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AB 327—a look at renewable energy in Los Angeles County, California

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AB 327—a look at renewable energy in Los Angeles County, California

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Content AB 327—A Look At Renewable Energy in Los
Angeles County, California

A Thesis Project by USC Anneberg Specialized Journalism Graduate Student
Marla Schevker

2
Table of Contents:

Article………………………..…………………………………………………………………….3-12
Electricity Explained……….……………………………….…….………………….……………..13
Legislation Explained…..…………………………………………………………………………..14

Note: This project was intended to be viewed as a website and is located at
http://marla.schevker.com/marla/USC_Thesis/index.html

3

Eli Shamszadeh is saving up for solar panels.
“I have the perfect roof for it,” he said. “No matter where the sun is, my roof always has sun on it.”
A homeowner in Silver Lake, Shamszadeh has already made his house as energy efficient as he currently can. His
upgrades include light-emitting diode (LED) and compact fluorescent lamp (CFL) light bulbs and energy-efficient
appliances, but he wants to do more. His goal is to purchase solar panels for his home outright over the next few years.
“There are enough people out there…not caring,” Shamszadeh said. “It’s the only thing I can think to do for even
balancing out the things I do myself. (Plus) there is the bottom line: I would be spending less if I didn’t waste water and use
less energy.”
Consumers like Shamszadeh are not the only ones looking to create a more energy-efficient California. Thanks to
legislation passed in October 2013, now utility companies have to care too.
Assembly Bill 327 is a bill related entirely to energy creation and consumption throughout the state. The bill, authored by
Assembly-member Henry Perea (D-Fresno) includes residential rate reforms (including a new fixed fee for all consumers),
an extension of net metering (which is a way that utility companies keep track of energy usage in areas with solar panels)
and a reaffirmation of minimum procurement requirement of renewable energy for power providers in the state. Renewable
energy is energy created from solar, wind, small hydroelectric plants, biomass and waste and geothermal plants.
Nonrenewable energy comes from natural gas, nuclear power plants, large hydroelectric plants and coal.
The California Public Utilities Commission (CPUC) currently requires all retail service providers (any company that sells
power to consumers) to meet 33 percent of their retail sales energy with renewable energy by the year 2020. This is known
as the Renewable Portfolio Standard (RPS) requirements.
As it stands, the RPS requirements are:
• 20 percent renewable energy by Dec. 31, 2013
• 25 percent renewable energy by Dec. 31, 2016
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• 33 percent renewable energy by Dec. 31, 2020
AB 327 is applicable to the entire state. Los Angeles has two retail service providers: Southern California Edison (SCE)
and Los Angeles Department of Water and Power (LADWP), who are both required to meet the minimum standard.
Southern California Edison and Los Angeles Department of Water and Power have both already met the 20 percent RPS
requirement but nonetheless they must increase their renewable energy procurement by 13 percent in seven years.
SCE is confident it can reach the 33 percent goal by 2020. LADWP is still conducting studies and performing analysis to
conclude the best way to integrate renewable energy into its grid for consumers. Yet environmental groups and some State
Legislators are concerned that certain aspects of the bill (especially the fixed fee) will discourage people from investing in
rooftop solar or other efficiency measures and set back consumer efficiency due to cost.

Southern California Edison
SCE, a publicly traded utility, purchases most of the power it provides to its consumers from third-party generators. SCE
does not receive any money from the sale of power. The rates are set by how much the power costs SCE to buy and is
regulated by the CPUC.
Robert Laffoon-Villegas, SCE media relations, said the rate structure encourages SCE to support consumer conservation,
because money is not made off of how much electricity a consumer uses.
“We buy (power) on the open market through long term contracts and we pass that to the consumers at cost and get
money through infrastructure,” he said.
SCE intends to meet the RPS requirements by changing its purchasing methods.
“We always try to get the right mix but there are several considerations that we try (to take into account) whenever we’re
purchasing power,” Laffoon-Villegas said. “Part of it is we’re trying to get to that 33 percent. Also, we are tasked with doing it
in the best interest of the customers; balancing affordability while trying to make the system the most efficient and effective
that (we) can.”
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Currently, SCE has one large hydroelectric power plant in the mountains called Big Creek. While large hydroelectric
power plants don’t count in the RPS, Laffoon-Villegas said the power plant produces a significant amount of power that is
cleaner than other types of energy.
“Most of the time with power production, people are looking at a 50-year life span, but Big Creek is over 100 years old,”
he said. “Obviously water levels and drought issues have an impact but it’s a tremendous asset. While it doesn’t count
towards the (RPS) goal, it helps to make the overall amount of power we provide greener with low emissions.”
SCE purchases power from a variety of sources, including wind power from wind farms in Tehachapi, CA. and solar
power from the Arizona and Nevada borders. Laffoon-Villegas said SCE feels confident in its ability to reach the 33 percent
by 2020 goal.
“We think we’re well on our way,” he said. “It’s just a matter of continuing what we’ve been doing. We’ve been making
improvements on the grid over time and are continuing with large infrastructure improvement to develop the grid that will
allow us to accept more renewables. That (will make) it easier to incorporate things like rooftop solar, smaller solar or wind
installations. So we feel pretty confident the mix is in the market place and through the current mechanisms we have for
purchasing power we can get there and still maintain safe, reliable and affordable energy.”

