy,we

recommendthatoffsetstoaggregatedtenantloadsbecappedat70%pendingfurtheranalysis

todeterminemoreprecisePVscalingcriteriaforPVsystemsinmultifamilybuildings.Inthis

regard,energydatasharingrequirementsunderAB802canassistpropertyownersin

normalizingtenantelectricityusagetopreventsystemover-sizing.

UtilityTariffs

Theeconomicsofsolarenergysystemsarealsoaffectedbyutilitytariffs.PVsystems

servingcommonareashavegreatergridparitythanlow-incomerentalunitsbecauseof

significantdifferencesintheutilityratestructure.Additionally,asTime-of-Use(TOU)tariffsare

adoptedwithlaterpeakperiods,theunderlyingeconomicsofstand-alonePVsystemsis

adverselyaffected.Inthesecircumstances,moreintegratedenergystrategiesthatcombine

while the gas usage is 5% higher

Over a year the average electricity use of a Two Bedroo

and the average gas use matches the CUAC model to less

31

energyefficiencyandenergystoragewithsolarinstallationarenecessarytoensurethatthe

investmentremainscosteffectiveandpreservesandenhancesthevalueoftheinvestmentto

thetenantsandpropertyowners.Thechangingeconomicsofthesolarenergysystemis

addressedinmoredetailintheproposal’sdiscussionofsolarenergysystemsinSectionXI.

Theseeconomicsconsiderationsshouldbereflectedinthedesignofthesolarsystem.

CommonAreasatQualifiedMultifamilyProperties

Qualifiedmultifamilypropertieshavebothresidentialunitsandcommonareasthatare

usedbyresidents.Commonareasincludereceptionareas,multi-purposerooms,laundries,

hallways,elevators,stairways,andparkingarea.Whilethelegislation’sclearfocusisonthe

electricityusagewithinresidentialunits,AB693doesnotexcludecoverageofotherbuilding

areasusedbytenants.Moreover,becauseparticipationintheprogramisattheelectionofthe

ownersofaffordablehousingproperties,whotypicallyaremostmotivatedbytheprospectof

reducingelectricalcostsforowner-meteredareas,coverageofcommonareascannotbe

excludedwithoutmateriallyandadverselyaffectingprogramparticipation.Reducingelectrical

costsincommonareasofrent-restrictedaffordablehousingalsohastheancillarybenefitof

reducingoperatingcostsandthereforetheneedtoincreaserentsovertime.Insummary,we

recommendthattheMultifamilySolarRoofsProgramprovidesufficientflexibilitytooffset

commonareaelectricityusageforownerstoparticipateintheprogram.

Master-MeteredProperties

TherequirementsenactedbyAB693donotspecificallyexcludemastermetered

properties.Indeed,AB693onlyrequiresthatsolarsystembe“primarilyusedtooffset

electricityusagebylow-incometenants”andnotentirelyoffsettenantusage.38Theprogram’s

statedpriorityofoffsettingtenantelectricityusageisfulfilledwhetherornottheelectricityis

directlymeteredtothetenantorprovidedtothetenantbythepropertyowner.

38Cal.Pub.Res.Code§2870(f)(2)(emphasisadded);SeealsoCal.Pub.Res.Code§2870(g)(statingthe

requirementforwhentenantsparticipateviaVNEMinaseparatesectionofthebill,indicatingthatthat

therearetworequirementsunderthebill:oneforwhenthecommonareasareserved–thatthesystem

primarilyoffsettenantload-andanotherdescribingthebillreductionsanddirecteconomicbenefitsthe

tenantsreceivingtheprimaryoffsetmustreceive).

32

Excludingmaster-meteredpropertieswouldbedetrimentaltolow-incomerenters.In

thecontextofCalifornia’saffordablemultifamilyinventory,mastermeteredpropertiestypically

includeolderbuildings,whichhavehigherenergyuse,andbuildingsthatprovidehousingfor

specialneedsoratriskhousingpopulationssuchastheelderly,personswithdisabilities,single-

roomoccupancyhousing,andtransitionalhousingforthehomeless.Thesepropertiesare

highlyvulnerabletoutilitycostincreases,whichcanadverselyaffecttheproperty’sfinancial

stabilityandaffordability.ExcludingthesepropertieswouldruncountertoAB693’sexpress

purposeofprovidingassistancetolow-incomecustomerstomakesuretheycanaffordtopay

theirenergybills,reducingenergybillsforCAREcustomers,andmakingsolarsystemsmore

accessibletolow-incomeanddisadvantagedcommunities.39

Additionally,formaster-meteredbuildings,theinstallationofsolarenergysystemsto

offsetelectricityusedbytenantisanimportantstrategyformakingoperatingfundsavailableto

providetenantservices,makebuildingimprovements,andpreserveaffordablehousingoptions

forvulnerableat-riskpopulations.WeviewtheseoutcomesastenantbenefitsunderAB693.

Thisisespeciallyimportantfornon-profithousingorganizations,whicharesubjecttoadded

restrictionsrequiringpropertyincometobeusedfortenantservicesandbuilding

improvements.

Whilewedonothaveaprecisecountofaffordablemultifamilyrentalpropertiesthat

aremaster-meteredbecauseofdatabaselimitations,weestimatethatapproximately20%of

theaffordablehousinginventoryismaster-meteredfortheelectricityusedbylow-income

tenants.TheCommissionshouldnotexcludethissignificantportionofthelow-income

multifamilymarketanditsvulnerabletenantsinneedofthebenefitsofgoingsolar.

CriteriaforCriteriaDesigningSolarPVSystemsandSizingIncentives

Toaddresstheissuesdiscussedabove,werecommendthattheMultifamilySolarRoofs

Programsetcriteriaforthedesignofsolarsystemsthataresupportedthroughtheprogram’s

incentivestructure.Specifically,werecommendthatthefollowingcriteriabeadoptedto

ensurethatsolarenergysystemsareproperlysizedandthatincentivesareappropriately

39SeeAB693Section1(a),(b),&(e).

33

targetedtosolarenergysystemsthatoffsetelectricityusedbyorpaidforbylow-income

renters,whileprovidingflexibilitytoaddresssiteconditionsthatlimittheabilityoftheproperty

ownertoadequatelyservebothresidentsandcommonareas,andcircumstancethataffectthe

financialfeasibilityofthesolarinstallation:

§ BalancedSolarDesign:Thedesignofthesolarsystemsshouldbalancetheneedsofboth

theresidentsandpropertyownerstoensuretheproject’sfinancialfeasibilityaswellas

theowner’smotivationtoparticipateintheprogram.

§ PVAllocation:Atleast51%oftheelectricitygenerationshouldbeallocatedto

residentialunitsunlesssiteconditionslimitthesizingofthePVsystem.

§ TenantAreaService:Solarenergysystemsservingresidentialunitsshouldbelimitedto

70%orlessoftheaggregatedtenantelectricalusageatthequalifiedmultifamilysiteto

preventsystemoversizing,andshouldfactorinreductionstoconsumptionfromenergy

efficiencyimprovementsandbenefitsaccruedthroughstoragedeviceswhenapplicable.

§ CommonAreaService:Solarenergysystemsservingpropertycommonareasmayoffset

upto100percentofcommonareaelectricaldemandsafterconsideringtenantoffsets

andfactoringinenergyefficiencyimprovements.

§ MasterMeteredBuildings:Master-meteredbuildingsmayparticipateintheprogramon

theconditionthatenergysavingsfromtheinstalledsolarenergysystemsbeusedtopay

forsupportservicesprovidedtotenants,energyefficiencyimprovementsinresidential

units,orotherbuildingimprovementsbenefitingtenants.

§ PropertieswithSiteLimitations:Propertieswithsiteconditionslimitingtheabilityto

servebothresidentialunitsandcommonareasmayincreasetheallocationofPV

generationtooffsetcommonareausetotheextentneededtoensurethatthesolar

energyinstallationisfinanciallyfeasible.

§ AllocationstoTenantsandOtherQualifiedMultifamilySites:PVgenerationfromasolar

energysysteminstalledataqualifiedmultifamilysitemaybeallocatedtolow-income

tenantsatanotherqualifiedmultifamilypropertythatisownedbythesamenonprofit

housingorganizationandwithinthesameutilityjurisdiction.

DocumentationandVerificationofAllocation

Allocationsforsolarenergysystemsandupdatestosystemdesignandallocations

shouldbesubmittedtotheProgramAdministratoraspartoftheapplication,reservation,and

paymentprocess.Minimally,thedocumentationshouldprovide:

§ PVsystemsizeanddesigndetail(numberofmodules,inverters,annualkWh,etc.).

§ PVallocationsfortenantresidentialunitsandforcommonareas(annualkWhand

percentoftotal).

§ PVoffsetsfortenantresidentialunitsandforcommonareas(annualkWhandpercent

oftotal).

§ NumberofunitsatpropertyandnumberreceivingadirectPVallocation.

34

§ PVallocationsbyunittypeorsize(annualkWhandpercentofallocationbyunittype).

§ Otheroffsetsprovidedtotenantresidentialunitsandforcommonareasfromenergy

efficiencyandenergystoragesystems(annualkWhand/orannualkW).

§ Explanationofsiteconditionaffectingsolarenergysystemallocations.

§ Explanationiflessthan100%oftheunitsreceiveallocationsfromthesolarenergy

system.

TheProgramAdministratorshouldconductperiodicreviewstoverifythattheelectricity

generatedbyincentivizedsystemsisoffsettingelectricityusageoflow-incometenants.Thiscan

beaccomplishedaspartoftheenergybenchmarkingrequiredunderAB802,whichreflects

utilitydataprovidedbyutilitycompaniesontheenergyusageandsolarallocationsrecordedon

utilitymetersattheproperty.Werecommendthatthepropertyownercanberequiredto

providereportsfromenergybenchmarkingsystemstotheProgramAdministrationfora

prescribedperiodfollowingtheinstallationofasolarenergysystem.Shouldfurtheranalysisbe

required,theProgramAdministratorcouldrequestutilitydatafromtherespectiveutility

companiesorconductselectedsiteauditsofutilitybillingrecordstoverifycompliance.

35

VI. TenantBenefits40

UndertheMultifamilySolarRoofsProgram,theeconomicbenefitsfromtheelectricity

allocatedtotenantsfromasolarenergysysteminstalledataqualifiedaffordablemultifamily

rentalpropertymustbeprovidedtotenantsresidingataqualifiedmultifamilypropertyasa

creditontheirutilitybills.41Inthisregard,AB693providesthat:

Thecommissionshallensurethatutilitybillreductionsareachievedthroughtariffsthat

allowfortheallocationofcredits,suchasvirtualnetmeteringtariffsdesignedfor

MultifamilyAffordableSolarHousingProgramparticipants,orothertariffsthatmaybe

adoptedbythecommissionpursuanttoSection2827.1.42

VirtualNetMetering

Multifamilyindividuallymeteredrenterhouseholdsareachallengingsegmentforsolar

PVadoptionduetotheproblemofdistributingthebenefitsofsystemoutputamong

individuallymeteredoccupants.Toaddressthisissue,theCPUCdirectedtheIOUstofiletariffs

forVirtualNetEnergyMetering(VNEM).43ThespecificintentofVNEMwastohelplow-income

residentsreceivedirectbenefitsfromasolarsysteminstalledatamultifamilyproperty.Based

onthemeritsofthesetariffs,theCPUCexpandedVNEMtoallmulti-tenant,multi-meter

propertiesin2011andincludedallNEM-eligibletechnologiesforeligibility.44TheCPUCreports

thatasoftheendof2015therewereover274(non-MASH)VNEMprojectsusingaVNEMtariff

withacombinedcapacityof8.1MW.45GiventhatVNEMisawell-establishedandsuccessful

mechanismfordistributingthebenefitsofsystemoutputamongindividuallymetered

occupants,werecommendthatVNEMtariffsbeusedfortheMultifamilySolarRoofsProgram

withmodificationstoaddressthefollowingissues:

§ EffectofNon-BypassableChargesandDesignofTOURateStructures–TheCPUCfinal

decisionintheNEM2.0proceedingrequiresthatNEMsuccessorcustomerspayfor


41AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(g)(1)states,“low-income

tenantswhoparticipateintheprogramshallreceivecreditsonutilitybillsfromtheprogram.”42AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(g)(1).

43D.08-10-036

44CaliforniaSolarInitiativeAnnualProgramAssessment,June2016.CaliforniaPublicUtilities

Commission.45Ibid.

36

Non-BypassableCharges(NBC)onallenergyconsumedfromthegrid.NBCsareusedto

supportlow-incomeenergyservicesandprogram.WegenerallysupporttheuseofNBC

intheprogram,butrequeststhattheCommissionconsiderimpactsofNBCsinthe

designofTOUtariffsforlow-incometenants.NBC’swouldequatetoanaddedtwo

centsormoreperkWh.Foralow-incomehouseholdonCARE,NBCswouldadd15%to

20%toaCAREhousehold’sutilitybill.CoupledwitharequirementtoconverttoTOU

rates,andnewutilityratestructuresthatmovepeakperiodstoeveninghours,the

addedchargesandutilitycostswillsubstantiallydiminishthefinancialbenefitsofthe

program.Accordingly,werecommendthattheVNEMtariffsincorporateTOUrate

structuresthatdonotadverselyaffecttheeconomicbenefitsthatwouldotherwisebe

receivedbytenants.

§ TenantAggregationatQualifiedMultifamilySites–Thetariffratedesignforthe

MultifamilySolarRoofsprogramshouldalsorecognizethatmid-riseandhigh-rise

multifamilydwellingsarenotwellalignedwiththeobjectiveofscalingPVsystemsto

offsettenantelectricityloadsbecauseofroofspacelimitationsandothersite

conditions.Theseconditionsprimarilyaffectpropertieslocatedindensermoreurban

areasandnewinfilldevelopmentslocatedalongtransitcorridors,whicharesupported

byinvestmentsfromotherCapandTradeprograms.Toprovidesolaraccesstolow-

incometenantsinthesepropertiesatariffstructureisneededtopermitthegeneration

fromsolarenergysystemsataqualifiedmultifamilysitetobesharedwithlow-income

tenantsresidingatotherqualifiedmultifamilypropertiesthatareunabletoprovide

solartotenantsbecauseofsiteconstraints.

Werecommendthatnonprofitcontrolledaffordablemultifamilypropertyownerswith

multiplequalifiedpropertiesintheirinventoriesbepermitteduseAB693incentivesto

developsolarinstallationsatoneormorequalifiedmultifamilysitesthatarescaledto

servelow-incometenantsresidingatotherqualifiedmultifamilysitesownedbythe

samenonprofitcontrolledhousingorganizationandwithinthesameutilityterritory.

Underthisapproach,whichissimilartotariffsadoptedinMassachusetts46and

permissibleunderCalifornialaw47,thepropertyownerwouldprovidewrittennoticeto

46SeeMassachusettsGreenCommunitiesAct.Canbeviewedat

https://malegislature.gov/Laws/SessionLaws/Acts/2008/Chapter16947AB693onlyrequiresthatthe“qualifyingsolarenergysystem”beinstalledoneligibleproperties,and

thatthosesystems“primarily…offsetelectricitybylow-incometenants[ofeligiblebuildings].”SeeCal.

Pub.Res.Code§2870(a)(3)&(4),(f)(1)&(2).Inturn,AB693defines“solarenergysystem”bythe

criteriainCal.Pub.Res.Codesection25782,whichrequiresinrelevantpart:(1)Thesolarenergysystem

isintendedprimarilytooffsetpartoralloftheconsumer’sownelectricitydemand;and(2)Thesolar

energysystemislocatedonthesamepremisesoftheend-useconsumerwheretheconsumer’sown

electricitydemandislocated.Cal.Pub.Res.Code§25782(2),(5)(emphasisadded).Thesesections

thereforeonlyrequirethatthebuildingowner’sownusage,thecommonareameter(s)connectedto

thesolarsystem,needtobepartiallyoffset.Thetenantswouldnothavetobeonsite,however,because

tenantswouldalwaysreceivebillcreditsviaVNEMonindividuallymeteredproperties.Inotherwords,

37

theProgramAdministratorandutilitiesoftheotherqualifiedmultifamilyproperties

thatwouldbeservedbythesystem,themeterinformationforthetenantsatthe

secondarysites,anddesignatetheamountsofthecreditsallocatedtosuchcustomers

similartowhatisrequiredunderVNEM.

§ TenantContributionsforSolarO&M–Totheextentthattheprogramincentivesand

energysavingsfromcommonareasarenotavailableorsufficienttocoverongoing

operationandmaintenance(O&M)costsforthesolarenergysysteminclusiveof

equipmentreplacement,amechanismisrequiredtofacilitatethecollectionof

contributionsfromtenantssothattheO&Mcostsofthesolarenergysystemcanbe

covered.

Accordingly,werecommendthatanO&MchargebeincorporateintheVNEMtariff,and

includedonmonthlyutilitybillsalongwiththesolaroffsetsandcreditsprovidedtothe

customer.ThechargeshouldreflectaperkWhestimatebasisofreasonableand

ordinaryO&McostsandbebilledonaperkWhbasisbasedonthenumberofkWh

offsetsallocatedtothetenant.TheallowableO&Mchargesshouldnotexceedtwo

centsperkWh48orexceed20%oftheoffsets,toensurethattenantsreceiveadirect

economicbenefit.

ifthebuildingownerisoffsettingpartofthecommonarealoadandthesystemislocatedontheeligible

buildingwherethisoffsetisoccurring,itmeetsthecriteriaof25782(2)and(5).Inaddition,AB693only

statesthatthesystemmustprimarilyoffsettenantload,butdoesnotspecifythatthosetenantsmust

liveinthesamebuildingwherethesystemissited.SeeCal.Pub.Res.Code§2870(f)(2).Moreover,AB

693permitsaVNEMtariff“suchasvirtualnetmeteringtariffsdesignedforMultifamilyAffordableSolar

HousingProgramparticipantsorothertariffsthatmaybeadoptedbythecommissionpursuantto

Section2827.1.”Cal.Pub.Res.Code§2870(g)(1).Accordingly,theVNEMtariffneednotbeidenticalto

theMASHVNEMtariff,whichlimitscreditstoonsitetenants,becausetheVNEMtariffcouldbe

developedinthe“disadvantagedcommunities”portionofAB327.Furthermore,althoughnotadopted

bytheCommissioninPhaseI,theJointSolarPartiesandtheEnergyDivisionStaffproposedvarying

versionsofexpandedVNEMthatwouldallowtheallocationofbillcreditstooffsitetenantswithinthe

sameIOUserviceterritoryandwiththesamecensustractinthesameIOUserviceterritory,

respectively.SeeAdministrativeLawJudge’sRulingAcceptingIntotheRecordEnergyDivisionStaff

PapersontheAB327SuccessorTarifforContract,Attachment2:EnergyDivisionStaffDisadvantaged

CommunitiesProposalforAB327,p.2-12(June4,2015);JointSolarPartiesProposal,p.v(Aug.3,2015).

Theseproposalsarestillunderconsiderationandassuch,theCommissionshouldnotforeclosethe

possibilitythatAB693couldincludeanexpandedVNEMtariffthatwouldallowoff-siteeligiblelow-

incometenantstoreceiveVNEMcreditsfromasystemlocatedonanotherbuildingownedbythesame

buildingowner.Thistariffwouldbesimilartonetenergymeteringaggregation,althoughtheproperties

wouldnotneedtobecontiguous.48CurrentO&Mchargesareestimatedat$0.02/kWh.ThecollectionofO&Mchargeswouldbeprovided

topropertyownerandretainedinareserveaccountforscheduledmaintenanceandequipment

replacement.

