Collateral damage?
IID customers may face rate hike if Riverside County ordinance survives legal challenge
EL CENTRO — If Riverside County gets its way, Imperial Irrigation District customers in Imperial County may have to pay, said Marion Champion, IID media communications officer.
At issue is Ordinance No. 943, which was formally adopted by the Riverside County Board of Supervisors by unanimous consent during its regular meeting on July 17.
The ordinance has the “potential to impact rates across the board,” Champion said over the phone Monday.
As written, the law will go into effect in 30 days after passage, according to Riverside County documents. Then, another 90 days after that, IID would be required by law to offer a net-energy metering program that expands upon AB 920.
AB 920, signed by former Gov. Arnold Schwarzenegger on Oct. 11, 2009, required California utilities to compensate customers with rooftop solar panels for extra energy generated until rooftop solar reached 5 percent of the utility’s peak demand, according to the California Public Utilities Commission.
IID has filed a civil lawsuit against the Riverside County Board of Supervisors in regard to the ordinance. The lawsuit, dated July 13, was filed at Superior Court of California, County of Riverside, by Emily L. Brough of the San Francisco law firm Zacks, Freedman & Patterson, PC, which is representing IID. A hearing date has yet to be determined.
The civil document seeks unspecified monetary remedies and a declaration of injunctive relief against the Riverside County Board of Supervisors in relation to the ordinance, according to court documents obtained by Imperial Valley Press.
“We, of course filed that litigation, and one of the first things we asked for was that the court put in a stay so that while it is looking at the issue we have some breathing room” to assess how compliance would be achieved, and at what cost to rate-payers, Champion said.
Net-energy metering
Net-energy metering is a program designed to benefit customers who generate their own electricity using solar, wind, biogas fuel cell or a hybrid of these technologies, according to the IID website. The program uses a bi-directional meter to track the “net” difference between the amount of electricity a customer has produced and the amount of electricity consumed during each billing period.
The program was mandated by AB 920, which obligates California utilities to make net-energy metering available to eligible customer-generators on a first-come-first-served basis, according to IID documents. IID determined its obligation to be 50.2 megawatts based upon a peak of 1004 megawatts in 2010, and that level was reached in early 2016.
In July 2016, the IID Board of Directors made a policy decision to change its net-metering program “to ensure that everyone pays their fair share for their use of the energy grid,” according to IID documents, “including customers who choose to install rooftop solar systems on their homes.”
The new net billing program aligned prices with the “actual cost” of providing power for IID customers, according to IID documents, which was “a necessary solution that balances the interests of every customer IID serves in order to continue to deliver on our obligation to providing the greatest value at the lowest cost.”
IID officials contend that Ordinance No. 943 is unnecessary because its existing program already surpasses state obligations and currently provides a similar solar tariff and net energy billing to customers who install residential solar systems. To date, IID customers have installed approximately 5,000 solar systems totaling more than 68 megawatts, according to a press release.
Ordinance No. 943 would require IID to expand its net-metering program to unincorporated parts of Riverside County, including Bermuda Dunes, Mecca, Thermal and Thousand Palms, based on language in AB 464, as amended on March 14, 2017, that states “territory that is outside the boundaries of an irrigation district, but is currently receiving electrical services from the irrigation district” may be regulated by counties and cities.
Riverside County officials contend this is case for IID, which is headquartered in Imperial Valley but sells electricity to Coachella Valley residents.
In addition to billing credits for net energy exported to the electric grid, the ordinance would exempt participating customer-generators from standby charges, departing load charge and costs associated with interconnection application fees, studies and distribution upgrades, according to Riverside County documents.
Such losses in revenue, coupled with the cost of installing new infrastructure to serve customers in unincorporated areas, may lead to a rate hike not only for IID customers in Riverside County who benefit from the new ordinance, but also for customers in Imperial County who would see no benefit.
“[It] really wouldn’t be legal for us to try to have a separate rate class for just the unincorporated areas of Riverside County” that benefit from the ordinance, Champion said. “We would not be able to charge a certain rate for customers in one area of our service territory at a different rate to customers in another area of our service territory. That is a mandate that comes from our state. We are not allowed to do that.
“In a sense,” Champion continued, “that is what this ordinance is trying to do. It is trying to force us to have a separate rate classification, a separate solar tariff to a certain area of our service territory, and that is illegal. We can’t do that.”
At this point it’s too soon to estimate how big a rate hike might be, Champion said. “We are looking at the impact of it. We are very hopeful that the courts will look at the arguments that we are putting forth and really look at the issues here and realize that this would be an unfair impact to all of our customers if we are forced to do this. … We don’t have specific numbers yet.”
Southern California Edison, which provides the majority of electrical services for residents in Riverside County, already provides a net-energy metering program in other unincorporated communities to which it provides services, according to Riverside County documents.
The purpose of the ordinance is to “ensure that residents in the unincorporated areas served by IID have the same opportunities to join a net-energy metering program as residents in the unincorporated areas that are served by SCE,” the summary of Ordinance No. 943 states.
A disadvantage
Ordinance No. 943 places IID, a publicly owned utility district, at a disadvantage to Southern California Edison, a much larger privately owned company that can more easily absorb the cost of such an expanded net-energy metering program, Champion said.
“We are a non-profit [entity],” she said. “We don’t have shareholders, so when you start talking about increasing or decreasing rates on one side … we can’t just cut profits” to make that affordable.
“Anything that we make is put back into the system and helps with reliability. We don’t have investors. We don’t have profits where we can just cut the profit margins.”
When asked for comment about how the ordinance would impact SCE, company staffers referred IVP to their net-energy metering program website.
Indirect support of Ordinance No. 943?
Ordinance No. 943 was drafted by Supervisor Victor Manuel Perez, who has received a campaign contribution from SCE in his bid for election as District 4 supervisor.
Perez was appointed by Gov. Edmund G. Brown Jr. on May 9, 2017, to the Riverside County Board of Supervisors. He succeeded the late John J. Benoit, who died in 2016 of pancreatic cancer, in representing Riverside County’s Fourth District.
The Fourth District includes the eastern two-thirds of Riverside County, stretching from Palm Springs and Desert Hot Springs, south to the Salton Sea and east to Blythe and the Colorado River.
According to a California Form 497 Contribution Report obtained by Imperial Valley Press, SCE contributed a total of $1,500 to Perez’s campaign on July 11.
SCE corporate communications did not respond to a request for comment asking if the campaign contribution was in any way connected to Ordinance No. 943 before press time Monday.
Perez also did not respond to a request for comment about the ordinance, or the campaign contribution from SCE Monday. His staffers said he is currently out of the country and difficult to reach for comment.
Topic of discussion
During its regular meeting at 1 p.m. Wednesday, the IID Board of Supervisors are slated to discuss developments stemming from Ordinance NO. 943, as well as the pending litigation.
The meeting will convene at the William R. Condit Auditorium, 1285 Broadway St., in El Centro. It is open to the public.