Los Angeles Department of Water and Power
LADWP, a municipal owned utility, has some purchase power agreements, but almost all of its energy is generated from
facilities under LADWP ownership and operation.
“Our key generation comes from the four in-basin gas fired power plants,” said LADWP Media Representative Kim
Hughes. “We get coal fired power from Navajo and Intermountain Power Plant. We get nuclear power from Palo Verde
Power Plant and we also get hydropower, as well as our renewables.”
LADWP has been upgrading its plant turbines in an effort to move off of coal and rely more on in-basin gas fired power
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plants. In addition to reducing its greenhouse gases below the 1990 levels, LADWP is investing in renewable energy with a
mix of generation, including wind, solar and geothermal.
LADWP has been receiving energy from the Milford I and II wind projects, which are responsible for providing
approximately 2.6 percent of LADWP’s total energy sales. Additionally, the company commissioned its first 11.6 megawatt
DC solar power plant in July 2012 known as the Adelanto Solar Power Project. The Adelanto Solar Power Project made use
of existing LADWP land and was tied directly to an existing electrical switching station.
The LADWP has published an integrated resource plan (IRP), which outlines their strategy for achieving the 33 percent
RPS.
According to the IRP, “the integration of renewable energy into the grid poses major challenges. Because renewable
resources like wind and solar produce electricity variably and intermittently (i.e., only when the wind is blowing or when the
sun is shining), integration of these resources requires that controllable generators are online to smooth significant and often
rapid changes to energy production.”
To combat this, the LADWP has come up with stabilizing solutions, known as “regulation,” to ensure consistent and
reliable energy. For regulation, LADWP uses natural gas-fired combustion turbines and hydroelectric resources.
Another concern the LADWP has is in storage of renewable energy. There are some days when the generation is higher
than the demand and the challenge for the company is how to store the energy while maintain a reliable system.
“Multiple solutions will need to be employed including: curtailment of renewable resources, increased use of pumped
hydroelectric energy storage, customer demand response incentives, and sales of excess energy,” the IRP said. “These
solutions will drive up the incremental cost of these renewable resources especially as more renewable resources are added
beyond the generation system’s basic load requirements. Advanced energy storage technologies, such as batteries and
compressed air energy storage, offer alternative energy storage solutions to help shift these resources to peak demand
hours where these resources can provide greater benefit in meeting peak load that occurs in the late afternoon, early
evening.”
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The advanced energy storage technologies are still in development. In the meantime, improved operations at the Castaic
pumped hydroelectric facility, located in west Castaic Lake just north of Los Angeles County, serves as the primary energy
storage solution to help alleviate the over-generation problems.
The LADWP will continue working to integrate more renewable energy, particularly local solar.
“LADWP is currently conducting studies to determine the maximum levels of intermittent energy resources that can be
integrated reliably on both the transmission and distribution systems in order to identify the investments necessary to
maintain power grid reliability and minimize occurrences of over-generation. In particular, additional studies will be necessary
to determine the impact of incorporating high levels of local distributed solar on the distribution grid and to determine what
future measures would be required,” the IRP said.
However, since the impact of incorporating more intermittent energy resources is not yet known, consensus from
stakeholders and further analysis is required before a commitment to higher levels can be made.