38

UtilityAllowances

ThereisconsiderableconfusionregardingutilityallowancesinthevariousAB693-

eligibleaffordablehousingprogramsandwhetherapplicableutilityallowancepoliciesand

guidelinescanoperatetoreduceoreliminateprescribedsolarbenefitstolow-incometenants.

Inaffordablehousing,thetotalamountofregulatedrentpaidbytenantsincludesbothhousing

costsandareasonableamountofutilities.Wherethetenantpaysutilitycostsdirectlytothe

utilityprovider,ownersmustprovideautilityallowancetocredittenantsforareasonable

estimateofthosecosts.Theutilityallowanceisnotequaltotheactualcostspaidbyeach

tenant.Theseallowancesvarybyunitsize,anddependontherulesapplicabletoeach

program.Utilityallowancesareupdatedperiodically,usuallyannually.Overtime,ifutility

allowancesareincreasedtoreflectincreasedutilitycosts,suchasrateincreases,theamountof

thetenantrentpaidtotheownerdecreasesbythesamedollaramount.Conversely,ifthe

utilityallowanceisdecreasedforanyreason,possiblyincludingreducedelectricitycostsfroma

solarinstallation,theamountofthetenant’srentpaymenttotheownermayincrease.

Whetherreducedelectricitycostsduetosolarmustorcouldtriggerchangesintheutility

allowancesataspecificaffordablepropertydependsonthetypeofutilityallowance

methodologybeingusedunderapplicableprogramrules,andwhetherthatmethodologycan

bechangedbytheowner.

FormostAB693-eligibleaffordablehousingproperties,utilityallowancesare

determinedineitheroftwoways,using:(1)“project-specific”methodologies,suchasactual

consumptionbillingdataorenergymodelingatthespecificproperty;or(2)aschedule,usually

providedbythelocalPublicHousingAuthority(PHA),whichisbaseduponcommunity-wide

datathatreflectsutilityconsumptionintheoverallhousingstock.Generally,propertiesthat

haverentalassistanceunderaHUDorRuralDevelopment(RD)program(e.g.,project-based

Section8orRDRentalAssistance)mustuseaproject-specificmethodology,usuallyactual

consumptiondata.ThiscategoryincludesthoseLow-IncomeHousingTaxCreditpropertiesthat

alsohaveHUDorRDRentalAssistance.MostaffordablepropertiessupportedbyLIHTCor

Project-BasedVouchersuseaPHAschedule,althoughasmallnumberofLIHTCproperties

39

developedsince2009haveelectedtoestablishaproject-specificallowanceusingaTCAC-

approvedenergyconsumptionmodel,theCaliforniaUtilityAllowanceCalculator(CUAC).

IntheMASHprogram,adjustingutilityallowanceswasseenaspartofthatprogram’s

financingstrategyforLIHTCproperties.Underthatprogram,becauseincentivelevelswerenot

sufficienttocoverthecostsofsolarinstallationsservinglow-incometenants,theMASH

programexplicitlypermittedpropertyownerstoadjust(lower)utilityallowancesthrougha

specialprocesscreatedbytheCaliforniaTaxCreditAllocationCommittee(TCAC)forrecipients

ofMASHfunding.ThisrestrictedprocessrequiresMASHprojectsseekingutilityallowance

adjustmentstoundergoananalysisusingtheCaliforniaUtilityAllowanceCalculator(CUAC)to

settheadjustmentlevel.Theadjustmentswouldincreasethetenant’srentpaymenttothe

propertyandtherebyincreasethecashflowtothepropertyownerstosupportimprovement

costs(orincreasetheproperty’sNetOperatingIncome).

Thisapproachprovedunsuccessfulforanumberofreasons,49andsincetheMASH

2.0programwaslaunchednearlyayearago,TCAChasprocessedrelativelyfewutility

allowancesadjustments.50Moreover,utilityallowanceadjustmentstoaccommodatesolarare

notpossibleforHUD-assistedorUSDARuralDevelopment(USDA-RD)propertiesunderthe

MASHprogram.Theseagencieshavenoclearpolicyonwhetherorhowallowancescanor

shouldbeadjustedtoaccountforMASH-requireddirecttenantbenefits,andonhowany

subsidysavingstotheagencyfromanyallowancereductionsthatmightoccurcanbeshared

withownerstocovergapsinfinancinginstallations.

UndertherequirementssetbyAB693,incontrasttoMASH2.0,allofthesolar

generationallocatedtotenantsisintendedtoprovidedirectoffsetsprovidingeconomic

benefitstothetenants.Further,underAB693,“thecommissionshallensurethatelectrical

corporationtariffstructuresaffectingthelow-incometenantsparticipatingintheprogram

49Problemsencounteredincludedtheabsenceofproject-specificmethodologiescapableofproviding

sharedsavingstobothtenantsandowners(inthecaseofHUDproperties),inconsistentPublicHousing

Authorityutilityallowanceschedulesresultinginloweradjustmentsfromsolar,publicpoliciesrequiring

theuseofdifferentutilitytariffsincalculatingutilityallowancesresultingincostincreasestobaseline

utilitycostestimates,thecostandcomplexityofCUACadministration,andmodelinguncertainties.50AccordingtotheCaliforniaTaxCreditAllocationCommission,therearecurrentlyupto20projects

undertakingutilityallowancereviewsusingtheCUAC,andasofJune2016onlyoneexistingLIHTC

propertyinstallingaMASH2.0solarprojectreceivedapprovalforautilityallowanceadjustment.

40

continuetoprovideadirecteconomicbenefitfromthequalifyingsolarenergysystem.”51As

such,theCPUCshouldcarefullyevaluatetheeffectofutilityallowancepoliciestodetermine

whetherornotsuchpoliciesorpracticeswouldaffecttheactualeconomicbenefitsreceivedby

low-incometenanthouseholds.

OurpreliminaryassessmentisthatAB693’stenantbenefitrequirementwillnotbe

materiallyimpactedforthevastmajorityofqualifiedmultifamilyproperties:

§ LIHTCproperties–LIHTCpropertiescomprise70%oftheeligiblemultifamilyproperty

inventory.Fortheseproperties,ownerstypicallysetutilityallowancesusingPHAutility

allowanceschedules.BecausethePHAscheduleisbasedonacommunitystandard,thesolar

creditsreceivedbythetenanthouseholdwouldnotaffecttheamountoftheutilityallowance.Theother

methodavailabletoLIHTCpropertiesplacedinservicesince2009istheCaliforniaUtilityAllowance

Calculator(CUAC).Underthismethodthesolarproductionallocatedtotenantscanberemovedfromthe

calculation,sothattheresultingproject-specificallowanceisunaffectedbyPVoffsetsfortenantloads.

Additionally,forsolarinstallationsfundedunderAB693,hismethodwouldbeavailableonlyfornew

constructionprojects.ExistingLIHTCpropertiesparticipatingintheMultifamilySolarRoofsprogramare

notabletousetheCUACunderTCAC’scurrentpolicies.Insummary,forLIHTCpropertieswithout

HUDorRDrentalassistance,thebenefitsprovidedtolow-incometenantswillnotbe

adverselyaffectedbyfederalhousingpoliciesandthesebenefitsarecurrently

safeguardedfromrecapture.ToensurethatpropertyownersusingtheCUACdonot

inadvertentlytakesolarcreditsintendedforthesolebenefitofthetenants,the

Commissioncouldrequirethatsolarcreditsberemovedfromutilityallowance

calculations.

§ HUD-assistedproperties–HUD-assistedpropertiescompriseapproximately22%ofthe

eligibleinventory.ThoseHUD-assistedAB693-eligiblepropertiesmustuseaproject-

specificactualconsumptionmethodologytocalculateutilityallowancesunderHUD

MultifamilyNotice,H-2015-04.52Thismethodologycurrentlypresentsapotential

conflictwithAB693’stenantbenefitrequirements.UnderthisNotice,absentfurther

modification,tenantbenefitswillbeconsideredutilitycostreductionsdriving

commensuratereductionsinutilityallowancesandincreasesintenantrent

contributionstoowners.Byreducingsubsidypayments,andpreventingownersfrom

accessingthesavingsifneeded,HUDwillcapturealloftheAB693-requiredtenant

benefitsfromreducedelectricitybillsfromlow-incomerenters,ineffectmakingHUD

thebeneficiaryofthestate’sinvestmentandthisprogram’senergysavings.HUD’s

guidelineswereestablishedthroughaninformalinternalprocess(issuingaNotice),not

throughformalnotice-and-commentrulemaking.Thus,HUDapparentlyhas

considerablediscretioninsettingmethodologiesorotherguidelinesforcalculating

51AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(g)(2).

52HUDNoticeH-2015-04,MethodologyforCompletingaMultifamilyHousingUtilityAnalysis,June22,

2015.

41

utilityallowancesforprivatelyownedHUD-assistedproperties.HUDcouldstillestablish

revisedguidelinestorequireownerstodisregardtheAB693solaroffsetorcredititback

totenantsintheirutilityallowancecalculations.HUDhasbeenadvisedofthispotential

conflict,andonApril6,2016CHPCprovidedHUDanissuepaperwithspecific

recommendationtolargelyprotecttenantbenefits.

Insummary,solutionswithinthediscretionofthefederalagencyexisttoresolvethis

conflictoverHUD’scaptureofintendedtenantbenefits.ShouldHUDprovide

informationtothecontrary,theCommissioncanconsiderwhethertoadjustthe

program’stenantbenefitrequirementstoaccommodateHUDproperties.Inthisregard,

itshouldbenotedthatnosuchaccommodationwasprovidedfortheMASH2program.

ShouldanaccommodationfortheMultifamilySolarRoofsProgrambeconsidered,since

HUDwouldbetheprimarybeneficiaryofthesolarinstallationsfundedbytheStateof

California,theCommissionshouldconsiderwhatleveloffinancialcontributionis

appropriatefromHUDorHUDpropertyownerstoreducethelevelofstateincentives

commensuratewiththereductioninbenefitsprovidedtoCaliforniarenters.

§ ActionsRequiredtoSafeguardTenantBenefitsfromUtilityAllowanceRecapture–To

ensurethatpublicallyregulatedutilityallowancepolicesdonotconflictwithAB693’s

tenantbenefitprovisions,werecommendtheCPUCandtheProgramAdministrator

takethefollowingsteps:

i. Requireownercertificationsthatautilityallowancereductionorincreasein

tenantrentpaymentwillnotbeundertakenasaresultoftheinstallationofthe

solarenergysystem.

ii. TheCommissionshouldeffectuatestatepolicybyadvocatingthatHUD,USDA-

RDandotherstate,federal,andlocalagenciesnotcountthedirectedtenant

benefitsasincomeindeterminingthetenant'srentcontribution.

iii. TheProgramAdministratorshouldconductperiodicmonitoringandverification

ofhousingtypeswithknownutilityallowancepolicyconflictstoensurethat

utilityallowancesarenotreducedasaresultofthesolarenergysystemfunded

underAB693.

iv. EnsurethatifutilityallowancereductionsareallowedbytheCommissionasa

resultoftheinstallationofasolarenergysystemfundedunderAB693,thereisa

correspondingdecreaseinthelevelofincentivespaid.

42

DocumentationandVerificationofTenantBenefits

AB693requiresthat:

“Thecommissionshallensurethatelectricalcorporationtariffstructuresaffectingthe

low-incometenantsparticipatingintheprogramcontinuetoprovideadirecteconomic

benefitfromthequalifyingsolarenergysystem.”53

ToimplementtenantbenefitrequirementsfortheMultifamilySolarRoofsProgramwe

recommendthattheCommissionrequire:

§ AffidavitofCompliancewithTenantBenefitRequirements–Propertyownersmustcertify

thattheywillnotundertakeautilityallowancereductionorincreasetotenantrent

paymentsasaresultoftheinstallationofthesolarenergysystemduringtheten-year

periodfollowinginstallation.

§ ProgramAdministratorDueDiligence–TheProgramAdministratormustconduct

reasonableduediligencetodeterminethattenantswillreceiveandcontinuetoreceivea

directbenefitundertheprogram.Theduediligenceshouldincludeassessmentsof:

i. SolarPVoffsetprovidedtotenants

ii. Addedcostspaidbytenantsforadditionalchargesorfeesorutilityratechanges

resultingfromtheinstallationofasolarenergysystemattheproperty

iii. Neteconomicbenefitreceivedbythelow-incometenants

§ Transparency–Asbenefitrecipients,tenantsshouldbeallowedtoverifythatpromised

tenantbenefitsareactuallydelivered.Calculationsoftenantbenefitsandsupporting

documentsforthepropertyshouldbemadeavailabletotenantsortheirrepresentatives.


43

VII. SolarFinancingandOwnershipStructures54

Ingeneral,affordablehousingpropertyownersandtenantspreferPVsystemownership

toThirdPartyOwner(TPO)transactions.Purchasingoptionsprovidelowerlong-termkWh

costsandgreaterfinancialbenefitstopropertyownersandtenants,evenwithfinancingcosts,

andposelessout-yearfinancialriskincomparisontoTPOagreementsthatmaycontaincost

escalatorstobolsterinvestorreturns.Howevertoaccomplishsystemownershipobjectives

propertyownersrequireeitherdeeperincentivesoroff-bookprojectfinancialtools,suchason-

billfinancing,tocovercosts.

TPOscanofferimportantoptionswherepropertyfinancingoroff-bookfinancing

optionsarenotavailabletocoversolarprojectcosts.Ownersofrentrestrictedaffordable

multifamilyhousingneedone-stopalternativesthatprovideaccesstofinancingwithnofront-

endcosts.Largesolarcompanieswithfinancingandinvestmentfundscapableofdelivering

integratedsolarservicestypicallyprovidetheseoptions.Theseoptionsmaybelessavailablefor

smallersolarcompaniestoparticipateinthisprogram.

Anumberofaffordablehousingorganizationshavesoughttodeveloptheirown

investmententitiestoenableportfoliofinancingofsolarprojects,butthesestructuresare

complexandcostlytodevelop,andfurtherassistanceisneedtobringthismechanismsonline.

Ineithertypeoftransaction–propertypurchaseorTPO–affordablehousingownersseek

sufficientupfrontresourcestominimizethecostofthesolarinvestmenttotheproperty,

increasethevalueoftheinvestment,andminimizefinancialrisk.Becausethebenefitsfrom

resident-servingsolarenergysystemsmustberetainedbythelow-incomebeneficiariesofthe

program,propertyownersgenerallyrequirethatthecostofsolarenergysystemsserving

residentialunitseitherbefullyfundedfromincentivesandanyotherresourcethatcanbe

reasonablyleveraged.

Additionally,propertyownersareconcernedabouthowoperationsandmaintenance

(O&M)costsforthesolarsystemswillbecovered.AssumingthatO&Mcostsare$0.02/kWh,

O&Mcostsfora150kWPVsystemcouldaverageover$5,000peryear.Withoutasourceto

coverthiscost,addedO&Mcostsputafinancialburdenontheproperty;therebydiscouraging

54Questions11,15,and16oftheALJ’sJuly8,2016Rulingarecoveredinthissection.

44

installationor,ifnotanticipatedinthefinancialanalysis,placesthepropertyatrisk.Fundingfor

O&McostsmustbeaddressedinorderforAB693implementationtobesuccessful.

OwnershipPathways

Themostdirectwayforpropertyownerstoownsolarenergysystemsiswherethe

propertyownerisleveragingLowIncomeHousingTaxCreditsandfederalinvestmenttax

creditsaspartofnewconstructionorprojectrefinancingandrecapitalization.LIHTC-financed

newconstructionandrehabilitationprojectsinparticularprovideopportunitiestoleverage

resourcesinconjunctionwiththeMultifamilySolarRoofsProgramtoinstallofsolarenergy

systems.In2015alone,theTCACawardedLIHTCsworthwellover$2.5billionto221new

affordablehousingpropertiesandover18,000low-incomeresidentialunits.Bytargeting

projectsreceivingLIHTCfunding,theMultifamilySolarRoofsprogramcouldloweraverage

incentivepaymentsandoptimizethereachoftheprogram.InordertotargetLIHTCproperties

andleveragethisfinancingeffectively,however,incentivereservationperiodsforthe

MultifamilySolarRoofsProgramwillneedto18to36monthstomatchthelongerdevelopment

periodsassociatedwiththeselargerconstructionprojects.

Additionally,theLIHTCprogramencouragestheadoptionofabove-codeenergybuilding

standardsfornewconstruction,55andrehabilitationprojectsincludeenergyefficiency

investmentstoimproveenergyefficiencybyatleast15%.56Hence,propertieswithLIHTC

fundingwillautomaticallyautomaticallymeettheenergyefficiencyrequirementsadoptedin

AB693.

ThirdPartyOwnershipIssuesandRestrictions

ThereareanumberofissuesuniquetoTPOstructuresthatshouldbeaddressesinthe

AB693programdesignshouldaddressincluding:

§ TPOMWandFundingLimitationUndertheMultifamilySolarRoofsProgram–TheALJ

askedspecificquestiononwhetherprogramshouldplacelimitsontheamountof

55In2015,58ofthe63LIHTCfundednewconstructionprojectsawarded9%TaxCreditsachievedLEED

GoldorSilverstandards,56In2015,all27LIHTCfindingrehabilitationprojectsreceiving9%TaxCreditincreasesenergyefficiency

by20%irmoreand30%oftheprojectsincludedaddedsustainabilitymeasuressuchassolarPV.

45

incentivepaymentsthatcanbepaidtoprojectsdevelopedbyanyonethird-partyowner,

orwhethertheprogramshouldincludealimitonthenumberofMWsforprojects

developedbyanyonethird-partyowner,supplier,orinstaller.

UndertheMASH2.0program,somesolarprovidershavesoughttomonopolizethe

affordablehousingmarketthroughMASH’sreservationsystem.Thishasresultedinmore

limitedcontractorparticipationandhaslockedoutsomeaffordablehousingproperties

wishingtoparticipateintheprogram.Accordingly,werecommendthattheProgram

AdministratorphasetheSolarRoofsapplicationandreservationprocessduringayearand

limitthenumberofprojectreservationsthatasolarcontractororsupplierortheir

affiliatescanencumberduringtheseperiods,tobuildamorediverseandviablesolar

marketforaffordablehousing.

Toaddressthisproblemthefollowingcorrectiveactionsarenecessary:

i. Discontinuethepracticeofallowingsolarcompaniestoenrollmultipleproperties

forapropertyowneratonetime.

ii. Requirethatmultifamilypropertyownersmakeprojectapplications.

iii. Establishprocesstophaseapplicationapprovalsonaquarterlybasis

iv. Setalimitonprojectreservationsthatahousingapplicantcanreceiveduringa

quarter.

v. Providepropertyownerswithconditional(60day)reservationstopermithousing

organizationstoobtaincompetitivebidsfrommultiplesolarcontractorsbefore

lockinginreservations.

