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

Global Warming & Low Income Customers 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 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

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

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 CalEnviroScreen

Program Alternatives & Demographics Customers on CARE Rate Customers with Low Income Customers in Disadvantaged Communities Three 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 Categories overlap but not identical Maximum Income for 3 Person Household

Problems with Climate Solutions 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 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

Challenge: Income & Net Metering 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 CARE Rate in person household upper limit: $39,580 Average income of net metering customers = $91,210 per year

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

Problems with Climate Solutions 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

New Programs 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 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 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

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