CA residents: AB 1139 discussion

[h2ofun]

Yeah, my rep in the 16th district (Bauer-Kahan) abstained from voting on when this, and naturally her office has no comment about what AB-1139.

I think the problem is Bauer-Kahan has her own AB-427 which is meant to increase the adoption of batteries and distributed storage in California. And since policymakers have to literally go through Lorena Gonzalez to get through appropriations, Bauer-Kahan can't piss off Gonzalez by voting against her "screw NEM" bill.

But the irony is that what Bauer-Kahan wants under AB-427 is literally impossible if AB-1139 passes since 427 involves batteries that have to be charged by the solar that Gonzalez wants to kneecap.

Ugh. I guess AB-1139 is going through for a 3rd "reading" today. It's still BS that the appropriation's chair can fast track her own bills through, while letting other bills languish if she just wants to obstruct. Why is the appropriations chair also allowed to also author bills?

Why do they not call this bill what it is, class warfare?

 

[holeydonut]

Why do they not call this bill what it is, class warfare?

I guess if there was actually a centralized coalition that would come out against this bill, we may see some push to get AB-1139 labeled much differently than what it is so far in committee.

The Utilities have their huge PAC's and lobbying arms. I don't think the state-wide solar companies have much invested as a centralized lobbying arm to push back so far (or if they have, then they've been very unsuccessful).

Tesla (well mostly Elon) is probably in the best position to draw attention to this. One tweet from Elon may be as effective as a bunch of ad spending by the SEAC or CALSSA members. But instead Tesla is just installing solar at cutthroat rates trying to earn market share while the other guys are busying monkeying with the state and PoCos. Tesla has scaled back a ton and isn't even publishing commentary to the CPUC around current NEM 3.0 rules being discussed under CPUC proceeding R1407002 and A1607015.

At least Sunrun, Sunpower, Semper, and some other solar companies have been throwing their two cents into the NEM 3.0 convo to try and move the policy to be somewhat useful for future residential solar customers. Elon and Tesla are eerily quiet on NEM and California legislation that would harm residential solar/ESS.

 

[cali8484]

Elon and Tesla are eerily quiet on NEM and California legislation that would harm residential solar/ESS.

I was wondering about that too. I am wondering if the real reason behind the push against residential solar is that the state has changed its renewable energy strategy and now wants to push more utility scale installations instead of residential installations. In such scenario, Tesla may even be supportive of the bill. Just sell more Powerpacks/Megapacks instead of Powerwalls and not deal with the residential customer support burden.

 

[holeydonut]

I was wondering about that too. I am wondering if the real reason behind the push against residential solar is that the state has changed its renewable energy strategy and now wants to push more utility scale installations instead of residential installations. In such scenario, Tesla may even be supportive of the bill. Just sell more Powerpacks/Megapacks instead of Powerwalls and not deal with the residential customer support burden.

Yeah, you're onto something. Elon always purports to be a man of the people; trying to push consumer-friendly solutions where other big mega corps fear to tread. But then his companies pocket immensely off of government tax breaks, energy credits, incentives, and other things. So he gets the positive press as some B2C wizard, but makes bank on B2B and B2G stuff. Then he obfuscates and distracts with Doge tweets.

It does explain why when it comes to California energy, he'd rather stay out of it completely than try to take a consumer friendly stance. Since what is friendly to you and me is not going to make the government and utility dollars flow into Tesla's bank accounts.

 

[cali8484]

Yeah, you're onto something. Elon always purports to be a man of the people; trying to push consumer-friendly solutions where other big mega corps fear to tread. But then his companies pocket immensely off of government tax breaks, energy credits, incentives, and other things. So he gets the positive press as some B2C wizard, but makes bank on B2B and B2G stuff. Then he obfuscates and distracts with Doge tweets.

It does explain why when it comes to California energy, he'd rather stay out of it completely than try to take a consumer friendly stance. Since what is friendly to you and me is not going to make the government and utility dollars flow into Tesla's bank accounts.

Tesla's residential energy business is a small part of Tesla and a money loser with lots of issues (e.g. solar roof) so I can see it being easy for Tesla to decide cut its losses and focus on something else. Frankly, Tesla has made more profits from Bitcoin with a lot less grief. I can see the tweet "Sorry no more residential solar but more bitcoins now the miners agreed to use Powerpacks. It's not personal just business".

 

[holeydonut]

Some good news, AB 1139 was amended to change the language around early termination of NEM 1.0 and 2.0.

(ii) A residential eligible customer-generator who owns or is a tenant of the owner of the renewable electrical generation facility shall be permitted to continue to take service under the prior tariff for up to 20 years from the date that customer first received net energy metering. For these purposes, a renewable electrical generation facility is not owned if it is subject to a lease or electricity purchase agreement.