§ TPOPricing–WhereaTPOagreementisproposed,andasignificantportionofthe

project’scostarecoveredbyincentivesandotherfinancialcontributionsfromthe

property,theTPOagreementshouldbestructuredaspre-paidagreementtoensurethat

thepropertyownerandthelow-incometenantsreceivecreditfortheseAB693

investments.Additionally,werecommendthattheProgramAdministratormonitorper

kWhchargessetbysolarprovidersunderTPOagreementstoensurethattheperkWh

changesarealignedwiththeamountofprojectcostsfinancedandreasonablefinancing

charges.Moreover,becauseescalatorsinTPOagreementscanadverselyaffectout-year

financialreturnsforthepropertyowners,werecommendthatcostescalatorsbe

prohibitedundertheprogram.

§ TPOFinancialProjections–ThevalueofaTPOtransactionisdeterminedonthebasisof

theprojectedcashflowtothepropertyowner.However,therelianceoncashflow

projectionscanincreasetherisktopropertyowners,sincethethirdpartysolarowners

makingthecashflowprojectionmaybemotivatedtopresentmoreoptimisticfinancial

forecaststhanactuallysupportedtogainbusinessbyoverstatingsavingsestimates.This

canoccurinanumberofways:

i. Notprojectingallorthecostsrequiredbytheagreementorincludingordisclosing

thecostsofrateescalatorsovertheagreementperiod.

46

ii. NotproperlycorrelatingsolarproductionwithTOUratestructures.

iii. Notfullyaccountingforutilitydemandcharges,utilityfeesortariffsratechanges.

iv. Includingsavingsfromenergyefficiencyinfinancialforecasts.

Affordablehousingownersservinglow-incomehouseholdsundergovernmentimposed

rentrestrictionsarebothattractedbyrobustprojectionsoffuturesavingsandillequipped

tocovergapsiffinancialprojectionsarenotachieved.Forthesereasons,westrongly

recommendrequiringrobustinformationdisclosuresregardingprojectionsaboutfinancial

benefitsandcoststoprotectthisvulnerablemarketsegment.

§ TPOProductionGuarantees–AB693requiresthatqualifyingsolarenergysystemsowned

bythird-partyownersbesubjecttocontractualrestrictionstoensurethatnoadditional

costsforthesystembepassedontolow-incometenantsandthatthird-partyownersof

solarenergysystemsprovideongoingoperationsandmaintenanceofthesystem,monitor

energyproduction,andtakeappropriateactiontoensurethatthekWhproductionlevels

projectedforthesystemareachievedthroughouttheperiodofthethird-party

agreement.57

Thereareanumberofpracticesthathavebeenusedbyenergyservicecontracting

companies(ESCO)andsolarPVcompaniestoguaranteeperformanceincludingproviding

specificannualguaranteesofkWhproductionsothatpropertyownersarecompensated

fortheamountofunderproduction,orenergyperformanceinsurance,inwhichan

insurancecompanyguaranteesperformancelevels.TheProgramAdministratorshould

consultwiththesolarindustryandotherenergyprofessionstodeterminethebestoptions

forensuringthatsolarenergysystemsincentivizedbypaymentsfromtheSolarRoofs

ProgramprovidetheproductionlevelsoutcomesrepresentedbytheTPO.


47

VIII. IncentiveStructure58

TheincentivestructuremandatedbyAB693isfundamentallydifferentfromthe

traditionalapproachesutilizedfortheMASHandSASHprogramswhereprogramfundingand

capacitytargetsstronglyinfluencedtheunderlyingincentivestructure.59Specifically,AB693

statesthatindevelopinganincentivestructureforMultifamilySolarRoofsprogram:

“Thecommissionshallensurethatincentivelevelsforphotovoltaicinstallations

receivingincentivesthroughtheprogramarealignedwiththeinstallationcostsforsolar

energysystemsinaffordablehousingmarketsandtakeaccountoffederalinvestment

taxcreditsandcontributionsfromothersourcestotheextentfeasible.”60

Thiscost-basedapproachisnecessarytoensurethattheprogramhasthecapabilitytoaddress

financialbarrierssothat“solarenergysystems[are]moreaccessibletolow-incomeand

disadvantagedcommunities,”61andthatlow-incomerentersareprovided“adirecteconomic

benefitfromthequalifyingsolarenergysystem.”62

MWGoalShouldNotAffectIncentiveLevel

AB693’sgoalto“installqualifyingsolarenergysystemsthathaveageneratingcapacity

equivalenttoatleast300megawatts”63isreachableundertheproposedprogramdesignbut

mustbetemperedbythepracticalconsiderationsregardinghowthegoalwassetandhowthe

programisfunded.The300MWgoalsetbyAB693assumedfullprogrammaticfundingof$100

millionannuallyforaperiodof10years.However,theleveloffundingfortheMultifamilySolar

RoofsprogramiscontingentonthelevelofrevenuesreceivedfromtheCapandTradeauctions

ofGHGallowancesallocatedtoelectricalcorporationspursuanttosubdivision(b)ofSection

95890ofTitle17oftheCaliforniaCodeofRegulations.Becauseofthegeneraluncertainty

aboutactualprogramfundingovertheperiodcoveredbytheprogram,theMultifamilySolar

RoofsProgramshouldnotadoptaMWcapacitygoaloraninterimMWcapacitygoalthatmight

58Questions7,15,16and23oftheALJ’sJuly8,2016Rulingarecoveredinthissection.

59D.15-01-027,January9,2015


61AB693.Section1(e).


63AB693.Section1(f).

48

adverselyaffectincentivelevelsnecessarytoinstallsolarenergysystemstoreachlow-income

rentersatqualifiedmultifamilyproperties.

DesignofIncentiveStructuretoMeetAB693Objectives

TomeettheobjectivesofAB693andaddressthefinancialbarriersassociationwith

solarPVinstallationsservinglow-incomerentalunits,werecommendthattheincentive

structureincorporatethefollowingprinciples:

§ SolarCostIndexing–Indexsolarcostsformultifamilysolarenergysystemsandreduce

systemcostsbytheannualpercentreductioninsolarinstallationcostsor7%peryear

overtheprogramperiodpursuanttoSB1,64whicheverisless.

§ TieredIncentiveStructure–Providedifferentincentivelevelsforcommonareasand

tenantunitsandadjustincentivelevelstoreflecteconomiesofscale.65

§ SystemOwnership–Promoteincentiveoptionsthatenablepropertyownershipofthe

solarenergysystems.

§ TenantSystems:Coverupto100%ofthecostsforportionsofthesystemproviding

generationandeconomicbenefitstotenantsadjustedforothersourcesfundingthe

solarenergysystems.

§ CommonAreaSystems:Coverupto70%ofthecostsofcommonareainstallations

adjustedforothersourcesfundingthesolarenergysystems.

§ ContributingSources–Providedifferentincentivelevelsthatreflectcontributionsfrom

theFederalITC,LIHTCprogram,andothersourcesoffsettingthecostsofsolarenergy

systems.Toreflecttransactioncostsanduncertaintyintaxcreditcalculationshouldbe

cappedat$0.80/percredit.

§ PropertyContributions–Requireaminimumpropertycontributionthatislimitedto

80%oftheestimatedenergysavingsfromcommonareainstallations.Contributioncan

besatisfiedonthebasisofpaymentsmadetowardtowardsO&Mcostsandrent

paymentsunderTPOagreements.

§ Pre-PaidAgreements–ForsolarenergyprojectsfinancedbyTPOstructures,require

pre-paidagreementsif90%ormoretheindexedsolarcostsofthesolarenergysystem

arecoveredfromincentives,taxcreditsandothertaxbenefits.

64PublicUtilitiesCode,SEC.5.Section387.5(b).

65TheeconomiesofscalecostadjustmentsshowninTable8bemodifiedconsistentwiththegeneral

findingsintheLBNLTrackingtheSunVIIIreport.

49

§ StorageDevices–Incentivestructureforenergysolarsystemsshouldbeconsistentwith

incentiveprovidedundertheSGIPandcappedbasedon75%ofthePVgenerationsand

othersystemdesignconsiderationsdiscussedinSectionXI.

AlignmentofIncentiveswithSolarCosts

Therequirementsthattheprogram’sincentivesbealignedwithcostsandtakeaccount

offederalinvestmenttaxcreditsandcontributionsfromothersourcesstronglysuggestthatthe

incentivestructurebebasedonindexesofsolarcostsandfundingsourcesavailabletosupport

solarinstallations.66

Thisrequiredalignmentofincentivestosolarcostsandotherfundingsourcesisa

significantchangeandenhancementtowhatoccurredundertheMASHprogram.TheMASH

programevaluationreportedthat:

DespitedeclininginstalledsystemcosttrendsintheU.S.PVmarket,MASHsystem

installationcostsdidnotdecreaseovertime.Forcomparison,SASHsysteminstalledcosts

decreasedeveryyearfrom2011–2013.67

Inthisregard,theLawrenceBerkeleyLaboratory’sstudy,TrackingtheSun,providesome

insightsonwhysolarcostsincertainresidentialmarketshavenotdeclinedatthesamerateas

othermarkets.Thereportfoundthat“stateswithhigherincentivesand/orhigherelectricity

ratesmayhavehigherinstalledpricesasaresultofvalue-basedpricing.”68,69Thispracticeis

veryprevalentinsolartransactionsfinancedthroughThirdPartyOwnership(TPO)structures,

suchasPowerPurchaseAgreements(PPA),inclusiveofthemajorityofsolarinstallationunder


67NavigantConsulting,CaliforniaSolarInitiative—BiennialEvaluationStudiesfortheSingle‐Family

AffordableSolarHomes(SASH)andMultifamilyAffordableSolarHousing(MASH)Low‐Income

ProgramsImpactandCost‐BenefitAnalysisProgramYears2011‒2013,December1,2015.California

PublicUtilitiesCommission.68GalenBarbose,SamanthaWeaver,NaïmDarghouth,TrackingtheSunVII:AnHistoricalSummaryof

theInstalledPriceofPhotovoltaicsintheUnitedStatesfrom1998to2013,LawrenceBerkeleyNational

Laboratory,September2014.http://eetd.lbl.gov/sites/all/files/tracking_the_sun_vii_report.pdf69Value-basedpricingreferstoapracticeusedbysolarcompaniestoprovidePVserviceagreements

basedonthevalueofthesolartothecustomer,ratherthanbasedontheactualcostsofthesolar

system(hardcosts,installationcosts,anddevelopmentfees).Thepresumptionbysolarcompanies

usingthispracticeisthatifthecashflowbenefitsarelargeenough,apropertywilllookpasttheactual

installationscostsandaddedprojectcostspaidovertheperiodoftheagreement.

50

theMASHprogram.Theabsenceofcostreductionsandcostcontrolsforthisprogramshould

raiseconcernsthatthefullbenefitsofthereductionsinsolarcostswerenotreceivedbythe

tenants,propertyowners,orratepayersandinsteadmayhavebeendirectedelsewhere.Given

theexperiencewiththeMASHprogram,safeguardsareneededtoensurethattheintended

beneficiariesoftheprogramandratepayersreceivethebenefitsthatwouldresultfromcost

reductions.

DevelopandUseaSolarPVCostIndex

TomeettherequirementinAB693thatincentivesbealignedwithsolarcosts,we

recommendthattheCommissionorProgramAdministratorfortheMultifamilySolarRoofs

ProgramdevelopaSolarCostIndex.Thesolarindexshouldbedevelopedinconsultationwith

LawrenceBerkeleyNationalLaboratory(LBNL)andtheNationalRenewableEnergyLaboratory

(NREL)toensurethatanobjectivecostbaselineissetfortheprogram.70

AsastartingpointforestimatingsolarcostsinCalifornia’sresidentialmarkets,arecent

reportpublishedbyNREL71providesausefulbenchmarkofinstalledpricesofU.S.solar

photovoltaic(PV)systemsbuiltinthefirstquarterof2015(Q12015).Thisreportisthefirstin

anintendedseriesofannualbenchmarkingreportscoveringresidentialandcommercialsolar

PVinstallations.Theanalysisusedabottom-upmethodologytocapturevariationsinsystem

costandpricedrivenbyanumberoffactors.Thisapproachenablesbenchmarkingofsystem

costsindependentfromprice,whichasNRELpointsout“iscriticalinunderstandingindustry

progressinreducingcostsovertime.”Thesegment-specificmodelsandinputsusedbyNRELto

benchmarkPVcostswerereviewedandvalidatedbyindustryandsubjectmatterexpertsvia

70LBNLhasconsiderableexpertiseonperformingsolarcostsanalysis.TheLBNLTrackingtheSun

reports,developedwiththeDepartmentofEnergy,isarecognizedreferenceofsolarcosttrendsfor

grid-connectedsolarphotovoltaicsystems.The2015reportincludesdatapointsfromover400,000

individualPVsystemsor81%ofallU.S.PVcapacityinstalledthrough2014.71DonaldChung,CarolynDavidson,RanFu,KristenArdani,andRobertMargolis,U.S.PhotovoltaicPrices

andCostBreakdowns:Q12015BenchmarksforResidential,Commercial,andUtility-ScaleSystems,

September2015.NationalRenewableEnergyLaboratory.TechnicalReportNRE/TP-6A20-64746.

GTMResearch,SEIAUSSolarMarketInsightReport.See:

http://www.greentechmedia.com/research/subscription/u.s.-solar-market-insight

51

interviewsaswellasreviewofdraftresults.Thefindingsoftheanalysisbenchmarked

residentialsolarPVcostsat$3.09/watt.Abreakdownofthesecostsinshownbelow.

NRELModeledResidentialRooftopPVSystemCost

Source:NRELSeptember2015

TheNRELreportalsoaccountedforregionalvariationsinsolarcostsforstatesincluding

Californiaandfurtheranalyzedtheeconomiesofscalegainedaspartofcommercial

installationsforPVsystemsof200kWormore,whichisatypicalsystemsizeunderthe

MultifamilyResidentialRoofsprogram.Aspectsofthisanalysisarehighlightedbelow.

$0.70 $0.70 $0.70

$0.29 $0.29 $0.29

$0.12 $0.12 $0.12

$0.20 $0.20 $0.20

$0.20 $0.20 $0.20

$0.08 $0.08 $0.08

$0.33 $0.33 $0.33

$0.11 $0.11 $0.11

$0.31 $0.42 $0.36

$0.27

$0.38 $0.32

$0.38

$0.38 $0.38

$2.99

$3.21 $3.09

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

Installer Integrator Weighted average

Sy

ste

m P

rice

(2

01

5$

/Wd

c)

Profit

Overhead

Customer acquisition

Permitting fee and labor

Installation labor

Sales tax on equipment

Supply chain cost

BOS materials

Racking

Inverter

Module

52

RegionalVariablesinResidentialPVSystemCost


RegionalVariablesinCommercialPVSystemCost


Recognizingthatsolarinstallationsconstituteahybridofthecostdriversforresidentialand

commercialinstallation,wecompletedareviewofNREL’sreportfindingsandLBNL’sTracking

theSunreportstodevelopanestimateofsolarcostsformultifamilyrentalproperties.Basedon

thisanalysisweproposeusingabenchmarkedPVsystemscostsof$3.20/wattforthepurposes

$1.52 $1.52 $1.52 $1.52 $1.52 $1.52

$0.08 $0.10 $0.09 $0.05 $0.08 $0.05

$0.33 $0.37 $0.26 $0.37 $0.39 $0.40

$0.11 $0.11 $0.11

$0.11 $0.11 $0.11

$0.36 $0.37 $0.35

$0.38 $0.43 $0.43

$0.32 $0.34

$0.31 $0.35

$0.39 $0.39

$0.38 $0.39

$0.37 $0.38

$0.39 $0.38

$3.09 $3.19

$3.00 $3.16

$3.30 $3.28

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

U.S. Average CA AZ NY MA HI

Sy

ste

m P

rice

(2

01

5$

/Wd

c)

Profit

Overhead

Customer

Acquisition

Permitting Fee

and Labor

Installation

Labor

Sales Tax on

Equipment

Hardware

Figure 14. Regional variations in commercial-scale PV system price

$2.15 $2.14 $2.25 $2.26

$2.01 $2.09

$-

$0.50

$1.00

$1.50

$2.00

$2.50

U.S. Avg. CA MA NJ AZ NY

Co

st p

er

Wa

tt

Development Costs

Contingency

Sales Tax

EPC Overhead & Profit

Permitting and Interconnection

Engineering Design

Equipment Rental and Freight

Installation Labor

BOS

Racking Materials

Inverter

PV module

53

ofmodelingincentivelevelsinthisproposal.Findingsfromthisanalysisaresummarizedinthe

tableatAppendixD.

FundingSourceIndex

Inadditiontoaligningincentivelevelswithsolarcosts,AB693alsorequiresthat:

TheCommissionshallensurethatincentivelevelsforphotovoltaicinstallationsreceiving

incentivesthroughtheprogram…accountoffederalinvestmenttaxcreditsand

contributionsfromothersourcestotheextentfeasible.72

Inthisregard,theLowIncomeWeatherizationProgram(LIWP)LargeMultifamilyprogram73has

developedanincentivestructurethatattemptstoaccountforcontributionsfromfederalITCs

andtheLIHTCprogram.ThissolarincentivestructureforthisprogramisshownintheinTables

7and8maybeausefulmodeltoemulateintheMultifamilySolarRoofProgram.Theincentive

structureshownbelowassumeda$3.50/wattcostforinstalledPVinstallations.

Table7–LIWPLargeMultifamily

AffordableMultifamilyHousingSolarIncentives(SystemsLessThan100kW)

FundingSourcesforPV LIWPIncentives($/watt)

FederalITC LIHTC MASH

Property

Metered

Systems

Tenant

Metered

Systems

Yes Yes No $0.50 $1.50

Yes No No $1.00 $2.40

Yes No Yes 0 $1.00

No No No $1.50 $3.50

No No Yes $0.80 $1.70


73ProgramGuidelinesfortheLargeMultifamilyLIWPprogramareavailableat:

http://www.csd.ca.gov/Portals/0/Documents/LIWP/LIWP%20LMF%20Final%20Program%20Guidelines%

20111015%20FINAL.pdfandathttp://aea.us.org/efficiency-programs/low-income-weatherization-

program-large-multi-family-ca.html.

54

Table8–LIWPLargeMultifamily

IncentivesAdjustmentsforPVSystems

(SystemsOver100kW)

kW--DCIncentiveAdjustment

Factor

≤100 100%

101--300 80%

301--500 60%

≥501 40%

ThisstructureaddressesAB693’srequirementthattheincentivestructurebealigned

withthecostsofsolarPVinstallationsonmultifamilypropertiesandtakeaccountofother

contributingresources,suchasFederalInvestmentTaxCredits,thatareavailabletoreduce

projectcosts.Accordingly,werecommendthatasimilarapproachbeusedtocreatethe

incentivestructurefortheMultifamilySolarRoofsProgram,inclusiveofmodificationsto

addressAB693’sprogramobjectives.

ProposedIncentiveStructureforAB693

TheNon-ProfitSolarCoalitionrecommendsthattheCommissionadopttheincentive

structureproposedinthetablesbelow.Theproposalaccountsforassumptionsaboutproject

costandfundingresourcesthatmaybeavailabletoreduceincentiverequirements.Backup

analysisfortheproposedincentivelevelsisprovidedinAppendixE.

55

§ SolarPVIncentivesforExistingMultifamilyPropertiesWithoutLIHTCFinancingforSolar

Installation

Table9–AB693PROPOSEDINCENITVES

ExistingMultifamilyPropertiesWithoutLIHTCFinancing

Incentivesfor

PVInstalledfor

TenantUnits

($/DCWatt)

Incentivesfor

PVInstalledfor

CommonArea

($/DCWatt)

Notes

PropertyOwned

(Purchasedor

Financed)Systems

$3.20 $2.20

Propertyownedsystemsreflect

propertyfinancialcontributionfor

commonareainstallations,

financingcosts,andsystemO&M

costs,whichisover25%ofoverall

costs.