How does the government keep track?
The California Energy Commission (CEC) and CPUC keep track of retail power sellers RPS through annual reports. Each
company shares their power mix through power content labels.
According to CEC Associate Energy Specialist Kevin Chou, the program began in 1997 and required retail electricity
suppliers to provide procurement data to the commission. Power Content Labels share both the company’s power mix (how
much of each type of power they provide to consumers) but also how it compares to California’s total system. Power. Power
Content Labels are supposed to be made available to both consumers and the public.
“Essentially what we want to do is we want to show easy and simple to understand information that shows what a utility
resource mix is,” Chou said. “We do this so we can educate end users exactly what resources their electricity is coming from.
I believe we want to be able to be as transparent as possible.”
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While each company is required to provide their power mix, some companies have high amounts of what is known as
unspecified power. This is usually power that comes from a power pool.
“If you have a pool of electricity where so many facilities are transferring energy into it, there is really no way to say that
this portion came from a wind facility and this portion came from solar,” Chou said. “There is no way to say if it’s renewable
or nonrenewable. (But the retail seller providers) probably have very small loads of electricity that they are serving so it
would be in their best favor to get their energy from a pool.”
It is unclear from the language in AB 327 whether these companies that receive high amounts of unspecified energy from
power pools are required to comply with the RPS. The CPUC, which implements the legislation, would not return calls for
clarification.
Companies who do not comply with AB 327 have the option to apply for a waiver if certain circumstances are met,
including: inadequate transmission capacity (or the amount of power that can be sent over a line) and insufficient supply of
eligible renewable energy resources.
According to the bill, those who don’t comply with AB 327 are subject to public utilities code 2113, which states that they
are “punishable by the commission for contempt in the same manner and to the same extent as contempt is punished by
courts of record.” The CPUC also did not return calls for clarification on possible ramifications for not complying with the RPS
requirements.

Who opposes AB 327?
Environment groups and State Legislators are among those who actively opposed AB 327. Many felt it was a bad bill
because of the fixed fee of $10 imposed on all residential consumers, or $5 for the low income participants of the California
Alternate Rates Energy (CARE) program.
“We had independent analysis (conducted) and it showed that a $5-10 fixed charge would have a substantial impact
on consumer choice about investing in rooftop solar and common sense efficiency measures,” Sierra Club California Director
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Kathryn Phillips said. “If you add $10 to (every) bill, that means no matter what you do, you can’t substantially reduce your
bill.”
Phillips said she believed this provision would impact low-income consumers the most and become a disincentive to
investing in efficiency measures.
“The utilities were arguing that they needed that $10 fixed charge to ensure that their infrastructure was serving
everybody for now and in the future,” she said. “The problem with that argument is there is already at the CPUC a regular
rate setting procedure and in that rate setting procedure, the cost to maintain the infrastructure is incorporated.”
Just because the Sierra Club opposed AB 327 does not mean they don’t support renewable energy in California.
“We want to see a transition to more and more renewables, particularly local renewables,” Phillips said. “Our feeling
was that (AB 327) overall discouraged any kind of investment and any kind of return or substantial return especially for low
income folks on investment and efficiency measures or rooftop solar.”
The Sierra Club opposed the bill in conjunction with California Environmental Justice Alliance (CEJA). CEJA fliers
stated the organization would support a minimum bill over a fixed rate.
“A minimum bill can allow the utility to get revenue from each customer without deflating the value of solar or
conservation,” written documentation stated. “Minimum bills are already in place for all utilities, but they should be reformed
to buy a basic volume of service usage for the customer, rather than paying for static infrastructure through a fixed charge.
An independent analysis showed that a $10 a monthly fixed charge on utility customers’ bills slashes rooftop solar
installation by 42 percent and reduces energy efficiency investment by 37 percent.”
Although AB 327 was passed by a majority in both the California Senate and California Assembly, there were several
legislators who voted against the bill. This included 37
th
district representative Assemblymember Das Williams who strongly
opposed the residential rate reform.
“The CPUC now has the authority to create a new electricity rate structure in order to reduce rate inequities,”
Representative Hillary Blackerby said. “His concern was that his constituents would ultimately be penalized based on (their)
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geography, living on the coast and using less electricity. Given this, he wanted to see a provision that would have allowed
his constituents the option of utilizing demand-response technologies to manage their consumption of energy instead of
paying higher rates because of their usage. Das wanted to create the ability for a customer to opt-out of paying higher rates
in lieu of utilizing these technologies which wasn’t something the utilities were interested in.”

