Riverside County took a big step Tuesday toward ordering the Imperial Irrigation District to bring back a popular rooftop solar program known as net metering, although the county’s legal strategy is likely to be challenged in court.
In a 4-0 vote, county supervisors approved an ordinance from Supervisor V. Manuel Perez that would require IID to offer net metering in unincorporated parts of Riverside County, including Bermuda Dunes, Mecca, Thermal and Thousand Palms. The solar measure is based on a section of the California Water Code that says water districts that sell electricity outside of their water service boundaries can be regulated by cities and counties in those outside areas. IID provides water and electricity in Imperial County, and is also the electric utility for 95,000 homes and businesses in the Coachella Valley.
Of those 95,000 IID customers, roughly 10,000 are in unincorporated parts of Riverside County. But city officials in Coachella, Indio and La Quinta could follow the county’s lead.
Steve Sanchez, a La Quinta city councilmember who also serves on IID’s energy advisory committee, said the county’s action “paves the way for cities to pass something similar.” Sanchez said his support for net metering goes “hand in hand” with his support for Coachella Valley representation on IID’s board of directors. Only Imperial County residents in IID’s water service territory can vote in board elections, a situation that often creates tension between IID board members, who are elected to serve Imperial County, and the Coachella Valley, where more than 60 percent of IID’s energy customers live.
“East valley residents have no voting say, and therefore a move like this by the county supervisors really helps give cities and the residents and the businesses of the area a voice to take back their energy representation here in the desert,” Sanchez said.
Riverside County supervisors still need to vote on the solar measure again at an upcoming meeting before it takes effect. But if and when the ordinance is approved a second time as required, IID is likely to challenge it in court.
Before Tuesday’s vote, Bob Smith, an attorney working for IID, urged the supervisors not to sign off. He read from the California Public Utilities Code, which says electric utilities are “not obligated to provide net energy metering” after a reaching a certain numerical threshold, a condition IID says it met in early 2016.
“This is not a close question legally,” Smith said.
Smith also referred to Vincent Battaglia, founder of Palm Desert-based solar installer Renova Energy, who worked with the county supervisors to develop the ordinance.
“Think what would happen if it were adopted, and a court a year or two from now says it’s illegal. It means that all the customers that in good faith bought solar panels from Mr. Battaglia now would be left with thousands of dollars of investment and no net energy metering,” Smith said.
Battaglia rejected that argument, saying he won’t encourage anyone to go solar until all legal challenges are resolved.
“No one should buy a system based on this news,” he said after Tuesday’s vote. “There are installers out there who will say, ‘Now that (IID is offering) net metering, just sign here.’ And that’s not what we want.”
Battaglia also said his company, Renova Energy, has agreed to indemnify Riverside County and defend the solar measure in court if IID sues. At Tuesday’s board meeting, county counsel Gregory Priamos deferred the questions about the legality of the ordinance to Battaglia’s attorney, Ryan Baron from Best Best & Krieger.
Under net metering, solar-powered homes and business that send more electricity onto the grid than they consume are able to zero out their monthly energy bills. If they consume more from the grid than they contribute during a given month, they only have to pay for the difference at the retail electricity rate, which for IID customers is quite low. It’s a good deal for homes and businesses that choose to go solar, but critics see it as a transfer of wealth from people who can’t afford solar panels to people who can, since non-solar homes could be forced to shoulder more of the costs of maintaining the grid.
IID abruptly closed its net metering program to new applicants in early 2016, with board members arguing that low-income Imperial Valley residents shouldn’t have to subsidize solar systems for wealthier Coachella Valley residents. The move sparked a fierce battle between the public utility and rooftop solar proponents, including Renova Energy’s Battaglia. More than 1,000 homes and businesses that had already decided to go solar were left in limbo for months, unsure whether the tens of thousands of dollars they had agreed to spend on rooftop solar panels would turn out to be a good investment.
Under intense political pressure, IID ultimately agreed to let most of those stranded customers sign up for net metering. But the agency’s board of directors didn’t reopen the solar program, instead replacing it with a less generous compensation system dubbed “net billing.” Under net billing, solar customers are charged the retail rate for all the electricity they take from the grid, then credited at a far lower rate for the electricity they send back. The rate at which they’re credited is designed to drop over time.
Some IID customers are still going solar, although not as many as before the utility ended net metering. In a presentation last month, IID staffer Marc Printy told the board of directors that residential customers installed about 4,100 kilowatts of rooftop solar in 2017, down from 10,550 kilowatts in 2016 and 7,150 the year before that. Commercial solar installations were also down, from 4,650 and 6,950 kilowatts in 2015 and 2016 to less than 4,500 in 2017. Several factors may have contributed to those declines.
“The reports I’m getting back for 2018 are even lower than 2017,” Printy said.
Battaglia has spent two-plus years campaigning for IID to bring back net metering. He’s put up billboards and paid for TV and radio ads criticizing the utility, at times working through a nonprofit he founded, the Electric Ratepayers Alliance. He brought the net metering issue to Riverside County’s attention, originally working with Supervisor John Benoit, who died in late 2016, to craft an ordinance that would bring back the solar program. Benoit’s successor, V. Manuel Perez, wrote the measure that passed Tuesday.
Battaglia also sparred with IID officials over possible conflicts of interest at the public agency. After The Desert Sun reported on financial relationships linking IID board members or their immediate family with the consulting firm ZGlobal Inc., Battaglia asked California’s Fair Political Practices Commission to investigate whether the agency had violated the state’s conflict-of-interest law. He also copied the FBI on a letter to IID. The public agency responded, in part, by paying private investigators to scrutinize Battaglia, in a move IID general manager Kevin Kelley later described as “opposition research.”
At the same time, the fight over net metering is bigger than IID and Renova.
The California Municipal Utilities Association — whose 61 member agencies provide electricity to about 1 million people — sent a letter to the Riverside County supervisors opposing the solar measure. The organization’s executive director, Barry Moline, said in the letter that the proposed ordinance would interfere with the fiduciary responsibility of a publicly owned utility to serve its customers. He said the Riverside County measure would “benefit for-profit solar companies as well as individuals who can afford solar,” rather than the low-income customers IID was trying to help by ending net metering.
“That’s not a good local policy,” Moline wrote.
The Southern California Public Power Authority — whose dozen member agencies include the cities of Los Angeles and Riverside, as well as IID — also sent a letter opposing the solar measure. The group’s executive director, Michael Webster, wrote that the proposed ordinance “would set a dangerous public policy precedent.”
“While we appreciate the County’s goal to afford residents an opportunity to join (net metering) programs we believe the proposed ordinance would weaken fundamental community choice preferences for those areas served by publicly-owned utilities,” he wrote.
Sammy Roth writes about energy and the environment for The Desert Sun. He can be reached at email@example.com, (760) 778-4622 and @Sammy_Roth.
Popular rooftop solar program could return to Coachella Valley after getting axed by IID, by Sammy Roth, Desert Sun, June 26, 2018.