ThirdPartyOwned

System$2.24 $1.60

TPOsystemcostscoveredby

propertyownerforeither

commonareaandtenantunits.

Propertyownerpayaddedcosts

underPPAcommensuratewith

lowerincentives.

EnergyStorage Devices>10kW:$0.50/watthour

Devices<10kW:$0.60/watthour

EnergyStoragecapacitycappedat

75%ofPVgeneration.

Requirements § PVsystembenefitstenants.

§ PVsystemdesignincludesenergyefficiencyreductionestimates.

§ AllsystemsinstallationsincludeO&Mserviceprovidedbythe

propertyownerorthird-partyownerofsolarsystem.

§ Solarcontractorsinstallingsolarsystemsmustincludeorother

warranteeofsystemproductionfor10-yearsperformance

guaranteeorotherrequirements.

§ PerkWhchargesunderPPAagreementshouldnotexceedthe

estimatedenergycostsavingsfromPVsystemsservingcommon

areas.

§ Contractorlocalhiringandpropertyenergyefficiency

requirementsaddressseparatelyinproposal.

§ Affidavitbypropertyownerattestingthatpropertywillby

subjecttoaffordabilityforatleast10yearsandthattenant

benefitswillnotberecapturedbyincreasesinrentpayments.

56

§ SolarPVIncentivesforMultifamilyPropertiesWith4%LIHTCFundingforSolar

Installations


ExistingMultifamilyPropertiesWith4%LIHTCFinancing

Incentivesfor

PVInstalledfor

TenantUnits

($/DCWatt)

Incentivesfor

PVInstalledfor

CommonArea

($/DCWatt)

Notes

PropertyOwned

(Purchasedor

Financed)Systems

$1.92 $1.28

Propertyownedsystemsreflect

propertyfinancialcontributionfor

commonareainstallations,

financingcosts,andsystemO&M

costs,whichisapproximately30%

ofoverallcosts.

ThirdPartyOwned

Systems$0 $0 Notcosteffective.




75%ofPVgeneration.




propertyownerorTPOofthePVsystem.

§ Solarcontractorsinstallingsolarsystemsmustwarrantyor

guaranteePVproductionforatleast10-years.



§ LIHTCTaxCreditcontributionsforsolarprojectcappedat

$0.80/pertaxcredittoallowfortransactioncostsand

fluctuationsinpricingovertime.




57

§ SolarPVIncentivesforMultifamilyPropertiesWith9%LIHTCFundingforSolar

Installations


ExistingMultifamilyPropertiesWith9%LIHTCFinancing

Incentivesfor

PVInstalledfor

TenantUnits

($/DCWatt)

Incentivesfor

PVInstalledfor

CommonArea

($/DCWatt)

Notes

PropertyOwned

(Purchasedor

Financed)Systems

$0.25 $0.25Over90%ofsystemscostspaid

forbytheproperty.

ThirdPartyOwned

System

Installations

$0 $0 Notcosteffective




75%ofPVgeneration




propertyownerorTPOofthePVsystem.

§ Solarcontractorsinstallingsolarsystemsmustwarrantyor

guaranteePVproductionforatleast10-years.



§ LIHTCTaxCreditcontributionsforsolarprojectcappedat

$0.80/pertaxcredittoallowfortransactioncostsand

fluctuationsinpricingovertime.




58

§ SolarAdjustmentFactors

Wefurtherproposethattheincentivelevelsproposedinthetablesabovebeadjusted

basedthefollowingfactorslistedbelow.


SolarIncentiveLevelAdjustmentFactors

AnnualSolarCostAdjustment

Recommendation AdjustmentIncentiveAmount

§ Makeincrementaladjustmentto

incentivelevelstoreflectproject

economiesofscale

Incrementalreductionstoproposed

solarPVincentivelevelsreflectlabor

andothercostreductionsdueto

economiesofscalesavings

documentedinNRELreport.

-Systemslesthan200kW Nochangesinincentivelevel.

-SystemsOver200kWbutlessthan300kW 85%ofrecommendedincentive

-Systemsover300kWbutlessthan400kW 75%ofrecommendedincentivelevel.

-Systemsover400kW 70%ofrecommendedincentivelevel.

Recommendation AdjustmentIncentiveAmount

§ Makeannualadjustmenttoincentive

levelstoreflectsolarcostreductions

PursuanttoSection387.5ofthe

PublicUtilitiesCode,solarincentive

amountshoulddecreasebythe

percentdeclineinresidentialsolar

costsasreportedbyLBNL,orby7%

asrequiredinSB1.74

74PublicUtilitiesCode,SEC.5.Section387.5(b).

59

IncludingEnergyEfficiencyandStorageDevicesUnderAB693WillHelpMeetorExceedthe300

MegawattSolarGoal

Todeterminewhethertheproposedincentivelevelsforsolarenergysystemsisaligned

withthegoalofinstalling“solarenergysystemsthathaveageneratingcapacityequivalenttoat

least300megawatts,”75weundertookananalysisoftheproposedincentivestructure.Inthis

analysisweconsideredwhetherpotentialinvestmentsinenergystorageandenergyefficiency

couldalsobemadealongwiththeinvestmentsinsolarPVandstillmeetthe300MWtargetfor

theprogram.76

Theanalysisshowsthatthe300MWgoalcanbereached,orbesurpassed,underthe

proposedincentivestructureandthatinvestmentsinbothenergyefficiencyandstorageto

solarPVcouldbeincludedwiththeinstallationofsolarPVaspartoftheintegratedenergy

strategydescribedinthisproposal,andreachthe300megawatttarget.

§ Assumptions:Intheanalysisweassumedthat10%offundingallocatedfortheMultifamily

SolarRoofsProgramisprovidedforprogramadministrationcosts.Wealsomadethe

assumptionthatanadditional10%ofthefundingallocationcouldbeusedtosupport

energyefficiencymeasuresasaresultoffundingshortfallsinotherenergyefficiency

programs.77Fromthisbaseline,$80millionannuallywouldbeavailableforinvestmentsin

solarenergysystems(SolarPV+EnergyStorage).

Undertheinvestmentstructure,thehighestlevelofsolarPVincentivesproposedisfor

propertyownedsolarenergysystemsatexistingmultifamilyproperties.Thisincentivetier

proposes$3.20/wattforPVservingresidentialunitsand$2.20/wattforPVserving

commonareas.Forthiscategoryofinstallationstherearenootherleveragedfunding

sourcestooffsetcosts,andnouseofTPOfinancingstructures.Toassesssensitivities

regardingprogramfinancingweassumedthat100%ofthesolarPVinstallationsareatthis

levelsincethiscategoryoffundingwouldplacethehighestdemandonincentives.For

energystorage,weassumedanincentivelevelof$0.50/WattHour,whichisconsistent

withlevelsintheSGIPprogram.

75AB693.Section1(f).

76Thetargetofinstallingatleast300MWofnewsolarcapacityisbasedonafundingscenarioinwhich

theprogramisallocatedthefullleveloffundingauthorizedunderSection2870(c)overthe10-year

period.77AsnotedinSectionX,theuseofAB693fundingallocationsforenergyefficiencywouldonlybe

consideredasalastresortiffundingfromotherenergyefficiencyprogramsoraccountsisnotavailable.

60

ForPVinstallationcosts,weassumedanaveragecostof$3.20/watt,whichisdescribedin

theproposal.Fora270kWsystemdesignedtooffset70%ofresidentialelectricityuseand

100%ofcommonareauseinamultifamilyproperty,theestimatedcostwouldbe

$764,000.

Theenergystoragesystem’scapacityandcostsisbasedonananalysisperformedby

Geli,78,79whichisdescribedindetailinSectionXI.Thedesignofthissystemisintegrated

withthesolarPVinstallationtooptimizepeakreductionsforbothresidentsandcommon

areas.Forastoragesystemdesignedtooptimizeelectricbillreductionforbothresidents

andcommonareas,thiswouldaddanadditional$180,000incostfora360kilowatt-hour

storagedeviceatanincentiveof$0.50/watt-hour.Theanalysisdoneassumesthat100%

ofthepropertiesinstallingPVwouldalsoincorporatestoragedevices.Energystorage

wouldbeoptionsundertheprogramandthisassumptionisfarinexcessofwhatis

expectedundertheprogram.Itisusedheretomodelaworstcasescenario.

Thecapacityandcostsforthesolarenergysystem(SolarPV+EnergyStorage)isshownin

Table12.Tomodelout-yearcosts,weassumeda7%reductioninsolarPVcostsanda5%

reductioninstoragecostseachyear.

Table12–AB693BudgetAnalysis

PVCapacityandCostEstimates

Residential

units Commonarea

Entire

Property

PVcapacity(kW) 17080 100 270

PVincentive($/W) $3.20 $2.20 $2.83

TotalPVincentive $544,000 $220,000 $764,000

Storagesize(kWh) 270 90 360

Storageincentive($/Wh) $0.50 $0.50 $0.50

TotalStorageincentive $135,000 $45,000 $180,000

Totalincentive $679,000 $265,000 $944,000

78BasedonGelianalysisoftenantbillsavingsundertime-of-useratesfor75unitaffordablehousing

property.79Basedonlargestsystemsizefoundtobeeconomicforaffordablehousingpropertiesanalyzedin

ClosingtheCaliforniaCleanEnergyDivide,availableathttp://www.cleanegroup.org/ceg-

resources/resource/closing-the-california-clean-energy-divide/80SolarPVassumptionsbasedonanalysispresentedinAppendixE:IncentiveStructureforPV

Installation.

61

Findings:TheresultsoftheanalysisareshowninTable13overtheten-yearlifeofthe

program.Keyfindingsinclude:

i. Firstyeargeneratingcapacityisestimatedof22.9MW.Thisestimateisaworst-

casescenariosinceitassumesthat100%oftheinstallationsarefundedatthe

highestincentivelevelproposedfortheprogramandthat100%ofthe

installationsincludeenergystoragesystems.

ii. CumulativedeploymentofsolarPV–includingefficiencyandstorage–overan

anticipatedten-yearlifetimeoftheincentiveprogramwouldbe317MW.Ifthe

inclusionofenergystoragedevicesisadjustedto50%oftheproperties,whichis

amorerealisticexpectation,theestimatedaddedgeneratedcapacitywouldbe

354MW.Ifmoreblendedfundingscenariosareusedtoreflectthedifferent

incentivestructuresproposed,thecase,theestimatecouldexceed400MW.

iii. Inclusionofstoragedevicescouldincreaseannualaffordablehousingelectricbill

savingsbyanadditional$21millionperyearoverthelifetimeoftheprogram,

amountingto$317millioninstorage-enabledsavingovertheanticipatedlifeof

thesystems.

Table13–AB693CapacityGenerationAnalysis

EstimatedOutcomesofIntegratedSolarEnergySystems

Year

PV

incentive

($)

Storage

incentive

($)

PVcapacity

(MW)

Cumulative

PVcapacity

(MW)

Annual

storage

savings

(million$)

Cumulative

storage

savings

(million$)

1 764,000 180,000 22.9 22.9 1.5 1.5

2 710,520 171,000 24.5 47.4 1.6 3.1

3 660,784 162,450 26.2 73.6 1.7 4.8

4 614,529 154,328 28.1 101.7 1.9 6.7

5 571,512 146,611 30.1 131.8 2.0 8.7

6 531,506 139,281 32.2 164.0 2.1 10.8

7 494,301 132,317 34.5 198.5 2.3 13.1

8 459,699 125,701 36.9 235.4 2.5 15.6

9 427,521 119,416 39.5 274.9 2.6 18.2

10 397,594 113,445 42.3 317.1 2.8 21.0

Ofcourse,iffundinglevelsarelessthananticipated,thesenumberswouldchange,butthenso

presumablywouldthetarget.Theanalysisestablishesthatthereisnofactualbasisforarguing

againsttheinclusionofenergyefficiencyandenergystoragebasedonprogram’sabilityto

reachAB693’sMWgoalatfullfundinglevels.

62

IX. LocalHiringRequirements81

AB693requiresthattheCommission“establishlocalhiringrequirementsforthe

programtoprovideeconomicdevelopmentbenefitstodisadvantagedcommunities.”82

Particularlyoverthelastfiveyears,localhiringhasbeenacceptedasakeyanti-povertytool

acrossthestate.Consequently,therearenowawiderangeoflocalhiringpolicies:“goodfaith”

FirstSourcelocalhiringpolicies,SanFrancisco’smandatoryLocalHiringPolicyforConstruction,

U.S.DepartmentofTransportation’slocalhiringpilots,amongmanyothers.AB693hasalso

soughttosimilarlyguaranteegood-payingjobsforresidentsofdisadvantagedcommunities

withinthesolarindustry.TheJointPartiesfeelstronglythatthemosteffectivewaytoensure

thatrooftopsolarinstallationsprovideeconomicdevelopmentbenefitstodisadvantaged

communitiesistoensurethatthoseinstallationstranslateintogoodpaying,long-lastingjobs

forlocaldisadvantagedresidents.

TheProgram’slocalhiringpolicyshouldincludearobustdatacollectionrequirement.

Thelocalhiringpolicydesignshouldincludereliableandgranularworkforcedata

collection.ThecollecteddatawillbecriticaltonotonlydeterminingthesuccessofAB693’s

localhiringrequirements,butalsoprovidinginsightsastohowtoimprovelocalhiringpolicies

infutureiterationsoftheprogram.TheCommissionshouldrequirecontractorstoprovidedata

totheProgramAdministratoron:

• Thenumberofwork-hoursperformedbylocalresidents,disadvantagedresidents,

minorityworkers,andwomenworkersaswellasthetotalnumberofworker-hours

performedforeachproject

• Jobretention,namelythelengthoftimethecontractorkeepslocalresidentsemployed

• Employeeaccessindustry-recognizedcertifications

• Wagesandbenefitsofalltemporary,part-timeandfull-timeemployees

• Employeetraveldistanceand/ortraveltimetotheworksite

Collectingthisdatawillrequireaunifiedworkforcereportingsystemthatcollects

certifiedpayrollreporting.Reflectingthediversityofthestate,thisreportingsystemshould

havemodulescapableoftrackingdifferentlocalhiringpolicies,rangingfrom“goodfaith”to

81Question12,oftheALJ’sJuly8,2016Rulingarecoveredinthissection.

82§2870(f)(6).

63

mandatorylocalhiringpolicies.Thesystemshouldalsobedynamicaswellbytrackingdatain

realtimeandallowingtheawardingbodytoforecasthowmuchworkforceisneeded.The

system’sgranularmeasurementofprojectwork-hourswillmeasurethesuccessofjobtraining

serviceproviders,helptofocustrainingdollars,andadjustlocalhiringpoliciesforunderutilized

andoverutilizedtrades.

TheCommissionshouldalsorequirecompatibilitywithothermajorworkforcedata

collectionsystems,particularlyinhousingandenergyefficiency.Forinstance,Section3ofthe

HUDActof1968isthelegalbasisforprovidingjobsforresidentsandawardingcontractsto

businessesinareasreceivingcertaintypesofHUDfinancialassistance.Giventhesheervolume

ofHUDwork,83Section3datacollectionandreportinghasbecomestandardizedamongthe

manydevelopers,contractors,andsubcontractorsonHUD-financedprojects.Theworkforce

datacollectionsystemalsoprovideskeypolicyguidanceforhousingauthorities,

redevelopmentagencies,andfederalDepartmentofHousingandUrbanDevelopment(HUD).

Similarly,theCommissionshouldseektocompatibilitywiththispre-existingsystem.

ForthisProgram,workforcedatacollectionshouldbeimplementedwithlittletono

additionaladministrativeburdenoncontractors.Theprocessandreportingmechanismshould

leverageexistingcontractors’internalreportingcapabilitiesandaccommodateanytemplatefor

certifiedpayrollreportingsystemusedinthestate.Utilizingaworkforcereportingsystemthat

hasbeenadoptedmostmajorcountiesinCaliforniawouldalsoavoidadditionalburdensor

coststocontractorsalreadyfamiliarwiththebasicsofcertifiedpayrollreporting.Bytaking

advantageofexistingworkforcedevelopmentframeworksandpractices,theCommissioncan

thusbesensitivetotheneedsofcontractorsbyadoptingoneunified,structurallymanageable

andscalableworkforcereportingsystem.

83From2012to2015,HUDfundinggenerated110,500jobsfornewSection3employeesandtraineesas

wellas$4.8billionawardedtoSection3businesses.U.S.DepartmentofHousingandUrban

Development,“Section3:ConnectingLow-IncomeResidentswithOpportunity”,June23,2016,available

at:http://portal.hud.gov/hudportal/documents/huddoc?id=section3_brochure_final.pdf

64

TheCommissionshouldinitiallyestablishbasefloorrequirementsforlocalhiringthatwill

evolveintostrongerpolicies.

Reflectingthediversityofthestate,localhiringrequirementsforAB693shouldbeboth

flexibleandstrongenoughtoshiftthemarketfocustoprioritizingjobopportunitiesforlocal,

low-incomeanddisadvantagedcommunities.SolarinstallersreceivingProgramincentives

shouldproactivelyworkwithlocalWorkforceInvestmentBoards(WIBs)andlocaljobtraining

organizationstorecruitnewhiresfromlocaldisadvantagedcommunities.Toensurethequality

ofjobsthatgotolocaldisadvantagedresidents,solarinstallersshouldadheretoprevailing

wagerequirementswhensuchrequirementsaretriggeredbyleveragedfinancingsourceson

Programprojects,asSanFrancisco’ssuccessfulmandatorylocalhiringlawdoes.Finally,solar

installersreceivingProgramincentivesshouldcollectandmakepubliclyavailablesufficiently

detaileddatatoinformfuturelocalhirepolicies.

TheProgram’slocalhiringpolicyshouldprimarilyfocusonjobplacementratherthanjob

training.

WhileJointPartiesrecognizethatjobtrainingisanimportantelementofaproviding

economicdevelopmentbenefitstodisadvantagedcommunities,webelievethattheProgram

shouldfocusprimarilyonjobplacement.First,thetextofAB693explicitlycallsforthe

Commissiontoestablish“localhiringrequirements.”ItdoesnotasktheCommissionto

establishajobtrainingrequirement.Second,JointPartiesbelievethatthestate’ssolar

workforcedevelopmentgoalswouldbebestservedbyhavingtheProgramtranslatethe

successofpreviousjobtrainingrequirementsintoactualjobplacement.

Jobtrainingrequirementsinpreviousstate-widesolarincentiveprograms,suchasthe

SingleFamilyAffordableSolarHomes(SASH)andtheMultifamilyAffordableSolarHousing

(MASH)programs,havebeensuccessfulinincreasingthepoolofdisadvantagedresidentswho

arequalifiedtoperformresidentialsolarinstallations.Butjobtrainingisnotsufficienttofully

realizethepotentialcommunityeconomicdevelopmentbenefitsofaffordablehousingsolar

65

incentivesandismeaninglessifitisnotfollowedbyjobplacement.Thus,whileAB693should

includeajobtrainingcomponent,effortsrelatedtojobtrainingshouldbeamuchsmallerpart

oftheprogramcomparedtojobplacement.Requiringactualjobplacementfordisadvantaged

residentsisessentialtocreatinglong-lastingeconomicbenefitsfordisadvantagedresidentsand

theircommunities.