So it seems people who bought their solar will be able to keep the original 20 year grandfathering. But people who did leases or PPA could get the short end.

 

[h2ofun]

Some good news, AB 1139 was amended to change the language around early termination of NEM 1.0 and 2.0.

(ii) A residential eligible customer-generator who owns or is a tenant of the owner of the renewable electrical generation facility shall be permitted to continue to take service under the prior tariff for up to 20 years from the date that customer first received net energy metering. For these purposes, a renewable electrical generation facility is not owned if it is subject to a lease or electricity purchase agreement.

So it seems people who bought their solar will be able to keep the original 20 year grandfathering. But people who did leases or PPA could get the short end.

Says Lease gets 10 years

 

[h2ofun]

Some good news, AB 1139 was amended to change the language around early termination of NEM 1.0 and 2.0.

(ii) A residential eligible customer-generator who owns or is a tenant of the owner of the renewable electrical generation facility shall be permitted to continue to take service under the prior tariff for up to 20 years from the date that customer first received net energy metering. For these purposes, a renewable electrical generation facility is not owned if it is subject to a lease or electricity purchase agreement.

So it seems people who bought their solar will be able to keep the original 20 year grandfathering. But people who did leases or PPA could get the short end.

Whats the status in the bill about a monthly charge per KW of solar?

 

[holeydonut]

Says Lease gets 10 years

Yeah, I'm upon thinking more about this proposal (instead of doing actual work for my job) ... customers on existing PPA and solar leases should fine over their lease even with the new language. Their monthly payments should be fixed for each kWh they produce per their existing contracts. The implied cost variance when AB 1139 kicks in shouldn't be passed to their monthly lease payment. Edit: I guess Sunrun, Vivint, SolarCity, etc could go back and rip up contracts to really mess things up... but I don't see that outcome happening.

I think, AB 1139 will significantly harm the companies who issued the leases and PPA agreements. I think a fundamental belief of the solar lease or PPA financing structure is that it assumes the solar lease is a positive cash flow asset for the life of the asset. But AB 1139 literally wipes out the back end residual for an investor of the solar lease since the investor is on the hook for the dramatic cost increase after the proposed 10 year mark.

For example, Sunrun bundles its solar leases and PPA for securitization. Presumably all large solar companies have to do this in order to get cash to then front future PPAs.

Sunrun Prices Securitization of Residential Solar & Battery Systems

Transaction achieves record low spread to benchmark rates, inception-to-date SAN FRANCISCO, March 10, 2021 (GLOBE NEWSWIRE) -- Sunrun…...

investors.sunrun.com

Their WAL is 6.3 years on this deal, which implies the leases are around 14 years to full maturity since it's unlikely many people are pre-paying these things. But if AB 1139 goes through, then having a stake in the underlying solar systems becomes a liability at the 10 year mark.

After 10 years of the lease date, suddenly the NEM goes away and energy exported to the grid is priced at the "electrical corporation’s avoided cost as determined by the avoided cost calculator (ACC) most recently adopted by the commission."

As you'd expect the CPUC has buried their ACC in the deeeeeeeep bowels of whatever database they're making things "public" with. The freaking ACC is a 76 MB spreadsheet that is so effing detailed that it borderlines on the absurd. But here's their forecasted mWh hourly rate for the year 2030. For reference the sum of bars on the period ending the 13th hour (which presumably is noon to 1pm) is a whopping $21 per mWh. So the credit for ALL EXPORT in that hour (not just the excess annual NEM true up) is $0.021 per kWh.

I hope homeowners on a lease or PPA will keep paying their $0.20 per kWh (plus 3% annual inflation) into the lease no matter what. But the companies on the back end that have to true up the NEM are going to have monster bills that will drive the residual of their financing structure deep into the red. Good thing Tesla and SolarCity got out of the Lease and PPA game.

 

[miimura]

I hope homeowners on a lease or PPA will keep paying their $0.20 per kWh (plus 3% annual inflation) into the lease no matter what. But the companies on the back end that have to true up the NEM are going to have monster bills that will drive the residual of their financing structure deep into the red. Good thing Tesla and SolarCity got out of the Lease and PPA game.

I could be wrong, but I think you have a fundamental misunderstanding about the financial relationships between the utility, homeowner, and solar company. The financing structure of the PPA securitization is completely unaffected by NEM changes.

When a homeowner gets a solar system from a solar company that is subject to a PPA, they are agreeing to pay a certain amount for every kWh that the system produces. Their utility bill never enters into the figures between the homeowner and the PPA administrator. The homeowner is taking on the risk of what the utility will bill them for their usage, while simultaneously agreeing to pay the PPA administrator for what the solar produces. The homeowner necessarily needs to consider whether the PPA is a good deal compared to their estimation of avoided costs from the utility.

