Governor Newsom recently signed Assembly Bill (“AB”) 2316 into law, which could expand access to clean energy across the state, particularly for low-income communities. AB 2316 requires the California Public Utilities Commission (“CPUC”) to evaluate existing customer renewable energy subscription programs (Green Access Programs) which were utilities with over 100,000 customers were required to create under the Green Tariff Shared Renewables Program, implemented in 2015.

Per AB 2316, the CPUC must evaluate those existing programs to determine if they meet specified goals, and authorize the termination or modification of programs that don’t meet the goals. The CPUC must also determine whether it would be beneficial to ratepayers to establish a new tariff or program or modify an existing tariff or program administered by an electrical corporation, to establish a community renewable energy program (“CREP”). The specified criteria under which existing programs are being evaluated include whether they:

• Efficiently serve distinct customer groups;
• Minimize duplicative offerings; and
• Promote robust participation by low-income customers.

As part of its evaluation of existing programs, the CPUC must consider energy load migration trends among bundled and nonbundled customers and any associated risks with maintaining or creating a customer renewable energy subscription program.

In an Assigned Commissioner’s Scoping Memo and Ruling issued on December 2, 2022, the CPUC indicated it would be relying upon the three large investor-owned utilities (Pacific Gas and Electric, San Diego Gas and Electric, and Southern California Edison) – all of whom recently applied to the CPUC for review of their Green Access Programs – to evaluate their own programs based on the AB 2316 criteria. The IOUs must then provide proposals for revised and new programs by January 20, 2023.

According to the Legislature, AB 2316 is meant to create a “community renewable energy program” so that all Californians, especially those unable to host a rooftop solar system, can realize the benefits of distributed generation through a cost-effective program that provides benefits to all ratepayers.

If the CPUC determines that it would be beneficial to ratepayers to establish the CREP, the agency must establish the program by July 1, 2024 and require each electrical corporation to participate in the program (Community Choice Aggregators and Electricity Service Providers will have more flexibility/choice in whether or not to participate in the program).

If the Community Renewable Energy Program is established by the CPUC, AB 2316 requires the program to:

• Be complementary to and consistent with the California Building Standards Code;
• At least 51% of its capacity must serve low-income customers defined as those who qualify for the California Alternate Rates for Energy or Family Electric Rate Assistance (FERA) programs, CalFresh, SNAP, the Low-income Heating Energy Assistance Program, and those who live in “underserved communities.” Underserved communities are defined as:
  • Census tracts with median household incomes at or below 80 percent of the statewide median income or with median household incomes at or below the threshold designated as low income by the Department of Housing and Community Development’s standards;
  • A community within an area identified as among the 25% most disadvantaged areas in the state according to CalEnviroScreen;
  • Communities located on lands belonging to a CA Native American tribe.

The CREP must also:

• Minimize impacts to nonparticipating customers;
• Require that the construction of CREP facilities comply with prevailing wage requirements;
• Provide bill credits to subscribers based on the avoided costs of the program’s facilities;
• Prioritize the maximum use of state and federal incentives and accelerate its implementation to ensure that time- or quantity-limited federal incentives can be obtained.
• Community renewable energy facilities participating in the CREP must be eligible for an enhanced federal investment tax credit available as a qualified low-income economic benefit project pursuant to subsection (e) of Section 48 of Title 26 of the United States Code.

The Net Energy Metering program will not be included in the upcoming evaluation of existing customer renewable energy subscription programs. The CPUC will be required to report to the Legislature by March 31, 2024 about its evaluation of existing customer renewable energy subscription programs and whether or not it has decided to create the CREP. Assuming the CREP is created, the CPUC must report to the Legislature within two years about facilities deployed and customers subscribed to the program – then annually thereafter.

For more information, please contact Andy Brown.