Anumberofjobtrainingserviceprovidersandcommunity-basedorganizationshave

demonstratedstrongcommitmenttobothjobtrainingandplacementinthesolarindustry,

includingorganizationssuchasGridAlternatives,RisingSunEnergyCenter,SanFrancisco

ConservationCorps,AsianNeighborhoodDesign,amongmanyothers.Totakeadvantageof

theseexistingjobtrainingprograms,theCommissionshouldestablishanelectronicdatasource

tolistallavailableworkforcefromlocal,low-incomeanddisadvantagedcommunities,thus

enablingcollaborationbetweenlocaljobtrainingorganizationsandcontractorsandensuringan

effectivebalancebetweenworkforcedemandandsupply.

Itisalsoimportanttoemphasizethatlow-incomeanddisadvantagedworkersmayhave

barrierstoaccessingtrainingprogramsduetolackofcompensationduringtrainingprograms.

Inaddition,theseworkersfaceotherbarrierssuchasadequatetransportation,childcare

obligations,andotherbarriers.WethereforerecommendthattheCommissiontargettraining

programsthathavebeenabletoaddressoneormoreofthesebarrierstotraining.

ForthefirstthreeyearsofsolarprojectsfundedbyAB693,theCommissionshouldadopta

broadlocalhirebaserequirementcoupledwitharequirementtocomplywithprevailingwage

requirementsonProgramprojectswhensuchrequirementsaretriggeredbyleveraged

financingsources

Forthefirstthreeyearsofimplementation,theCommissionshouldrequirecontractors

receivingProgramincentivestomakeagoodfaithefforttohirelocalresidentsforits

installations.TheCommissionshouldalsorequirecontractorstocomplywithstateprevailing

wagerequirementsonsolarenergysystemsinstalledthroughtheMultifamilySolarRoofs

Programwhensuchrequirementsaretriggeredbyleveragedfinancingsources.A“goodfaith

66

effort”tohirelocalresidentsmeansthatcontractorsshouldproactivelyreachouttolocalWIBs

andjob-trainingorganizationstofindqualifiedlocalresidentstofillopenpositions.

AB693doesnotexplicitlydefine“localhire.”However,thisterm“primarilyrefersto

programsthatrequiredirecthiringofresidentsofspecificlocalareas.84Consideringthe

significantdemographicvariationthroughoutthestate,“localresident”shouldbebroadly

definedasanindividualresidinginthesamecountyastheprojectoranindividualhiredfroma

job-trainingorganizationlocatedinthesamecountyastheproject.ToensurethatAB693local

hiringrequirements“provideeconomicdevelopmentbenefitstodisadvantaged

communities,”85theCommissionshouldprioritizehiringfromCalEnviroScreen-designated

disadvantagedcommunitiesandlow-incomecommunitiesaswellasthehiringof

disadvantagedworkers.

TheplainlanguageofAB693supportsprioritizingworkersfromthesecommunities.

Section2870(f)(6),thelocalhireprovision,clearlyrequiresthat“localhiring”requirements

“provideeconomicdevelopmentbenefitstodisadvantagedcommunities.”86Inotherwords,

disadvantagedcommunitiesaretheprimaryintendedbeneficiariesofthelocalhiring

requirements.Thisprovisionissupportedbyoneofthebill’slegislativedeclarations,which

proclaims:“[i]nstallingqualifiedsolarenergysystemsindisadvantagedcommunitiescan

providelocaleconomicdevelopmentbenefits.”87Thisparagraphdemonstratesthatthe

Legislatureviewssolarinstallationsindisadvantagedcommunitiesasproviding“local”(i.e.,ina

disadvantagedcommunity)economicbenefits,suchasjobopportunities.

84UCLALaborCenter,ExploringLocalHire:AnAssessmentofBestPracticesintheConstructionIndustry,

p.13(March2014),availableathttp://www.labor.ucla.edu/publication/exploring-targeted-hire/.85Cal.Pub.Util.Code§2870(f)(6)(emphasisadded).

86Cal.Pub.Util.Code§2870(f)(6).

87AB693Section1(c)(emphasisadded).

67

ForprojectslocatedinCESDACs,contractorsshouldprioritizehiringresidentslocatedin

communitiesdesignatedasdisadvantagedbyCalEnviroScreen88inthecountywheretheproject

issited.IftherearenotenoughqualifiedworkersfromCESDACs,workersshouldthenbe

pulledfromlow-incomecommunitiesoutsideofCESDACsbutstillwithinthecountywherethe

projectissited.ForprojectslocatedoutsideofCESDACs,contractorsshouldprioritizehiring

residentsoflow-incomecommunitieswithinthecountywheretheprojectislocated.If,after

firstseekingworkersfromCESDACsandlow-incomecommunitiesthereremainsaninsufficient

numberofqualifiedworkers,otherworkersmaybeselectedfromacrossthecounty.Ifthe

contractorcannotfillanopenpositionwithaqualifiedlocalresident,itshouldsubmittothe

ProgramAdministratorawrittendescriptionofthestepsittooktofindaqualifiedlocal

resident,reasonsthatitdidnothirealocalresidentreferredtothembyalocaljob-training

organizationiftherewassuchareferral,andthecityandcountyofresidenceoftheworkerit

didhire.TheserecommendationsnotonlyalignwiththelanguageandintentofAB693,they

alsotargetcommunitiesthatmaybethemostinneedofeconomicopportunitiesandensure

thatcontractorshaveabroadpoolofworkerstochoosefromtoavoidprojectdelays.

Additionally,contractorsshouldmakeaparticularefforttohiredisadvantagedworkers.

Adisadvantagedworkerissomeonewhofacesorhasovercomeatleastoneofthefollowing

barrierstoemployment:beinghomeless;beingacustodialsingleparent;receivingpublic

assistance;lackingaGEDorhighschooldiploma;participatinginavocationalEnglishasa

secondlanguageprogram;orhavingacriminalrecordorotherinvolvementwiththecriminal

justicesystem.89Aswiththeprioritizationrecommendationabove,theprogramadministrator

wouldretaintheflexibilitytoseekotherqualifiedworkerswhendisadvantagedworkersare

unavailable.

88

The cut-off point for CalEnviroScreen-designated disadvantaged communities for the purposes of the

local hiring policy should coincide with the adopted cut-off point for the Program as a whole. That is, if

the Commission adopts Joint Parties’ proposal to define “disadvantaged communities” for the Program as

the top 25% of CES-designated disadvantaged communities either across the state or by IOU territory

(whichever captures a greater number of census tracts), the same measure should be used for the local

hiring policy.89

This definition borrows from San Francisco’s definition of “disadvantaged worker.” See San

Francisco Administrative Code § 6.22(G)(2)(g).

68

Finally,toensurethattheProgramprovidesmeaningfulandsubstantialeconomic

benefitstodisadvantagedcommunities,theCommissionshouldrequirecontractorstocomply

withprevailingwagestandardsforalloftheirworkonAB693projectswhensuchrequirements

aretriggeredbyleveragedfinancingsources.Prevailingwagestandardsareintendedtoensure

thatpublicmoniescreategoodpayingjobs.Similarly,theCommissionshouldensurethat

individualsworkingforcontractorsreceivingincentivesunderAB693makeasustainableliving

wage.

Attheendofthreeyears,theCommissionshouldalsorequireeachoftheProgram

Administratortoissueasummaryreportdetailingtheirlocalhiringresults.Asdescribedabove,

theseresultswouldreportoutthegranulardatacollectedwithineachIOUterritory.These

reportsshouldalsoincludebreakoutsoflocalhiringbycountyaswellasasurveyofthe

contractorsandotherworkforcedevelopmentsystemstakeholders.Assessingthreeyearsof

thisdataasafoundation,workforcestakeholdersandtheCommissionwillthenbeableto

furtherevolvelocalhiringpoliciesandtargetingofdisadvantagedcommunitiesacrossthestate

ofCalifornia.

69

X. EnergyEfficiencyRequirements90

TomeetthelegislativerequirementsofAB693,andtoensuresolarsystemsarecost-effectively

sizedforefficientbuildingloads,werecommendtheCPUCadopta15%energyefficiency

requirementforparticipatingbuildings,withassociatedsupportinservicesandfunding.

The15%energyefficiencyrequirementwouldinclude:

- Acomprehensiveauditandimplementationplan

- A3yearflexibilityprovisiontocompleteidentifiedimprovements

- Alternativecompliancemechanisms,e.g.proofofrecentretrofitormeetingaset

EnergyUsageIntensitybenchmark

- Fulltechnicalandprogrammaticsupportforowners

- Fundingsupportviaexistingprogramsandanadditionalfundthatleveragesoneor

moreofthefollowingfundingsources:

o UnspentAB693funding

o NewfundingunderPUCCodesection748.5

o EnergySavingsAssistanceProgramgeneralorunspentfunds

o EnergyEfficiencyportfolioprogramgeneralorunspentfunds

Theefficiencycomponentwouldalsocontributetowardsmeetingthestate’sefficiency

doublingrequirementunderSB350.

LegislativeRequirements

AB693requiresthat:

Thecommissionshallestablishenergyefficiencyrequirementsthatareequaltothe

energyefficiencyrequirementsestablishedfortheprogramdescribedinSection2852,

includingparticipationinafederal,state,orutility-fundedenergyefficiencyprogramor

documentationofarecentenergyefficiencyretrofit.91

TheapplicablelanguageunderPUCCodesection2852states:

(c)(3)Allmoneyssetasideforthepurposeoffundingtheinstallationofsolarenergy

systemsonlow-incomeresidentialhousingthatareunexpendedandunencumberedon

January1,2022,andallmoneysthereafterrepaidpursuanttoparagraph(2),exceptto

theextentthosemoneysareencumberedpursuanttothissection,shallbeutilizedto

augmentexistingcost-effectiveenergyefficiencymeasuresinlow-incomeresidential

housingthatbenefitratepayers.92


91AB693amendmentstoPublicUtilitiesCode,Section2870(f)(7).

92PUC,Section2852(d)(2),emphasisadded.

70

(d)InsupervisingaprogramimplementingtheCaliforniaSolarInitiativepursuanttothis

section,thecommissionshallensurethattheprogramdoesallofthefollowing:

(d)(2)RequiresparticipantswhoreceivemonetaryincentivestoenrollintheEnergy

SavingsAssistanceProgramestablishedpursuanttoSection382,ifeligible.93

AB693thusrequiresqualifiedmultifamilypropertiesreceivingassistanceundertheMultifamily

SolarRoofsprogramtoundertakeenergyefficiencyimprovementsasaconditionofreceiving

incentivesforthesolarenergysystem.Furthermore,PUCCodesection2852(c)(3)establishes

thatunencumberedfundscanbeusedtoaugmentcost-effectiveenergyefficiencymeasures.

Additionally,SB350,enactedduringthesamelegislativesessionasAB693,establishesa

requirement“todoubletheenergyefficiencysavingsinelectricityandnaturalgasfinalend

usesofretailcustomersthroughenergyefficiencyandconservation,”94andrequirestheCPUC

toestablishannualtargetsforstatewideenergyefficiencysavingsanddemandreductionthat

willachieveacumulativedoublingofstatewideenergyefficiencysavingsbyJanuary1,2030.95

UnderSB350,therequirementsestablishedtodoubleenergyefficiencymaybeachieved

throughenergyefficiencysavingsanddemandreductionresultingfromavarietyofprograms,

including“acomprehensiveprogramtoachievegreaterenergyefficiencysavingsinCalifornia’s

existingresidentialandnonresidentialbuildingstockpursuanttoSection25943.”96Under

Section25943ofthePublicResourceCode,acomprehensiveprogrammayinclude“abroad

rangeofenergyassessments,buildingbenchmarking,energyrating,cost-effectiveenergy

efficiencyimprovements,publicandprivatesectorenergyefficiencyfinancingoptions,public

outreachandeducationefforts,andgreenworkforcetraining.”97

Thus,thescopeandtherequirementsprescribedforonAB693pertainingtoenergy

efficiency,localhiring,outreachandeducation,aswellasthesolarinvestmentsandfinancing

options,provideacomprehensiveplatformtoadvancetheachievementofSB350mandatesin

theaffordablemultifamilyhousingmarket.

93PUC,Section2852(d)(3)

94SB350.Section2(a)(2).

95SB350.Section6(c)(1).

96SB350.Section6(d)(2).

97PublicResourceCode.Section25943(a)(2).

71

EnergyEfficiencyProgramDesign

WerecommendtheCommissionconsiderthefollowingfactorsindesigninganeffectiveenergy

efficiencycomponentfortheMultifamilySolarRoofsProgram:

§ EnergyEfficiencyGoals:TheenergyefficiencyelementoftheMultifamilySolarRoofs

programshouldrequireaminimumenergyimprovementgoal.Werecommendthatthegoal

bedesignedtoachieveaminimumreductioninnetenergyuse(beforesolar)ofatleast15%

perproperty,asleadingwhole-buildingprogramscurrentlyrequire.98Thedesignofthe

energyefficiencyportionofthisprogramshouldbebasedonthisrequirement.

§ IncorporationofEfficiencyinSolarSystemDesign:Linkingenergyefficiencywiththe

installationofsolarenergysystemscanhelpreducethecostoftheinstalledsystemby

reducingtheassociatedload.Startingwithenergyefficiencyalsoensurescompliancewith

thestate’sloadingorder.99Beforeinvestinginmoreexpensivesolaroptions,morecost

effectiveimprovementsthatreduce–notoffset–energyuseshouldbeincorporatedinto

theinvestmentstrategy.Ifitisnotpossibletomaketheinvestmentinenergyefficiency

beforethesolarinstallation,thenthesolarsystemsizeshouldbecappedtoaccommodatea

futureinvestmentbasedontheenergyefficiencyreductionsidentifiedbyanenergy

efficiencyaudit.

§ AffordableHousingMarketSpecificSolutions:TheBayAreaRegionalEnergyNetwork

(BayREN)andtheLargeMultifamilyLIWPprogramhavedesignedandimplemented

successfulenergyefficiencyprogramsthataremodelsfortheMultifamilySolarRoofs

Program.Theseprogramshavebeenabletoenrollandscaleenergyefficiency

improvementsinmultifamilymarketsdescribedbyIOUenergyefficiencyadministratorsas

“underserved”and“hardtoreach.”Coreelementsoftheseprogramsthatcontributeto

theirsuccessandacceptancebymultifamilypropertyownersinclude:providingnocost

front-endtechnicalsupport,“One-Stop”programofferingsfromdesigntofull

implementationofenergyimprovementplans,andpropertyownerselectionofinstallation

contractors.

98The15%energyperformancerequirementrecommendedforAB693isconsistentwiththeminimumenergy

reductionrequirementssetforthemultifamilyEnergyUpgradeCaliforniaprogramadministeredbyIOUSand

RegionalEnergyNetworks,andthestatewideLargeMultifamilyLowIncomeWeatherizationadministeredbythe

CaliforniaDepartmentofCommunityServicesDevelopment(CSD)andfundedfromCapandTradeallocations.

Specifically,bothBAYREN’swhole-buildingmultifamilyprogramandCSD’slargemultifamilyprogramnowrequire

a15%threshold.99“AsstatedinEnergyActionPlanIandreiteratedhere,costeffectiveenergyefficiencyistheresourceoffirst

choiceformeetingCalifornia'senergyneeds.Energyefficiencyistheleastcost,mostreliable,andmost

environmentally-sensitiveresource,andminimizesourcontributiontoclimatechange.”CPUC/CEC,EnergyAction

PlanII,ImplementationRoadmapforEnergyPolicies(October2005).Availableat:

http://docs.cpuc.ca.gov/published/REPORT/51604.htm;“Theelectricalcorporationshallfirstmeetitsunmet

resourceneedsthroughallavailableenergyefficiencyanddemandreductionresourcesthatarecosteffective,

reliable,andfeasible.”Cal.PublicUtil.Code§454.5(b)(9)(C).

72

§ FundingResources:Withinaffordablehousingmarkets,energyefficiencyimprovementsfor

bothresidentialunitsandcommonareasrequiressignificantupfrontfundingsupport.

Affordablemultifamilyhousingisdefinedbyrentaffordabilityandotherregulatory

restrictionsthatlimitpropertycashflowandowners’abilitiestoundertakewholebuilding

energyefficiencyretrofitsoutsideofprojectrefinancingcycles(whichoftenextendbeyond

twentyyears).Additionally,equipmentreplacementreservesarelimitedandgenerally

insufficienttocoverthecostsofmajorenergyimprovementsorwholebuildingenergy

efficiencyretrofits.Toaddresspropertyresourceconstraintsinimplementingenergy

efficiencyimprovements,werecommendthatutilitycustomerandGreenhouseGas

ReductionFundenergyefficiencyprograms,suchastheEnergyUpgradeCaliforniaandCSD’s

LIWPLargeMultifamilyprogram,beleveragedtoenablewholebuildingenergyinvestments

forthissector.Asdescribedbelow,wealsostronglyurgetheCommissiontomakeadditional

fundsavailabletosupplementlikelyremainingshortfalls.Suchanapproachisnecessaryto

mitigatefundingbarriersandtoaddresslow-incomeenergycostburdens.

§ PhasedImplementation:Energyimprovementsinmultifamilypropertiesareoftenplanned

aroundscheduledequipmentreplacements,vacancies,andrecapitalizationevents.

Flexibilityshouldbeprovidedwithregardstotheschedulingandphasingofenergy

improvementstomitigateschedulingconflictsornegativeimpactsonsolarenergysystem

installations.

§ OneStopImplementation:Tosuccessfullyimplementtheprogram,comprehensivetechnical

supportmustbeprovidedtothepropertyownertoassessenergyefficiencyopportunities

andtodevelopacorrespondingenergyefficiencystrategyandplanthatmeetstheneedsof

thepropertyownerandtenants.Thissupportmustinclude(1)anenergyauditthatprovides

adetailedanalysisofenergyusage,costs,andthebuildingsystemsandconditionsaffecting

energyconsumption,and(2)supportservicestocoordinateintegratedfundingofresident

unitsandcommonareaenergyefficiencyimprovements.TheBayRENMultifamilyEnergy

UpgradeprogramandtheLargeMultifamilyLIWPprogramhaveadoptedservicedelivery

planstointegratethesesupportservicesintotheirprogramdesigns.Werecommendthese

servicedeliveryplansbereplicatedbytheMultifamilySolarRoofsProgram.100

§ PresumptionofCompliance:QualifiedpropertiesparticipatingintheMultifamilySolarRoofs

Programshouldbepresumedtohavesatisfiedtheprogram’senergyefficiencyrequirements

ifthepropertyhasundergoneawhole-buildingenergyretrofitwithinthelastthreeyears

thatwassupportedthrougharecognizedenergyefficiencyprogram.101Werecommend

definingawhole-buildingretrofitasonethatcanreasonablybeexpectedtohaveachieved

100InformationintheservicedeliveryandplansadoptedbythemultifamilyBayRENandLargeMultifamilyLIWP

programsisavailableat:www.camultifamilyenergyefficiency.organd

www.bayareamultifamily.org.101TheseprogramsincludetheMultifamilyEnergyUpgradeCaliforniathatareadministeredbyIOUs,Regional

EnergyNetworks,orCCA,(IOU,REN,orCCAadministered),thelargeandsmallmultifamilyLowIncome

WeatherizationadministeredbytheCaliforniaDepartmentofCommunityResourcesDevelopment(CSD)LIWP,

andenergyefficiencyimprovementsfundedbytheCaliforniaTaxCreditAllocationCommittee(TCAC).