This is why politicians pulling the rug out from under solar equipped ratepayers is fundamentally unfair. Nobody was questioning the veracity of the 20 year guarantee in the NEM tariffs when they decided to get solar, whether by purchase, lease, or PPA. I think trade organizations and ratepayer advocacy groups need to carefully consider who needs to be sued to overturn this NEM retraction if it does pass.

 

[holeydonut]

I could be wrong, but I think you have a fundamental misunderstanding about the financial relationships between the utility, homeowner, and solar company. The financing structure of the PPA securitization is completely unaffected by NEM changes.

When a homeowner gets a solar system from a solar company that is subject to a PPA, they are agreeing to pay a certain amount for every kWh that the system produces. Their utility bill never enters into the figures between the homeowner and the PPA administrator. The homeowner is taking on the risk of what the utility will bill them for their usage, while simultaneously agreeing to pay the PPA administrator for what the solar produces. The homeowner necessarily needs to consider whether the PPA is a good deal compared to their estimation of avoided costs from the utility.

This is why politicians pulling the rug out from under solar equipped ratepayers is fundamentally unfair. Nobody was questioning the veracity of the 20 year guarantee in the NEM tariffs when they decided to get solar, whether by purchase, lease, or PPA. I think trade organizations and ratepayer advocacy groups need to carefully consider who needs to be sued to overturn this NEM retraction if it does pass.

Hmm, I don't have a lease or PPA and I'm going off of the reams of sales collateral I got when I was researching solar last year. Plus all those stupid TV ads I see for solar.

So a customer who gets a PPA isn't actually locking in their energy rates? These things are always advertised as a fixed payment schedule; which to me suggests the true-up aspect only matters for energy in excess of what was produced. The homeowner that produces less energy than they consumed would have to pay the retail rates for the extra consumed energy from PG&E, and the homeowner that over produces what they consumed gets the tiny wholesale generation credit.

But what you're saying implies the homeowner who does a PPA is a real putz; because they get 100% exposure to rates and it's actually the PPA owner who collects a constant cash flow regardless of what BS the PoCo does. If this is the case, then I'm going out on a limb to say that this PPA advertising is deceptive, false, and way misleading because it suckers in a bunch of people who think they're locking in rates.

Edit: Check out this link. Power Purchase Agreement (PPA)
The first three bullets imply the homeowner is "locked in" on what they would pay for the guaranteed energy produced by the system each year. Like, there would need to be a big monster * asterisk that says: "Not really locked in... you are on the hook for the annual true up on the energy you produced and used since you really aren't locked in anything. We're just saying locked in to trick putz's that don't actually read their agreement".

Which brings me to what the heck AB 1139 is trying to do. Could they end up harming the thousands of homeowners on PPAs? This would mean AB 1139 literally harms many of the disadvantaged people that Gonzalez purports to want to help. A lot of lower income people get pushed to PPA because they simply cannot afford the large cash up front costs of going solar. They were basically swapping their energy bill from paying PG&E with paying the PPA.

With the latest language, rich people who could do a large cash solar purchase get to keep their 20 year grandfathering, and it'd be putz PPA homeowners that see their generation credit shrink to $0.02 per kWh so the PPA homeowner gets a monster true up bill.

 

[Redhill_qik]

,and it'd be putz PPA homeowners that see their generation credit shrink to $0.02 per kWh so the PPA homeowner gets a monster true up bill.

Can anyone comment on how this would impact someone with Community Choice Aggregator (CCA)?

The big CA IOUs are paying that measly wholesale generation rate that appears to be heading to NEM 3.0, but CCAs are a lot more generous for the generation rate that is usually twice that amount or in the case of SVCE 100% what they charge for generation which is 3-4x.

That might drive more customers to CCA that opted out initially or encourage more local communities to form CCAs.

 

[miimura]

Can anyone comment on how this would impact someone with Community Choice Aggregator (CCA)?

The big CA IOUs are paying that measly wholesale generation rate that appears to be heading to NEM 3.0, but CCAs are a lot more generous for the generation rate that is usually twice that amount or in the case of SVCE 100% what they charge for generation which is 3-4x.

That might drive more customers to CCA that opted out initially or encourage more local communities to form CCAs.

If the NEM tariff changes, it's kind of up in the air how the CCA will handle that. I suppose it would be specified in the NEM Tariff.

I suppose the worst likely case is that the utility transmission and distribution charges never go negative (no credit for feed-in) while the CCA continues to count all net flows for the generation charges.

