Menendez bill would give residential solar users more certainty
As more Texans look to solar energy to power their homes and businesses as a way to save money and reduce greenhouse gas emissions, Texas Sen. Jose Menendez is working to win passage of a bill that would provide standards for the industry in the state.
CSSB 2066, sponsored by the San Antonio Democrat, aims to give residential and small commercial customers in many parts of Texas standards they can rely on when considering the use of distributed generation. A steady uptick in the number of small businesses and homeowners switching to solar is improving affordability for residents, reducing operating costs for businesses, and creating local jobs. There are now over 50,000 Texas residents and businesses using distributed solar energy. And over 9,600 people are employed in the solar industry in Texas.
All of this is good news and the average solar customer has a positive experience and is happy to be paying less for electricity while doing something reduce air pollution, improve public health and address climate change. But, the lack of statewide standards has led to frustration and bad practices in some cases. This bill would start the process of standardizing what should be included in a solar lease, and where and how customers have a right to utilize distributed solar energy.
To learn more about this important legislation that Public Citizen supports, read our full testimony, below.
To the members of the Senate Committee on Business and Commerce.
Via hand delivery.
April 16, 2019
Re: CSSB 2066 (Menendez) – Relating to on-site distributed generation and energy storage
resources.
Supporting testimony of Public Citizen.
Dear Chairman Hancock and members of the committee:
Public Citizen appreciates the opportunity to support the committee substitute for Senate Bill 2066. We recommend reinstating language from SECTION 6 of the bill as filed to protect customers from unfair utility rates, fees and practices.
What the bill does.
This bill would set standards that residential and small commercial customers in many parts of Texas can rely on when considering the use of distributed generation. A growing number of Texas residents and businesses are utilizing distributed solar energy systems to reduce their electric bills. This is improving affordability for residents, reducing operating costs for businesses, and creating local jobs. There are now over 50,000 Texas residents and businesses using distributed solar energy. And over 9,600 people are employed in the solar industry in Texas. All of this is good news and the average solar customer has a positive experience and is happy to be paying less for electricity while doing something reduce air pollution, improve public health and address climate change.
But, the lack of statewide standards has led to frustration and bad practices in some cases. This bill would start the process of standardizing what should be included in a solar lease, and where and how customers have a right to utilize distributed solar energy.
The bill is properly limited to renewable energy.
We support the change in the committee substitute to utilize the existing definition of “distributed renewable generation” found in Section 39.916(a)(1) of the Utilities Code. We had concerns about the safety and environmental risks of including distributed fossil fuel generators in this legislation. This fix addresses those concerns.
Standards for solar leases established.
Solar leases are a common tool that can allow certain customers to access distributed solar energy systems who may not otherwise be able to do so. They are especially helpful for nonprofits and other customers who don’t have tax liability, as a way to access the benefits of the federal solar investment tax credit. They are also attractive for customers who don’t want to be responsible for maintenance.
While they can be beneficial, they are also often quite complicated and customers can sometimes find themselves trapped in a bad agreement that wasn’t what they expected. Every industry, including solar, has good actors and bad. Most companies that offer solar leases already comply with the provisions proposed in SECTION 1 of this bill. This short list of requirements establishes standards to protect the customer that all companies offering solar leases must abide by. In addition to information about equipment, costs, maintenance and warranties, terms regarding the transfer of the lease to a future property owner would be clearly stated in writing.
Municipal regulation of distributed solar.
In most Texas towns and cities, residents and business are able to install distributed solar energy systems on their property. As with any electrical work, a permit and inspection may be required. That represents a fair and smart balance between allowing property owners to benefit from this valuable resource and protecting the city and other residents and businesses from harm.
In the past, some homeowners associations would ban or severely restrict distributed solar installations, but the Texas Legislature acted in 2011 and 2015 to set standards for how HOAs can regulate solar energy systems. SECTION 4 of this clarifies the inspection and interconnection process that an HOA can impose on a property owner. SECTION 2 applies some of the same standards set for HOAs to municipalities.
Don’t remove standards for utility interconnection and rates for customers with solar.
SECTION 6 of SB 2066 as filed added Utilities Code Sec. 39.1015, which would have set minimum standards for how investor owned utilities should treat customers wishing to utilize distributed generation and energy storage. Numerous studies have shown that distributed solar energy provides greater financial benefit than is accounted for even through full net metering. Texas is one of only 5 states that have no net metering requirement, and this language would not have changed that. It would only have prohibited investor owned utilities from unfairly punishing customers who wish to use solar and or energy storage at their homes and businesses. Utilities would be required to provide timely interconnection of distributed generation and would not be allowed to charge customers punitive rates simply because they chose to utilize distributed generation or energy storage. These are important and needed protections, as some utilities have already proposed and others enacted punitive rates and fees for such customers.
We recommend restoring from the original SECTION 6 of the bill Utilities Code Sec. 39.1015(c)-(j), with the following slightly edited version of subsection (f). This language will ensure that utilities can use fairly calculated tariffs:
(f) Except for a charge to recover a cost described by Subsection (e) or an electric utility’s interconnection fee applicable to the original installation of a customer’s on-site distributed generation or energy storage resource, an electric utility may not impose a higher rate or charge on a residential or small commercial customer utilizing on-site distributed generation or energy storage resources. Any specific tariffs for residential or small commercial customer utilizing on-site distributed generation or energy storage resources must be calculated so as to fairly compensate customers for the full value of the energy services they provide.
We support CSSB 2066.
We encourage this committee reinstate the language from SECTION 6 of the original bill adding Utilities Code Sec. 39.1015(c)-(j), with the edits described above, and then pass CSSB 2066 favorably out of committee.
Thank you for the opportunity to provide this testimony, if you would like to discuss our position further, I can be reached by email at ashelley@citizen.org or by phone at 512-477-1155.
Respectfully,
Adrian Shelley, Texas Office Director
Public Citizen
CC: Sen. Robert Nichols, Sen. Donna Campbell, Sen. Brandon Creighton, Sen. José Menéndez, Sen. Angela Paxton, Sen. Charles Schwertner, Sen. John Whitmire, Sen. Judith Zaffirini