73

10-15percentsavings,orabuildingthatwasnewlyconstructedorsubstantiallyrehabilitated

withinthelastthreeyearsandmetorexceededTitle24energybuildingperformance

standards.Additionally,foraffordablehousingorganizationswithestablishedenergy

benchmarkingprograms,theProgramAdministratorcouldestablishapresumptionof

compliancethroughdemonstrationthattheaffordablehousingpropertymeetsprescriptive

EnergyUseIntensity(EUI)thresholdsorPortfolioManagerbenchmarkscoressetbythe

ProgramAdministrator.

ProposedEnergyEfficiencyProgramStructure,Requirements,andProcess

WerecommendthattheenergyefficiencyrequirementsfortheMultifamilySolarRoofs

Programbeimplementedthroughthefollowingsteps.

§ EnergyEfficiencyProgramTechnicalSupportAdministrator:TheProgramAdministrator

contractswithanEnergyEfficiencyProgramAdministratortofacilitatetheimplementation

ofresidentandcommonareaenergyefficiencyimprovementsatthemultifamilysite.The

EnergyEfficiencyProgramAdministratorprovidestechnicalassistanceinevaluatingsite

conditionsandopportunitiesforenergyefficiencyimprovementsandfacilitatesproperty

ownerandtenantaccesstoavailableenergyefficiencyresources;similartowhatoccurs

undertheBayRENandLIWPprograms.

§ EnergyAuditandWorkScopeDevelopment–Afterinitialprojectintake,theEnergy

EfficiencyProgramAdministratorprovidesorapprovesanASHRAELevel2orhigherenergy

audit,whichincludesabillinganalysisandcomprehensiveassessmentofsiteenergysavings

opportunities.Theenergyauditsaresharedwiththepropertyownerandprovideabaseline

forpreparinganEnergyImprovementPlan.Theenergyefficiencyreductionsidentifiedby

theauditmustalsobeconsideredandfactoredintothedesignofthesolarenergysystem.

§ ApprovalofScopeofWork–Thepropertyownerreviewstheenergyauditandproposed

scopeofworkwiththeEnergyEfficiencyProgramAdministratorandtogethertheyapprove

anEnergyImprovementPlan(EIP)thatincludessomeoralloftherecommendedenergy

efficiencymeasures.TheapprovedEnergyImprovementPlanmustreduceenergyusebyat

least15%.ApprovaloftheEnergyImprovementPlanisaconditionofprogramparticipation.

§ EnergyBenchmarking–Thepropertyownerisrequiredtobenchmarktheirpropertyto

assesscurrentenergyuseandmonitortheenergyperformanceofthepropertytotheextent

thatwhole-buildingenergyusagedataismadeavailablebyutilitiespursuantto

requirementsetbyAB802.AB802,whichrequiresthebenchmarkingofenergyusagedata

formultifamilybuildingswith5ormoreunitswithgreaterthan17accountsand50,000

squarefeet.102TheEnergyEfficiencyProgramAdministratorwillprovidesupporttoassist

propertyownersinimplementingenergybenchmarkingrequirements.

102AB802revisesPRCSection25402.10torequireutilitiestoprovideenergyconsumptiondataforcovered

buildingstothebuildingownersuponrequest,andrequirestheEnergyCommissiontoestablishabuildingenergy

usebenchmarkingandpublicdisclosureprogramforcertainbuildingsincludingmultifamilyhousing.

74

§ EnergyEfficiencyPhasingandScheduling–Thepropertywouldhaveupto36monthstofully

implementtheEnergyImprovementPlan.Duringthisperiod,energyimprovementswillbe

phasedinatthepropertyinconjunctionwithscheduledequipmentreplacements,

vacancies,andasenergyefficiencyprogramrfundsbecomeavailabletothepropertyowner.

§ EnergyEfficiencyProgramAccessandIntegration–TheEnergyEfficiencyProgram

Administratorassiststhemultifamilypropertyownersandtenantsindevelopingafunding

planforplannedenergyefficiencyimprovementsandaccessingenergyefficiencyresources

availableunderutilitycustomerandGreenhouseGasReductionFundprograms.

§ ProjectCompletionandDocumentation–OncetheapprovedmeasuresintheEnergy

ImprovementPlanareinstalled,thepropertysubmitsacertificationthattheenergy

efficiencyplanhasbeenimplemented.Theenergyefficiencytechnicaladministratorshould

undertakerandomsiteinspectionsorotherreviewstoverifyinstallation.

FundingforEnergyEfficiencyRequirements

WerecommendtheCommissionensurethatcomprehensivefundingforenergyefficiency

improvementsismadeavailableundertheMultifamilySolarRoofsprogramviathefollowing

fundingsources,inorderofpriority:

§ ExistingEnergyEfficiencyPrograms:Werecommendfundingforcomprehensiveenergy

efficiencyimprovementsprimarilybemadeavailablefromutilitycustomer,GreenhouseGas

ReductionFundedprograms,andhousingfinanceprograms.Theseprogramsincludethe

EnergyUpgradeCaliforniaMultifamilyprogramsthatareadministeredbyIOUs,Regional

EnergyNetworks,orCCA,(IOU,REN,orCCAadministered),thelargeandsmallmultifamily

LowIncomeWeatherizationProgram(LIWP)administeredbytheCaliforniaDepartmentof

CommunityServicesandDevelopment(CSD),andenergyefficiencyimprovementsfundedby

LowIncomeTaxCreditsawardedbytheCaliforniaTaxCreditAllocationCommittee(TCAC).

TheCommissioncangreatlyenhanceaccesstoratepayerenergyefficiencyprogramsby

adoptingrulesrequiringgreaterintegrationacrosstheratepayerenergyefficiencyprograms,

andbyallowingutilitiestopoolfundsfromtheirrespectiveprogramsforpurposesoftheAB

693efficiencyrequirement.Currently,theseresourcesaresiloedandextremelydifficultto

leverageorcombineforeligibleenergyefficiencyprojects.Poolingfundswouldenable

ownerstodocomprehensiveretrofitsbyminimizingnumerousandoftenconflicting

participationrequirements.Appropriateenergysavingscreditcouldbeapportionedtothe

respectiveprogramadministrators.

§ UnspentAB693funding:UnspentfundingfromprioryearAB693allocationsshouldbe

madeavailableininstanceswhereenergyefficiencyprogramresourcesarenotavailable,or

areinsufficient.WerecommendthattheCPUCensuretheProgramAdministratorhasthe

flexibilitytoprovidefundingfromtheMultifamilySolarRoofsprogramonacase-by-case

basistoimplementenergyefficiencyimprovements,subjecttotheavailabilityofunspentAB

75

693resourcesfrompreviousyears.Allocatingunspentfundsinagivenyeartocost-effective

energyefficiencyimprovementsisinpartrequiredbyAB693’simplementinglegislation,

whichstipulatestheenergyefficiencyrequirementbeequaltothatinPublicUtilitiesCode

section2852.103PublicUtilitiesCodesection2852(c)(3),inturn,providesthatunspentfunds

shallbeallocatedtocost-effectiveenergyefficiencyimprovements.104

§ NewFundingUnderPUCCodeSection748.5:Section748.5ofthePublicUtilitiesCode

providesthat:“thecommissionmayallocateupto15percentoftherevenues,includingany

accruedinterest,receivedbyanelectricalcorporationasaresultofthedirectallocationof

greenhousegasallowancestoelectricaldistributionutilitiespursuanttosubdivision(b)of

Section95890ofTitle17oftheCaliforniaCodeofRegulations,forcleanenergyandenergy

efficiencyprojects….”105AB693directedtheuseof10%oftheseresourcesforthe

MultifamilySolarRoofsProgram.Shouldfundingfromavailableenergyefficiencyprograms

andAB693beinsufficienttoimplementenergyefficiencyimprovementsunderthe

MultifamilySolarRoofsProgram,weproposethattheCommissionmakeavailablean

additional1-2%forefficiencyimprovementsundertheMultifamilySolarRoofsProgram,

fromthedirectallocationofgreenhousegasallowancestoelectricaldistributionutilities

pursuanttosubdivision(b)ofSection95890ofTitle17.

§ TransferringESAProgramResources:Asanadditionaloralternativefundingsourcefor

energyefficiencyimprovements,werecommendthataportionoftheunspentenergy

efficiencyfundsintheEnergySavingsAssistanceProgram(ESAP)bereprogrammedforuse

intheMultifamilySolarRoofsprogram.Between2009-2015,utilitiesaccumulatednearly

$400millioninunspentfunds,aportionofwhichcouldbeappliedtoefficiencyprojects

undertheAB693program.

ComplianceandDocumentation

Asevidenceofcompliancewiththeprogram’senergyefficiencyrequirements,participating

ownersshouldberequiredtoprovidethefollowingdocuments:

§ EnergyAuditApprovedEnergyImprovementPlan(providedorapprovedbytheenergy

efficiencytechnicaladministrator)

§ CertificationofEnergyEfficiencyProjectCompletion(providedbypropertyowner)

103PUCSection2870(f)

104PUCSection2852(c)(3)

105PUC.Section748.5(c)

76

XI. EnergyStorage106

AB693definesa“solarenergysystem”as“asolarenergyphotovoltaicdevicethat

meetsorexceedstheeligibilitycriteriaestablishedpursuanttoSection25782ofthePublic

ResourcesCode.”107ThePublicResourceCodeprovidesaddedclarificationthat,

"Solarenergysystem"meansasolarenergydevicethathastheprimarypurposeof

providingforthecollectionanddistributionofsolarenergyforthegenerationof

electricity,thatproducesatleastonekW,andnotmorethanfiveMW,alternating

currentratedpeakelectricity,andthatmeetsorexceedstheeligibilitycriteria

establishedpursuanttoSection25782.”108

Basedontheplainlanguageofthelaw,itslegislativehistoryandinterpretationsoftheterm

"solarenergysystem"byotherCaliforniaandfederalagencies,thedefinitionofthatterm

includesstoragedeviceswithinitscoverage.TheNonprofitSolarStakeholdersCoalition

recommendsthatthisviewoftheplainmeaningofthestatutorytermbeadoptedbythe

Commissionforthefollowingreasons:

§ Theplainlanguageof“solarenergysystem”mustrefertoallbalance-of-system

componentsofsuchasolarsystem.Thisobviouslywouldincludeallitscomponent

parts,suchasinvertersandmountingstructuresand,increasingly,storagedevices.109

§ Thelawdefinestheterm“solarenergysystem”underSec.25781(e)as“providingfor

thecollectionanddistributionofsolarenergy”–asolarprocessrelyingonallbalance-

of-systemcomponents,includingstorage.

§ Thelaw’sonlyrelevantlegislativehistory,theCPUCrecognizedthatthelawwouldbe

“significantlydifferentfromexistingrenewableenergyprograms…[andtheCPUC]

wouldneedtoopenanewproceedingtodesignandestablishtheprogramrules.”

Specifically,theCPUCanalysisstatedthatwhilethecurrentMASHprogramprovides

incentivesonlytosolar-electricsystems,“theincentiveprogramproposedbythisbill

wouldincentivize“qualifyingrenewableenergysystems.”110


107AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(a)(4).

108PublicResourceCode.Section25781(e)

109UndertheSelf-GenerationIncentiveProgram(SGIP)nearly500solarplusstorageprojectshavebeen

supportedbypublicsubsidiesinCaliforniabasedonthebestreadingoftheprojectsfunded.SeeSGIP

WeeklyStatewideReportavailableat

https://www.selfgenca.com/documents/reports/statewide_projects.110Curran,ElizabethandKochanowsky,Amy,CaliforniaPublicUtilitiesCommission,“DivisionAnalysis:

MultifamilyAffordableHousingRenewablesProgram.”SeeattacheddocumentinAppendixF.

77

§ OtherCaliforniaandfederalagenciesinterprettheplainlanguagestatutoryterm“solar

energysystem”tounequivocallyincludestoragedevices.Thisissointhe

implementationbytheCaliforniaStateBoardofEqualizationforpurposesofexcluding

propertytaxesonsolarinstallations;111asreaffirmedbytheCaliforniaCleanEnergy

Authority112whiletheU.S.DepartmentofEnergydefines“solarenergysystem”to

includeoptionalbatteriesaspartofatypicalsolarbalance-of-system.113

Alegalanalysissupportingtheeligibleofenergystorageasacomponentofan

integratedsolarenergysystemthatprovidesforthecollectionanddistributionofsolarenergy

isprovideinAppendixG.

InclusionofStorageMeetsTenantBenefitandEquityGoalsoftheLaw

Overall,thelaw’spurposeistoensurethatlow-incometenantsresidinginaffordable

multifamilyhousingreceivetheeconomicbenefitsofboth“cleanenergyandenergyefficiency

projects.”Thisisachievedthroughtheinstallationofsolarenergysystems,energyefficiency,

andlocalhiringinawaythathelpslow-incometenantsreducetheirelectricbills,whilealso

achievingtheotherenvironmentalandcleanenergygoalsofthestate.114

Tomeettheselegislativegoals,affordablehousingownersandtheirtenantsshould

havethesameoptionsasotherutilitycustomerstochoosethecleanenergytechnologiesthat

111CaliforniaStateBoardofEqualization-PropertyandSpecialTaxesDepartment,"GuidelinesforActive

SolarEnergySystemsNewConstructionExclusion."Availableat

https://www.boe.ca.gov/proptaxes/pdf/lta12053.pdf 112CleanEnergyAuthority,“CaliforniaSolarRebatesandIncentives:CaliforniaPropertyTaxExclusionfor

SolarEnergySystems.”Availableathttp://www.cleanenergyauthority.com/solar-rebates-and-

incentives/california/california-property-tax-exclusion/.113Seehttp://energy.gov/energysaver/small-solar-electric-systemsand

http://energy.gov/eere/energybasics/articles/solar-photovoltaic-system-design-basics.114Accordingtoarecentstudy,whensitedanddeployedaccordingtoairqualitydata,energystorage

(andotherdistributedresources)canreducerelianceonpollutingpeakerpowerplantsandlower

emissionsindisadvantagedcommunities.ResearchersatUCBerkeleyandnonprofitresearchinstitute

PSEHealthyEnergyfoundthatstoragecanstrategicallyreplacemorepollutingenergyservicesinthe

areasmostsusceptibletopoorairqualityandaddressdecades-olddiscrepanciesinenvironmental

justice,wherebypoorneighborhoodshavebeenmorelikelytositnearthedirtiestpowerplants.So

smartplacementofstorageunderanAB693incentiveregimecouldbothreducetenantbillsand

improvethehealthoflowincometenants.SeeKrieger,CaseyandShonkoff,“FrameworkforSitingand

DispatchofEmergingEnergyResourcestoRealizeEnvironmentalandHealthBenefits:CaseStudyin

PeakerPowerPlantDisplacement,”EnergyPolicy96(2016)302-311

78

bestsuittheirneedsnowandinthefuture–includingenergyefficiency,solar,andstorage.

Excludingtheselow-incomeconstituenciesfromincorporatingstoragedeviceswouldprevent

low-incometenantsandpropertyownersinthisunderservedmarketfromhavingequalaccess

tothefullarrayofsolarandstoragetechnologymarketsandstateincentivesthatnow

principallybenefitthestate’shigh-incomecustomers.

Havingsaidthat,theNonprofitSolarStakeholdersCoalition’spositionisthatAB693

providesincentivesforstorageasanoptionalcomponentofasolarbalance-of-system,where

appropriate,butstorageisnotrequiredinallcases.Decisionsonwhethertoincorporate

storagewithsolarshouldbelefttotheaffordablehousingpropertyownersandtheir

constituencies,dependingonwhatmakeseconomicsensetofulfilltheirhousingmissionand

providetenantbenefitswiththeincentivesupportunderAB693.

AdditionalStatutoryInterpretationArgumentsonStorageEligibility

Otherkeystateandfederalagenciesinterprettheterm“solarenergysystem”toinclude

batterystoragetomeetotherenvironmentalandenergylaws.

§ SB1–AkeyexpectationofSenateBill1,asreferencedintheCaliforniaEnergy

Commission(CEC)“GuidelinesforCalifornia’sSolarElectricIncentivePrograms,”isthe

expectationof“optimalsystemperformanceduringperiodsofpeakdemand.”115Asnet

gridelectricitydemandhasdecreasedduringsunnydaytimehours,shiftingpeak

demandperiodstowardsearlyeveninghoursoflowornosolarproductionisakey

legislativechallenge.Onlystoragedevicescanappropriatelyaddressthisproblemand

satisfythestate’spolicygoalofoptimizingsolarforpeakdemandperiods.

§ CPUC/CECPolicy–Theinclusionofenergystoragewithinthedefinitionof“solarenergy

system”isanexpresspolicypositionofboththeCECandCPUC.CEChasestablisheda

precedentfortheconsiderationofstorageaspartofasolarenergysystemwithin

SectionIII(F)ofits“RenewablesPortfolioStandardEligibilityGuidebook”.116Also,the

CPUCreferencestheseenergystoragepoliciesinDecision14-05-033,“Decision

RegardingNetEnergyMeteringInterconnectionEligibilityforStorageDevicesPaired

115CaliforniaEnergyCommission,"GuidelinesforCalifornia’sSolarElectricIncentivePrograms."

Availableathttp://www.energy.ca.gov/2012publications/CEC-300-2012-008/CEC-300-2012-008-ED5-

CMF.pdf.116CaliforniaEnergyCommission,“RenewablesPortfolioStandardEligibilityCommissionGuidebook.”

Availableathttp://www.energy.ca.gov/2015publications/CEC-300-2015-001/CEC-300-2015-001-ED8-

CMF.pdf.

79

withNetEnergyMeteringGenerationFacilities”.117(Emphasisadded).Thus,theCPUC

hasdefinedastatewidegoaltoincludestoragewithinsolarenergysystemstoadvance

thecombinedsystemsforpurposesofnetmeteringandRPScompliancegoals.

§ PriorCPUCInterpretations–TheCPUChasusedthisexactlegislativeinterpretation

approachbeforeinasimilarincentivecontextquestioninvolvingtheSelf-Generation

IncentiveProgram(SGIP)whenstoragewasfoundtobeanenablingtechnologytoother

statutorilycoveredtechnologies.In2008,Decision08-11-044,theCPUCconcludedthat

storagedevices,althoughnotexplicitlymentionedinthestatuteatthattime,

neverthelesswouldbeeligibleforSGIPincentivesasa“coupled”technologybecauseit

enhancedthevalueofthestatutorilycoveredtechnologiesforpurposesofpeak

demandreduction.ThisisthesameargumentthatshouldbeadoptedherebythePUC

toallowforstorageincentives“coupled”withsolarunderAB693toadvancecurrent

peakdemandreductionandotherlegislativegoals.118

§ DepartmentofTreasuryInterpretations–Theinclusionofstoragewithinthedefinition

of“solarenergysystem”isperhapsmostclearlyexpressedatthefederallevel.Existing

Treasuryregulationstreatenergystoragedevicesasqualifying“solarenergyproperty”

forthepurposesofSection48investmenttaxcredit(ITC)eligibility.TreasuryRegulation

§1.48-9(d)providesthatqualifying“energyproperty”includes“solarenergyproperty”

forthepurposesofSection48.Section1.48-9(d)(3)statesthat“[s]olarenergyproperty

includesequipmentthatusessolarenergytogenerateelectricity,andincludesstorage

devices…andpartsrelatedtothefunctioningofthoseitems.”119Aninterpretationofthe

term“solarenergysystem”toexcludestoragewouldconflictnotonlywiththeseIRStax

rulesbutalsowithAB693Section2870(f)(4),whichrequiresleverageof“federaltax

credits.”Limitingthelawtojustsolargenerationwoulddeprivelow-incometenantsand

affordablehousingdevelopersofthe30percentITCavailabletoreducethecostsfor

combinedsolarandstoragesystems.