The thing that really bugs me is that the recent incremental rate changes have all had increases in T&D charges and reductions in Generation charges. PG&E is clearly stacking the deck in their favor in the face of increasing CCA uptake. Don't even get me started on the never ending PCIA fee.

 

[getakey]

Was there any change to the $10/KW connection fee in the latest amendment? That is a hefty charge

 

[power.saver]

AB 1139 was moved to the inactive file by the author.

 

[Redhill_qik]

AB 1139 was moved to the inactive file by the author.

Looks like it failed with 27 Ayes, 27 Noes and 25 No votes. The bill notes that there was a motion by Carillo to reconsider, but no indication of the outcome. Did that fail also?
https://leginfo.legislature.ca.gov/faces/billHistoryClient.xhtml?bill_id=202120220AB1139

 

[power.saver]

Looks like it failed with 27 Ayes, 27 Noes and 25 No votes. The bill notes that there was a motion by Carillo to reconsider, but no indication of the outcome. Did that fail also?
https://leginfo.legislature.ca.gov/faces/billHistoryClient.xhtml?bill_id=202120220AB1139

No reconsideration. The author requested it be moved to the Inactive File. She didn't have the votes necessary for it to pass.

 

[Southpasfan]

No reconsideration. The author requested it be moved to the Inactive File. She didn't have the votes necessary for it to pass.

Ok, well that's good.

Now, we need to focus on ESS. I did not run the numbers exactly, but for the cost of the low income subsidies, they could subsidize all of those people getting a Powerwall or two.

Then, it essentially means that low income consumers are always consuming at the cheapest possible rate.

It allows solar only homeowners to conceptually (when residential solar gets popular enough) send all that energy to batteries which not only benefit low income consumers but actually reduce peak grid demand.

This would work for the same reason that residential solar and PWs work. Large scale mega-packs "don't work" if, and only if, they are compared to the cost in dollars of a peaker plant without considering the environmental cost.

Personal PWs work for residential consumers, and they "work" better the more the utility tries to charge for peak TOU.

 

[Redhill_qik]

Ok, well that's good.

Now, we need to focus on ESS. I did not run the numbers exactly, but for the cost of the low income subsidies, they could subsidize all of those people getting a Powerwall or two.

Then, it essentially means that low income consumers are always consuming at the cheapest possible rate.

It allows solar only homeowners to conceptually (when residential solar gets popular enough) send all that energy to batteries which not only benefit low income consumers but actually reduce peak grid demand.

This would work for the same reason that residential solar and PWs work. Large scale mega-packs "don't work" if, and only if, they are compared to the cost in dollars of a peaker plant without considering the environmental cost.

Personal PWs work for residential consumers, and they "work" better the more the utility tries to charge for peak TOU.

How exactly do PWs "work" for residential customers?

They can be a life saver in a power outage, but the cost will not be recovered through price arbitrage over the 10 year warranty time.

Looking at the current EV2A vs E-TOU-C tariffs and assuming that a Powerwall would be cycled daily to 10% (12.15 kWh) and at 100% efficiency and charged at the lowest rate the cost for a year versus E-TOU-C only at the Peak and without the baseline credit, so the unbelievable worst case, the breakeven would be at 12 years. The real world would be more pessimistic.

	kWh/day	Summer Days	Summer $/kWh	Cost	Winter Days	Winter $/kWh	Cost	Total
EV2	12.15​	122​	0.18366​	$ 272.24​	243​	0.18366​	$ 542.25​	$ 814.49​
E-TOU-C	12.15​	122​	0.41813​	$ 619.79​	243​	0.32104​	$ 947.85​	$1,567.65
							Difference	$ 753.16​
							Breakeven years @ $9,000	11.95​

 

[getakey]

How exactly do PWs "work" for residential customers?

They can be a life saver in a power outage, but the cost will not be recovered through price arbitrage over the 10 year warranty time.

Looking at the current EV2A vs E-TOU-C tariffs and assuming that a Powerwall would be cycled daily to 10% (12.15 kWh) and at 100% efficiency and charged at the lowest rate the cost for a year versus E-TOU-C only at the Peak and without the baseline credit, so the unbelievable worst case, the breakeven would be at 12 years. The real world would be more pessimistic.

	kWh/day	Summer Days	Summer $/kWh	Cost	Winter Days	Winter $/kWh	Cost	Total
EV2	12.15​	122​	0.18366​	$ 272.24​	243​	0.18366​	$ 542.25​	$ 814.49​
E-TOU-C	12.15​	122​	0.41813​	$ 619.79​	243​	0.32104​	$ 947.85​	$1,567.65
							Difference	$ 753.16​
							Breakeven years @ $9,000	11.95​

did you include Tax Credit?