Climate Problems & Climate Solutions for Low Income Customers and Disadvantaged Communities

1. . Climate Problems & Climate Solutions for Low Income Customers and Disadvantaged Communities Presentation to Low Income Oversight Board by Robert Freehling February 23, 2016

2. Problems of Global Warming Climate—Higher temperatures, More extreme weather events Resources—Water, Food, Energy, Environmental Services Public Health & Safety—Fire, Flood, Pollution, Disease Global Warming & Low Income Customers

3. Electric Utility System Problems Increased Demand-- for Air Conditioning Lower Efficiency– A/C, Power Plants (NG, Solar, Wind), Vehicles, Grid Wires More Natural Gas Plants—over 20,000 MW new in California since 2000, local reliability, back up variable renewables = More Air Pollution, Higher Bills & Price Risk, Reduced Energy Security, Greater Environmental & EJ Burden Global Warming & Low Income Customers

4. Disadvantaged Communities • Face Cumulative Challenges • Low Income • High Unemployment • High Pollution • Health Problems • Identified by Cal EPA EJ Screening  Climate Change: Demographic Problems

5. CalEnviroScreen Climate Change: Demographic Problems “’effect modifiers’…can increase health risk…from 3-fold to 10-fold or greater, depending on the combination of pollutants and underlying susceptibilities. ~California Environmental Protection Agency

6. Three Categories overlap but not identical Program Alternatives & Demographics Customers on CARE Rate Customers in Disadvantaged Communities Customers with Low Income

7. Maximum Income for 3 Person Household Categories overlap but not identical Program Alternatives & Demographics Customers on “CARE Rate” < $40,180/yr Customers with HUD “Low Income” < $84,500 SF Co < $41,700 Kern Co

8. Cap & Trade—Local polluting sources continue Rates—Increasing utility costs, Complex rate structures, Increased risk Energy Conversion—Access to electrification of transportation & domestic natural gas Clean Energy—Developed in other geographic locations, remote for large scale, disproportionally higher income for DERs Problems with Climate Solutions

9. California Solar Initiative CA Climate Plan—3000 MW Rooftop Solar; SB 1 Investment—$3.5 Billion Program; ~$12 Billion Customers Low Income—SASH & MASH, 45 MW, $200 Million Program; (<10% of CSI Funds; only ~3% of MW) Net Meter—Low rate for CARE & low usage tiers Problems with Climate Solutions

10. Challenge: Income & Net Metering Average income of net metering customers = $91,210 per year CARE Rate in 20153-person household upper limit: $39,580 Average income of net metering customers is 68% higher than California average, 34% greater than IOU service territories’ average. California Net Energy Metering Ratepayer Impacts Evaluation, California Public Utilities Commission, October 2013, p. 113.

11. Challenge: Income & Net Metering Lowest incomes under-represented in Net Metering by factor of ~2 to 3 California Net Energy Metering Ratepayer Impacts Evaluation, CPUC, October 2013, Appendix E, Income Analysis, Advent Consulting Associates, p. E-15. Highest incomes over-represented in Net Metering by factor of ~2 to 3

12. Solar Barriers Cost—Residential Solar Costs ~$25,000 Credit—Lease requires credit score of 650 Tax Subsidy—30% federal ITC requires sufficient taxable income Net Meter Rules—Limit siting & bill credit options Problems with Climate Solutions

13. Solar Solutions SASH & MASH II—Additional $100 M; 50 MW Shared Renewables (SB 43, Wolk)—includes 100 MW located in disadvantaged communities Net Meter 2.0 (AB 327, Perata)—Requires alternatives for residential customers in disadvantaged communities Multifamily Solar (AB 693, Eggman)—300 MW goal for low income residential & disadvantaged communities; 10% IOU C&T funding w/max $100 M/year for 10 years New Programs

14. Program Needs SASH & MASH II—Program already running out of funds Shared Renewables (SB 43, Wolk)—Program provides no funding; strict rules against cost shifting; may need funding Net Meter 2.0 (AB 327, Perata)—Defining options in CPUC Phase II; Virtual NEM, Other?; may need more funding Multifamily Solar (AB 693, Eggman)—Counts toward NEM 2.0; work out design & benefit allocation New Programs

15. Opportunities Program Integration—Coordinate DERs, solar, DR, EE, smart grid, local reliability, public safety Funding Options—Cap & Trade, environment penalties, SGIP, IOU Procurement (EE, RPS, DR, Storage), public goods $$ Strategies to Lower Cost—Scale deployment, storage w/solar, etc. Community Coordination—Low income & EJ groups, IOUs, CPUC, local government New Programs

16. Extra Slides