TheSolarandStorageValueProposition:HowIntegratedSystemsCreateGreaterTenant

EconomicBenefitsThanAloneSolar

TheinclusionofstoragedevicesinAB693implementationenablesadditionalvalue

creationthroughutilitybillsavingsforlow-incometenantsthatisgreaterthanwouldbe

117CaliforniaPublicUtilityCommission,Decision14-05-033,“DecisionRegardingNetEnergyMetering

InterconnectionEligibilityforStorageDevicesPairedwithNetEnergyMeteringGenerationFacilities.”

Availableathttp://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M091/K251/91251428.PDF.118CaliforniaPublicUtilityCommission,Decision08-11-44,“DecisionAddressingEligibleTechnologies

UndertheSelf-GenerationIncentiveProgram(SGIP)andModifyingtheProcessforEvaluatingSGIP

ProgramChangeRequests.”Availableat

http://docs.cpuc.ca.gov/published/FINAL_DECISION/94272.htm.119InternalRevenueService,Treasury,"§1.48–9Definitionofenergyproperty."Availableat

https://www.gpo.gov/fdsys/pkg/CFR-2011-title26-vol1/pdf/CFR-2011-title26-vol1-sec1-48-9.pdf

80

availablewithsolar-onlyinstallations.Specifically,energystoragedevicespairedwithsolarcan

deliveradditionalbillsavingsfortenants(andpropertyowners)overstand-alonesolarthrough

twoavenues:

1) Reductionofdemandchargesforcommonarealoadswherethoseeconomicbenefits

canbesharedbyownerswithtenants.

2) Shiftingtenantsolarenergyuseundertime-of-userateswithstorage,directlyresulting

inlowerelectricbillsfortenants.

BothofthesevaluepropositionsaddedbyenergystoragemeetAB693goalstodeliverthe

mosteconomicbenefitsofsolarenergysystemstolow-incometenants—inwaysthatsolar-only

systemswithoutstoragecannotprovidenoworinthefuture.

ReductionofDemandCharges

Thereductionofdemandchargeexpensesforcommonarealoadsprovidesproperty

ownerswiththeabilitytodramaticallyreducetheiroverallelectricbills,providingthemwith

greaterincentivetoinstallsolarenergysystems120andnewopportunitiestosharethose

savingswithlow-incometenants.Quantitativeeconomicevidenceofthesesavingsispresented

inthereport“ClosingtheCaliforniaCleanEnergyDivide:ReducingElectricBillsinAffordable

MultifamilyRentalHousingwithSolar+Storage.”121

Thereportfindsthatitmakeseconomicsensetodayformanyaffordablerentalhousing

propertiesinCaliforniatoincludestorageinsolarinstallations.Infact,storagewasfoundto

improvetheeconomicreturnofasolarenergysystemacrossallofCalifornia’sinvestor-owned

utilityjurisdictions.Insomecases,addingstoragecouldvirtuallyeliminatecommonarea

electricbills,nearlydoublingthebillsavingsofstand-alonesolarataboutathirdoftheinstalled

120Itgoeswithoutsayingbutdeservesrepeatingthatnobenefitsforlow-incometenantswillbederived

underAB693unlessaffordablehousingownershavethecorrectincentivestoinstallsolarenergy

systemsthatcangeneratethosetenantsavings.AB693isanincentiveprogram,notamandate.Unless

housingdeveloperscanseesomesavingsfromthesesystemsandotherwisefindwaystofinancethese

systems,therewillbenoprojectsandthusnoopportunitiestoshareeconomicbenefitswiththeir

tenants.121CaliforniaHousingPartnership,CenterforSustainableEnergy,CleanEnergyGroup,andGeli,“Closing

theCaliforniaCleanEnergyDivide:ReducingElectricBillsinAffordableMultifamilyRentalHousingwith

Solar+Storage.”Availableathttp://www.cleanegroup.org/ceg-resources/resource/closing-the-california-

clean-energy-divide/.

81

cost.Asshowninthefigurebelow,atypicalaffordablehousingpropertyinSouthernCalifornia

couldincreaseannualcommonareasavingsfrom$11,400withsolar-aloneto$21,700with

solarandstorage,resultinginanannualelectricitybillofabout$300.122

Source:CleanEnergyGroup

TomeetAB693goals,thereareanumberofwaystoensuretenantsdirectlysharein

thesecommonareasavings.Forsomeproperties,moreofthesolarportionoftheintegrated

solarenergysystemcanbeallocatedtodirectlyoffsettenantelectricityconsumptionthan

wouldbefeasiblewithoutstorage,whichisparticularlyimportantformulti-storybuildingsand

thoselocatedindenseurbanareas.Otherpropertiesmaychoosetoadoptasharedsavings

model,underwhichtenantsaredirectlyallocatedaportionofthecommonareademand

chargesavings.Theseandothermeasurescanbedevelopedwithinputfromaffordable

housingpropertyownerrepresentativesandorganizationsrepresentingtheinterestsoflow-

incometenants.Inanycase,onceestablished,thisprogramshouldestablishclearmetricsthat

wouldleadtotheadoptionofadministrativeapproachestoensureprimarytenantbenefits

throughthesemechanisms.

122Ofcourse,notallaffordablehousingpropertieswillhavetheloadcharacteristicstoachievethese

savings.Thatisthepointofmakingstorageaneligible,butnotmandatory,componentunderAB693.

Thesearecomplexquestionsthatpropertyownersshouldberesponsibletoexplorebasedontheir

utilitybillsandpropertyneeds.Anyincentiveschemeshouldletthemdevelopthebestcombinationof

technologysolutions–includingenergyefficiency,solarandstorage–creatingthebestbusinesscase

usingavailableAB693incentivesandotheravailablesourcesoffunding,includingfederaltaxcreditsfor

solarandstoragesystems.

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ShiftingTenantSolarEnergyUnderTime-of-UseRates.

Thesecondavenuefortenantbillreductionaftersharingdemandchargesavings

throughsolarandstorageistakingadvantageofwaystoreducetime-of-use(TOU)rate

impacts.Undervariousstateenergypolicychanges,TOUrateswillsoonbeappliedtoall

Californiaresidentialutilitycustomers.SolarcustomersarealreadybeingtransitionedtoTOU

rates,anddefaultTOUrateswillbeintroducedforallresidentialcustomersin2019,including

CAREcustomers.Asaresult,low-incometenantslivinginaffordablerentalhousingwillhave

theopportunitytodirectlybenefitfromtheincorporationofstoragedevicesthroughtheability

toshifttheconsumptionorexportofsolarenergyfromperiodsoflowelectricitypricingto

periodsofhighelectricitypricing.

Newinformationfromtheabove-referencedreportshowsthatsolartime-shifting

throughaddingstoragecanresultinlowertenantelectricitybillsandmaximizethevalueof

solarsysteminvestments.Thatis,thistime-shiftingandTOUrelatedbillreductionresultsonlyif

storageisaddedtothesolarinstallation.Theseresultsareforanillustrativeaffordablehousing

propertywith75units,andassumestenantsareonacurrentSouthernCaliforniaEdison(SCE)

residentialTOUratetariff.Addingstorageincreasesannualtenantsolarbillsavingsbymore

than$5,000peryear.Theseadditionalsavingsrepresentadirectbenefittotenantsthatwould

notbeavailablewithouttheinclusionofstoragedevices.

Source:Geli/CleanEnergyGroup

Addingstoragetosolarresultsintwoadditionalwaystodeliverbillsavingsunder

currentelectricratetariffsandreducetenantenergyexpensesunderAB693ontopofsavings

fromasolar-onlysystem.First,basedonthenewanalysis,tenantscouldshareinover$10,000

inadditionalutilitybillsavingsfromreducingdemandchargesoncommonarealoads.Second,

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tenantscouldbenefitdirectlyfromtheadditional$5,000ormoreinsavingsannuallyfrom

addingstoragetoastand-alonesolarsystem.Thus,addingstoragetoanillustrativebuilding

undercurrenttariffscanresultinmorethan$15,000peryearinadditionalsavingsavailableto

sharewithtenantsunderthelaw.Overthelikelylifetimeofsuchprojects,suchadditional

savingscouldtotalover$200,000inelectricbillsavingsthatwouldbeavailabletosharewith

tenantsforthissinglerepresentativeprojectalone–butonlyifstorageisaddedtosolar

systems.

FutureEconomicOpportunitiesforSolarandStorage

Additionalopportunitiesforbillreductionthroughcombinedsolarandstoragewill

becomeincreasinglyimportantasnewpoliciescomeintoplaceinCalifornia.Distributedenergy

resourcemarketopportunities,NEMpolicies,andutilityratetariffswillallevolveoverthe

lifetimeoftheimplementedmultiyearprogram.

Toprotecttenantsfromchangesthatcouldnegativelyimpactthevaluepropositionof

solarandincludetheminCalifornia’senergytransition,AB693shouldbegearedtoleaveevery

pathwayopentoprovidingvaluetolow-incomecustomers.

Toassessthatfuturescenarioandhowstoragecouldmitigateagainstharmtolow-

incometenants,itisimportanttolookattheeconomicanalysisofpotentialtenantelectricbill

savingsenabledbystorageunderexpectedfuturesolarpolicyscenarios.Theanalysisbelowis

basedonpilotedfutureTOUratesproposedbySCE,wherepeakperiodshaveshiftedtolaterin

thedaywhensolarPVisnotgeneratingelectricity.Addingstorageincreasesannualtenantbill

savingsbynearly10percent,resultinginanadditional$12,600indirecttenantsavingsper

year.

84

Source:Geli/CleanEnergyGroup

Addingthistothe$10,400insavingsachievedthroughdemandchargereduction,an

affordablerentalhousingpropertywith75unitsinsouthernCaliforniawouldrealizean

additional$23,000inannualsavings,representingover$300insavingsperuniteachyearthat

wouldnotbeavailablewithoutstorage.Underthispredictedfuturescenario,storagewould

addover$300,000inelectricbillsavingstoasolarinstallationovertheprojectedlifetimeofthe

project.

Theseeconomicjustificationsdonotimplythatenergystorageisrightforallmultifamily

affordablehousingproperties.Incaseswheresimilarutilitytariffsandotherconditionsapply,

combiningstoragewithsolarresultsinmoreeconomicsavingsavailabletoaffordablehousing

propertiesunderAB693thansimplyprovidingincentivestostand-alonesolar.

Aswithsolar-onlysystems,solarenergysystemsincorporatingstorageshouldbe

implementedinawaythatensuresthesystemprimarilybenefitsaffordablehousingtenants.

Accordingly,thedecisiononwhethertoincorporatestoragewithsolarshouldbelefttothe

affordablehousingpropertyownersandtheirconstituencies,dependingonwhatmakes

economicsensetofulfilltheirhousingmissionandprovidetenantbenefitswiththeincentive

supportunderAB693.

EnergyStorageIncentives

Storagedevices,whileanintegralpartofmanysolarenergysystems,areavery

differenttypeoftechnologythansolar,withuniquecapabilitiesandseparatecosttrajectories.

Duetothesedifferences,aseparateincentivestructureshouldbeadoptedforthestorage

portionofasolarenergysystem.However,inclusionofastoragedeviceinasolarenergy

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systemshouldnotaltertheproposedincentivestructureforthesolarportionoftheproject.

Werecommendthatthefollowingincentivestructureforsolarenergysystemsthatinclude

storagedevices:

§ SolarIncentive.IncentivesforsolarPVpanelsandbalance-of-systemcomponents,

excludingstoragedevices,shouldremainattheproposedincentivelevelforasolar

energysystemregardlessoftheinclusionofstorage.Instead,werecommendofferinga

separateincentiveforstorage(seebelow).

§ StorageIncentivewithModifiedStepdown.Thereshouldbeaseparateincentive

structuredefinedspecificallytoapplytothestorageportionofasolarenergysystem.A

goodbasisforsettingtheinitialincentivelevelforstoragedevicescanbefoundinthe

recentCPUCproposeddecisionrevisingtheSGIP.123Thedecisionproposestheadoption

ofincentivesforadvancedenergystoragetechnologiesataninitiallevelof$0.50per

watt-hourforstoragesystemsgreaterthan10kilowattsand$0.60perwatt-hourfor

systemsof10kilowattsorsmaller,withafoursubsequentstepsreducingtheincentive

by$0.05perwatt-hourateachstep.Settingthesamestorageincentivestructurefor

storagedevicesunderAB693shouldcatalyzeinvestmentinstoragetechnologies

withoutoverlysubsidizingthetechnology.

Whileitmakessensetobasethestoragedeviceincentiveonthestructuredefinedin

theSGIPdecision,thestepdowninincentivelevelsshouldnotnecessarilyfollowthe

sametimeline.Likesolar,storagedevelopmentfortheaffordablehousingsector,which

ismorecomplexmarketduetocomplicatedfinancingstructuresandsplitincentives,

requiresaslowerdeclineinincentivelevelsthanforthelargerCaliforniamarket.The

storageincentivelevelshouldbeperiodicallyreviewedbytheprogramadministrator

andadjustedasnecessary.

• CapforSolarEnergySystemIncentive.Thetotalsolarenergysystemincentiveavailable

underAB693,inclusiveofbothsolarandstorageincentives,foranyprojectshouldnot

exceed100percentoftheinstalledsystemcost,adjustedforothersourcesoffunding,

forportionsofthesystemprovidingeconomicbenefitstotenantsandshouldnot

exceed70percentoftheinstalledsystemcost,adjustedforothersourcesoffunding,

forportionsofthesystemprovidingeconomicbenefitstocommonareas.

123CaliforniaPublicUtilitiesCommission,“DecisionRevisingtheSelf-GenerationIncentiveProgram

PursuanttoSenateBill861,AssemblyBill1478,andImplementingOtherChanges.”Availableat

http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M162/K005/162005693.PDF.

86

Additionally,boundariesshouldbesetonsystemsizingtoensuretheincentivestructure

promotesdeploymentofstoragesystemsdesignedtooptimizeeconomicreturnforboth

commonareaandtenantloads.Eachstoragesystemwouldhavetwosizingconstraints:Power

(kilowatts)andDuration(hours).

§ Power.Forcommonarealoads,theprimaryeconomicopportunityforstorageis

currentlythroughpeakdemandreduction.Becauseofthis,theportionofastorage

devicesizedtotargetcommonarealoadsshouldbelimitedtoaratedpowerofno

greaterthanaproperty’santicipatedpeakdemand.

Fortenants,theprimaryeconomicopportunityforstorageiscurrentlythroughenergy

time-shifting,alsoknownasenergyarbitrage.DuetothegoalofAB693todeliver

tenantbenefitsthroughdeploymentofsolarenergysystems,storagedevicesdesigned

fortenantenergytime-shiftingshouldbelimitedinratedpowertotheratedpower

outputofsolarsystemdeployedfordirecttenantbenefits.Inthisway,thestorage

devicewillbesizedappropriatelytoshiftsolargeneratedenergyaswellashavean

opportunitytotakeadvantageofavailablefederalinvestmenttaxcreditsforsolar

energysystemcomponents.

Astoragedevicedesignedforbothcommonareaandtenantbenefitsshouldhavea

totalpowerratingofnomorethanthecombinedtotalofanticipatedpeakcommon

arealoadandratedpoweroutputofsolardesignatedtodirectlybenefittenants.

§ Duration.BasedonananalysisofnineCaliforniaaffordablehousingproperties,optimal

durationforcommonareapeakdemandreductioninaffordablehousingrangedfrom

1.5hoursto3hours,withanaveragedurationof2.6hours.124

ThisisconsistentwithanalysisbyGelithatwasincludedincommentssubmittedbythe

solarindustrygroupCALSEIAregardingtheMay16th,2016CPUCproposeddecisionto

reviseSGIP.125Thefigurebelow,whichwasincludedinCALSEIA’scommentstothe

CPUC,illustratesthatthevalueofdemandchargemitigationbeginstodropoffatthe2-

hourdurationpointandsignificantlydeclinesafter4hours.

124CaliforniaHousingPartnership,CenterforSustainableEnergy,CleanEnergyGroup,andGeli,“Closing

theCaliforniaCleanEnergyDivide:ReducingElectricBillsinAffordableMultifamilyRentalHousingwith

Solar+Storage.”Availableathttp://www.cleanegroup.org/ceg-resources/resource/closing-the-california-

clean-energy-divide/.125CaliforniaSolarEnergyIndustriesAssociation,"CommentsoftheCaliforniaSolarEnergyIndustries

AssociationontheProposedDecisiononReformstotheSelf-GenerationIncentiveProgram."Available

athttp://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M163/K152/163152824.PDF

87

Source:CaliforniaSolarEnergyIndustriesAssociation,Geli

AnanalysisbyGeliofthevaluepropositionforstoragedevicesperformingresidential

energytime-shiftingcametoasimilarconclusion.Thefigurebelowshowstheenergyarbitrage

valuepropositionofa120kWstoragedeviceshiftingsolarenergytoimpactaffordablehousing

tenantloadsunderapredictedfutureSouthernCaliforniaEdisonTOUratetariff.Atabout300

kWh,orastoragedurationof2.5hours,thevalueindollarsperkilowatthourbeginstodecline

morerapidlyandsavingsbegintoleveloff.Asimilarinflectionpointwasfoundfortenants

underPG&EandSDG&ETOUratetariffs.

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Figure2.GeliAnalysisofEnergyStorageSavings(ESS)

Sizevs.Savings

Source:Geli,CleanEnergyGroup

Basedontheseresults,itisrecommendedthatstoragedevicedurationincentivized

underimplementationofAB693belimitedtonomorethan3hours.Sothat,forexample,a

storagedevicewithapowerratingof100kWbelimitedtoacapacityofnomorethan300

kWh.Thesepoweranddurationconstraintsshouldallowforoptimalsystemdesign,while

discouraginguneconomicoversizingofstoragedevices.

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XII. ProgramAdministrativeStructure126

AB693requirestheCommissiontoputinplaceanappropriateadministrativestructure

toimplementtheMultifamilySolarRoofsProgram.Todeterminewhatadministrativestructure

ismostappropriate,AB693directsthat:

Thecommissionshallconsiderthemostappropriateprogramadministrationstructure,

includingadministrationbyaqualifiedthird-partyadministrator,selectedbythe

commissionthroughacompetitivebiddingprocess,oradministrationbyanelectrical

corporation,inanexistingorfutureproceeding.127

Thedecisiononwhethertoselectathird-partyadministratororadministrationbyan

electricalcorporationshouldtakeintoconsiderationanumberoffactors,includingthose

describedbelow.

AlignmentofMission

Theadministrativestructuremustbecompatiblewith,andcapableofdirecting,a

markettransformationthroughthedeliveryofacomprehensivemenuofenergyservicesand

investmentsthatareprovidedinamannerbothresponsiveandsensitivetotheenergyneeds

ofpropertyownersandlow-incomerenters.Toaccomplishthis,theremustbeaseamless

alignmentbetweenthemissionoftheProgramAdministratorandthemissionofthe

organizationsowningandoperatingtheaffordablehousing,theorganizationsrepresentingthe

interestsofthelow-incometenantsresidingattheseproperties,andotherstakeholdersofthe

program.

CapacitytoProvideAdministrativeSupporttoMeetAllRequirements

AsdiscussedinSection2ofthisJointProposal,theProgramAdministratorwillbe

requiredtocarryoutanumberoftechnicalandsupportfunctionsthatwerenotconducted

underMASHandthatareuniquetotheMultifamilySolarRoofsProgram.Theseinclude:

126Questions10,17,24and25oftheALJ’sJuly8,2016Rulingarecoveredinthissection.

127Cal.Pub.Util.Code§2870(d).

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i. Ensurethattheprogramincentivesarealignedwithprogramcostsandaccountfor

leveragedresourcessothat“noindividualinstallationreceivesincentivesatarate

greaterthan100percentofthetotalsysteminstallationcosts.”128

ii. Ensurecompliancewithgeographicdiversityrequirements.129

iii. Provideoutreachandtechnicalassistanceindisadvantagedandunderserved

communitiestoaddressbarrierstoaccessingrenewableenergy.

iv. EnsurecompliancewithrequirementsthatPVgenerationisprimarilyallocatedto

tenantsandthatutilitytariffsprovideadirecteconomicbenefittotenants.130

v. Monitorandensurecompliancewithlocalhiring.131

vi. Providetechnicalsupportandfacilitate“one-stop”accesstoutilityenergy

efficiencyprogramresourcestoimplementenergyefficiencyrequirements.132

vii. Developprotocolsandverifycompliancewithsystemperformanceandoperation

andmaintenancerequirements.133

viii. Conductanalysisandmarketdemandassessments.134

ThepreviousIOUadministrativemodeldevelopedforprogramssuchasMASHisnotsufficient

tomeetthedemandsandchallengesofaprogramascomplexasAB693andtheneedsofa

housingmarketthattodatehasbeenlargelyunderservedbyratepayerenergyprograms.In

particulartheMASHIOUmodelwouldbestructurallyunabletoensurecompliancewith

geographicdiversityrequirementsanditwouldlacktheefficienciesandcapacitytoperform

mostoftheotherkeytaskslistedabove.

AdministrativeEfficiency,Consistency,andFlexibility

Requiringmultipleadministrativestaffs,andreplicatingadministrativeprocesses,

marketingplans,localhiringplans,andcomplianceprotocolsmultipletimes,foreachelectrical

corporation,wouldundulyaddtoadministrativecost.Sincemanyofadministrativesupport

functionsarefixedcost,astructurewithmultipleadministratorswillpresentdifficultiesand

constraintswithinthebudgetlimitssetfortheprogram.Suchbudgetconstraintscould

128AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(f)(4)an(5).

129AB693.Section1(e).

130AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(f)(2)and(g)(2)

131AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(f)(6)



134AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(j)(1)and(2).

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adverselyaffectthedeliveryofsupportortechnicalservicestoprogramstakeholdersto

addressbarriersandbuildcapacitytoimplementenergyefficiencyimprovementandinstall

solarenergysystems.

Multipleadministrators,eachwiththeirownstaffsandadministrativeprocesses,would

addcomplexityandadministrativeburdensforpropertyowners,whowouldhavetoaccessthe

programatmultiplepoints,navigateslightlydifferentimplementationprotocolsandpractices,

andrespondtorequeststomultipleadministratorstoimplementtheirprojects.Focusgroups

ofpropertyownersconductedbyCoalitionmembershaveshownconclusivelythatthese

inefficienciesandburdenswouldhaveachillingeffectonparticipationratesbytheseproperty

ownersanddoomtheProgramtofailure.Multipleprogramadministratorswouldalso

contributetodifferencesinthelevelandqualityofservicesprovidedtosupporttheprogram.

Unevenoutreachortechnicalsupportmightalsoresult,andadverselyaffectprogram

participationandcompliancewithgeographicdiversityrequirementsordelayimplementation.

Propertyownersrequirecertainty,consistency,andsimplicityintheadministrationof

programs,especiallyoneascomplexastheMultifamilySolarRoofProgram,tosecuretheir

participation.

Insummary,thescopeandcomplexityofAB693requiresasinglepointofentryandthe

coordinateddeliveryofadministrativesupportandtechnicalservicesinsteadofreplicating

administrativeprocessesmultipletimes.

NeedforSingle,StatewideAdministrator

TheNonprofitSolarStakeholdersCoalitionrecommendsandproposesthatathird-party

statewideProgramAdministratorbeselectedtoadministertheMultifamilySolarRoofs

Program.Thereareseveralkeybenefitstothisadministrativestructurethatwouldresultina

moresuccessfulprogramandprovidethemaximumbenefitstolow-incometenantsthan

traditionalIOUadministrativestructures.

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First,IOUshavenotachieveddesiredlevelsofpenetrationforotherlow-income

programssuchastheCAREandEnergySavingsAssistancePrograms(ESAP).135Inthisregard,

considerableeffortshavebeenmadetoexpandenergyefficiencyservicesformultifamily

affordablehousingpropertiesundertheESAP.Theseeffortshavebeenlargelythwartedinthe

Commission’sproceeding,contributingtolowerprogramparticipationbyrentersand

multifamilypropertyowners.

Asevidence,theCoalitionpointstothegeneralenergyefficiencyproceeding,wherethe

problemstatementsprovidedbyPG&E,SDG&E,andSCEfortheirbusinessplanshavelargely

concludedthatmultifamilypropertiesare“hardtoreach”andare“limitedintheirefficiency

improvementopportunities”becauseof“splitincentive”issuesandthat“onlyasubsethave

highpotentialforenergyefficiencysavings.”IOUProgramAdministratorshavealsosuggested

thatmultifamilyenergyefficiencyprogramshavelowparticipationbecauseoflowratesof

return.SCEobservedthat“energyefficiencyisarelativelylowpriorityformultifamilyproperty

owners,likeallbusinesses,theyhavemanydemandsontheirresources.”

Thesegeneralizationsarenotapplicabletoallsegmentsofthemultifamilymarket.

Somesegmentsofthemultifamilymarkethavebeenengagedinenergyefficiencystrategies

andsegmentsofaffordablehousingmarketsincludeplanningandhousingqualityrequirements

thattargetenergyefficiencyimprovements,subjecttotheavailabilityoffunding.Such

misunderstandingsaboutmultifamilyhousingmarketsultimatelyunderminedtheeffectiveness

ofratepayerprogramswithrespecttothismarketsegment.

Incontrast,theLIWPLargeMultifamilyprogram,fundedbyCapandTradeallocations,

offersamodelofasuccessfulstatewide,third-partyadministeredprogramthat,unlikeIOU

programs,providesaone-stopdeliverymechanismintegratingsupportandtechnicalservices

andenergyfundingresourcestofacilitatecombinedenergyefficiencyandsolarimprovements.

Thisprogram,launchedin2016,hasbeensuccessfulinrecruitingmultifamilypropertyowners

inundertakingcomprehensiveenergyimprovementsandhasevencometotheaidofMASH

projectsthathavebeenstalledbecauseofaninabilitytocovercostsforresidentialinstallation.

135

See CPUC, Low-income Oversight Board, Draft Meeting Minutes, pp. 7-8 (Feb. 23, 2016), available

at http://www.liob.org/meetings.aspx.

93

TheLIWPLargeMultifamilydemonstrateshowstatewidethird-partymanagedand

administeredprogramscanintroducenewserviceconceptsandcomprehensivesolutionsfor

servingmultifamilymarkets,notpossiblewithintraditionalIOUbusinessmodels.

TransferableAdministrativeRequirementsandProcesses

Anumberofcoreadministrativeprocessesrequirementsmustbedevelopedto

implementtheprogram.Forexample,therearesomefeaturesoftheMASHprogramthatare

readilytransferableandusefultotheimplementationofAB693.Theseincludestatelicensing

requirementsforsolarcontractors,PVequipmenteligibility,warrantyandsystemperformance

requirements,andinspectionrequirements.

Non-TransferableAdministrativeRequirements

TherearealsoanumberofrequirementsfromtheMASHprogramthatarenot

transferableandshouldbesubstantiallyrevisedundertheMultifamilySolarRoofsProgram.

Theseinclude:

§ ApplicationandReservationProcess:TheMASHapplicationandreservationhas

contributedtoseveralundesirableoutcomes.Programreservationshavebeen

monopolizedbyarelativelysmallgroupofsolarcontractors.Thesepracticesareevident

bytheshorttimeperiodinwhichIOUsopeneduptheirwaitliststoacceptnew

applications.Whenwaitlistswereopened,thesesolarprovidersmademass

reservations,insomecasesenrollingmultiplepropertieswithinahousingorganization’s

portfolio.Thecurrentadministrationofthisprocessalsopermittedpropertiesonawait

listtobesubstitutedwithotherpropertiesownedbythesamehousingorganizationifit

wasdecidedthattheproposedsolarprojectwasnotviable.Thisloopholeencouraged

solarproviderstoover-enrollandoversizepropertiesatthefrontenduntilproject

interestorviabilitywasactuallydetermined.Theresultofthesepracticeswasthe

exclusionofothermultifamilypropertyownersfromapplyingforandparticipatingin

theprogram.

Toaddressthisproblem,theCoalitionrecommendsthefollowingcorrectiveactionsare

necessary:

i. Discontinuethepracticeofallowingsolarcompaniestoenrollmultipleproperties

forapropertyowneratonetime.

ii. Requirethatmultifamilypropertyownersmakedirectprojectapplications.

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iii. Establishaprocesstophaseapplicationapprovalsonaquarterlybasis

iv. Setalimitonprojectreservationsthatahousingapplicantcanreceiveduringa

quarter

v. Providepropertyownerswithconditional(60day)reservationstopermithousing

organizationstoobtaincompetitivebidsfrommultiplesolarcontractorsbefore

lockinginreservations

§ ReservationPeriod:ForprojectswithLIHTCfunding,thereservationperiodmustbe

extendedto36months,consistentwiththerequirementsintheNewSolarHome

Partnershipprogram,tofitwiththeprojectdevelopmentcyclefortheseprojects.

§ EnergyEfficiency:TheMASHenergyefficiencyrequirementsshouldnotbeadoptedfor

theMultifamilySolarRoofsProgram.Theenergyefficiencyrequirementsproposedin

SectionXshouldbeadopted.

§ IncentiveLimitations:AB693specifiesadditionalincentivelimitationrequirementsthat

mustbeaddressed.

§ PaymentDesignation:PaymentunderAB693shouldbemadedirectlytotheproperty

owner,notthesolarinstaller,toensureprojectaccountability.

NewRequirementsandProcesses

Thereareanumberofnewareasthatshouldbeaddressedintheadministrativeguidelinesfor

theMultifamilySolarRoofsProgram,including:

§ ConsumerProtections:Additionalconsumerprotectionarenecessarytoensurethat

propertyownersandtenantshaveaccurateandreliableinformationconcerningthe

solarsystem,systemcosts,energysavingsbenefits,operationsandmaintenancecost,

andassumptionsusedtoprojectout-yearenergysavingsandcosts.

§ OperationandMaintenance:Guidanceisneededtoaddresssystemmonitoringand

O&MrequirementsforTPOinstalledsystems.

§ PerformanceGuarantees:Guidanceisneededtoaddresssystem

performance/productionguaranteerequirementsforTPOinstalledsystems.

§ EnergyStorage:Guidanceisneededonenergystorageequipmentstandardsand

protocols.

DataandReporting

GreatertransparencyshouldbeprovidedfortheMultifamilySolarRoofsProgramthan

wasprovidedfortheMASHprogram.Forthepublictoreviewtheperformanceandoutcomes

oftheprogram,agreaterlevelofinformationontheparticipatingpropertiesandinstalledsolar

energysystemsisneeded.

§ ProjectDataElements:Dataelementsavailabletothepublicshouldinclude:

i. Propertynameandaddress

ii. Numberofresidentialunits

iii. PropertyType(LIHTC,HUD-assisted,PHA,USDA-RD)

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iv. Propertyelectricityuse(aggregatedpre-solarbaseline

v. Solarenergysystemownership(Property,TPO)

vi. Solarenergysystemincentives(residents,commonarea)

vii. Solarenergysystemdetails(PV/storagesize,costs,panels,inverters,contractor)

viii. Solarenergysystemallocation(residents,commonarea)

ix. Solarenergysystemfinancialprojections(estimatedenergysavingsforresidents,

commonarea)

x. Dateinstalled

xi. Energyefficiencyreductionestimate/goalforproperty

§ GeographicDataElements(byCensusTract)

i. Solarsystemsinstalled,underreservations,pendingapplications

ii. Solarcapacityinstalled,underreservations,pendingapplications

iii. Low-incomerentersreceivingsolarbenefits

iv. CAREeligiblecustomersreachedbyprogram

v. PVgenerationallocatedtooffsettenantusage

vi. Numberoflocalhiresfromsolarprojects.

vii. GHGemissionreductions.

§ DataDisclosureandTransparency:TheCommissionshouldrevisepoliciesconcerning

thedisclosureofprograminformationonmultifamilypropertiesreceivingincentives

undertheMultifamilySolarRoofsProgram.

UndertheMASHprogram,informationaboutprojectapplications,propertynamesand

addresseswerenotmadeavailableintheCaliforniaSolarInitiativepublicdatabase.

Additionally,staffhasdeniedrequestforthisinformationfromnonprofit,public

advocacyorganizations.Thelackoftransparencyhashamperedeffortsbyorganizations

toevaluatetheprogramsusebyhousingorganizations,tenantcoverageofinstalled

systems,andtheamountofMASHinstallationswithinDACandotherunderserved

communities.

Moreover,thereisnoapparentpolicyrationalthatwouldpreventthereleaseofthis

information.Affordablemultifamilyrentalpropertiesreceivinghousingfinancial

assistanceandsubjecttodeedrestrictionsandregulatoryagreements,suchasthose

propertiesfundedbyMASH,arealreadyincludedinpublicdatabases.Thesedatabases

includeinformationonpropertyname,address,andtypeofpubicassistancereceived

bytheproperty.

WerecommendthatthesameleveloftransparencybeprovidedfortheMultifamily

SolarProgram.

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SafetyIssue

TheALJhasrequestedcommentsonwhatsafetyissuesshouldbeconsideredinthe

implementationoftheprogram,andwhoshouldberesponsibleformeetinganysafety

requirements.Thecentralsafetyissuesaffectingprogramimplementationconcernthe

installationofthesolarenergysystemsandtheongoingoperationandmaintenanceofthe

installedequipment.

Withregardstoinstallation,mattersofsiteandworkersafetyshouldbethe

responsibilityofthesolarcontractor.Moreover,theinstalledsystemshouldbefreefromdefect

thatwouldposesafetyriskstothetenantsorpropertyowners.Theseresponsibilitiesare,and

shouldbe,delineatedinwrittenagreementsbetweenthesolarcompanyandtheproperty

owner.Furthermore,thesolarcontractorshouldprovideemployeeswithappropriateworker

safetytrainingandhaveappropriateliabilityandworkerscompensationinsuranceintheevent

ofanaccident.

Withregardstotheongoingoperationsofthesolarsystems,theoperationofthe

equipmentisgenerallytheresponsibilityoftheownerofthesolarenergysystem.Accordingly,

ifthesolarenergysystemisownedbyathird-partyowner,theresponsibilityforensuringthat

thesystem’soperationsissafeandposesnorisktothetenantslieswiththethirdpartyowner.

Inthisregard,thethird-partyownershouldbeexpectedtohaveappropriateliabilityand

propertyinsurance.

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XIII. Conclusion.

AB693presentsanunprecedentedopportunityforCaliforniatodelivera

comprehensiveandintegratedenergystrategythatmateriallyadvancesCalifornia’senergy

policiesandgoalsacrossamarketsegmentthatisoftenunderservedbyexistingenergy

programs.ThroughthestructureandelementspresentedintheJointProposal,theCPUCcan

realizethetwingoalstheLegislatureclearlycommunicatedinpassingAB693:tohelplow-

incomehouseholdsresidinginaffordablemultifamilyhousingrealizesavingsontheirelectric

bills,savingsthatcouldmeannothavingtochoosebetweenheatandfoodonthetable,while

alsofurtheringthestate’sgreenhousegasreductiongoals.

TheJointProposalaccomplishesthetwingoalsofAB693bydevelopingincentive

structuresthatdirectlybenefitlow-incometenantswhileadequatelyincentivizingbuilding

ownerstoparticipate,creatingeffectiveenergyefficiencyrequirements,andreducingpeak

demandwithsolarplusstorage.TheJointProposalalsoprovidesaframeworkforachieving

morerobustjobplacementrequirementstoachievelong-termandgoodpayingjobsfor

residentsoflow-incomeanddisadvantagedcommunitiesandtargetsdisadvantagedworkers

andcommunitiesmostinneedofeconomicdevelopmentopportunities.Theprogramdesign

alsocreatesamoreequitablesolutionforprojectdistributionbyeliminatingthefirst-come,

first-serveapproachunderMASHandproposescriteriaforachievingequitableinvestmentsin

low-incomeanddisadvantagedcommunities.Mostimportantly,theJointProposal

recommendsthattheCommissionengageasinglethird-partystatewideprogramadministrator

toachievegreaterefficiency,consistency,andmoretargetedoutreachtothecomplicatedand

significantlyunderservedaffordablehousingmarketsegment.

IndevelopingtheJointProposal,themembersoftheNonprofitSolarStakeholder

Coalitionandourconstituentshavebeenstronglyinfluencedbyadesirenottoreplicatepast

failuresorignoreopportunitiestoleveragesuccesses.Wehave,intheend,soughttoarticulate

98

aframeworkcapableofaddressingthelong-termenergyneedsofourstate’smostvulnerable

householdsandcommunitiesconsistentwiththemandatesofAB693.

TheJointPartiesurgetheCommissiontoadopttheprogramdesignpresentedinthe

JointProposaltoensurethatlow-incomerentersandthecommunitiestheyresideinhave

accesstoafullrangeofsolutionsthattheirenergyfuturedependson.

Respectfullysubmittedthis3rddayofAugust2016,SanFranciscoCalifornia.

By: /s/WayneW.Waite

WayneW.Waite,PolicyDirector

CaliforniaHousingPartnership

/s/EddieH.Ahn

EddieH.Ahn,ExecutiveDirector

BrightlineDefenseProject

/s/ShanaLazerow

ShanaLazerow,AttorneyforCEJA

CommunitiesforaBetterEnvironment

/s/TovahTrimming

TovahTrimming,AttorneyforCEJA

EnvironmentalLaw&JusticeClinic

GoldenGateUniversitySchoolofLaw

/s/PeterMiller

PeterMiller,SeniorScientistforNational

ResourceDefenseCouncil

/s/JimGrow

JimGrow,AttorneyforNationalHousingLaw

Project

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Rulemaking14-07-002

PROPOSALFORTHEIMPLEMENTATIONOFAB693

APPENDICES

NonprofitSolarCoalition

JointSubmission

August3,2016

APPENDICES

A. AB693BriefingMaterials

B. ListofEligibleLIHTCProperties

C. ListofHUD-AssistedProperties

D. SolarPVCostsEstimates

E. AB693IncentiveStructure–BackupAnalysis

F. CPUCAnalysisofAB693

G. EnergyStorageLegalAnalysis