So what can consumers do?
“Consumer choice is the key to this whole thing,” said Laffoon-Villegas. “You have options as a customer that you’ve
never had in the past.”
Laffoon-Villegas recommends that people upgrade their homes as best as they can given their financial situation,
including installing solar panels, using electricity efficient appliances, using LED lighting and purchasing hybrid/electric
vehicles.
“I always say it’s the energy you never use that’s the best,” he said. “Whenever I speak to a consumer group, I always tell
them a little investment in yourself will pay off in terms of energy savings money wise but you can always feel good about the
choices you make while not going through any deprivation.”
SCE offers tools through their website for customers that allow them to track their energy consumption by date and time.
“The ability for the consumer to determine their use and to control and manage their energy consumption is the key not
only for them to save money but to help the system overall,” Laffoon-Villegas said.
Both the SCE and LADWP offer programs for consumers that will enable them to get all renewable energy for their home.
Additionally, LADWP offers a variety of programs to incentivize homeowners to increase their renewable energy usage and
decrease their power usage. These programs include a home energy improvement program, refrigerator exchange program
and refrigerator recycling program.

What consumers are actually doing?
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Many homeowners throughout Los Angeles County are doing what they feel is best to make their homes as energy
efficient as possible.
Jonathan Reilly, who has lived in his home in Reseda for 14 years, installed many energy efficient upgrades as a way to
make his home more environmentally friendly and to save money, including solar panels and high-energy efficient windows.
“I don’t like wasting things so I feel that up front cost to minimize cost later is perfectly reasonable,” he said. “It saves me
money and it’s less wasteful.”
Reilly said that he is saving $0.5 per kilowatt-hour, his bill going from $220 in the summer and $140 in the winter to
between $80 and $100 in the summer and $30 in the winter.
Michael Mooradian, principal at Ecobility. Ecobility is a consulting firm that focuses on environmental issues, most often
around the time that a property is purchased. The company will go through and inspect a property to ensure that it is safe
from environmental dangers including contaminated ground water and volatile vapor issues. Mooradian specializes in
hydraulics and water resources and but is also an expert in environmental health.
Mooradian has worked both personally and professionally to help commercial properties and his own residence become
more environmentally friendly.
“I’m a pragmatic person, that we have an economy that needs to continue to run and there are ways to develop solutions
to environmental issues that everybody can win,” he said.
Mooradian has lived in his home in Palos Verdes for the last 13 years. While he is currently looking to install an energy
efficient heater and air conditioner (as his home has neither AC or heat at the moment), he said that he is “not sold yet” on
solar panels for his roof.
“My wife is an architect and has installed solar on a number of places and the return on the investment is still not there,”
Mooradian said. “The expected life on solar panels has been touted on 10-20 years but most of them don’t last past seven
and that’s a big investment to do that.”
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While Mooradian is working to create an environmentally efficient house without using solar panels, Ariella Fiore is
currently exploring leasing options for installing solar panels on the roof of her home for 16 years in Van Nuys.
“I have what I like to refer to as Eco OCD, I’m super paranoid about environmental sustainability,” Fiore said. “We don’t
even use disposable silverware or cups or plates or anything like that even when we’re hosting a big party, it’s something
that has always been important to me. Taking care of the Earth is an important thing for me.”
Fiore said that her and her husband have interviewed one solar company regarding leasing solar panels and are looking
to make a decision in the next year. Fiore said they are considering leasing solar panels because it is more affordable.
“It ends up being no money out of pocket for us to get them installed,” she said. “They own them and they get to sell the
power back to the utility company, we pay a little bit less a month for our energy costs but we never have to pay for the solar
panels ourselves nor do we have to pay anything out of pocket but then we still get to have the benefit of helping the earth
by helping solar.”
Richard Foss, homeowner in Manhattan Beach for 23 years, decided a year ago he wanted solar panels and four months
later they were installed.
“The way that we do things here is not sustainable,” Foss said. “We’re currently, in environmental terms, running at 100
miles an hour towards a brick wall. You’ve got to at least try to step on the breaks and it is a personal decision. The thing
about it is that I haven’t done much of anything that isn’t pure common sense, pure if you’re thinking about what you’re doing,
you’ll do this. This is not, I don’t have anything that I’ve done here that is particularly innovative, it’s all available to any
homeowner. I couldn’t help but think that it's the right thing to do and how can you think it’s the right thing to do and not do it.”

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Electricity Explained:

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Legislation Explained:

Abstract (if available)

Abstract AB 327 was passed in the California State Assembly in October of 2013. This affected not only the way that investor‐owned utility companies but also consumers who are interested in or have already invested in solar or other electricity efficiency efforts. ❧ This project looks at the way that AB 327 affects consumers and power companies, who supported it and who is against it and what consumers are doing to make their homes more environmentally friendly. ❧ Please note this project is intended to be viewed on the web and can be seen at https://marla.schevker.com/marla/USC_Thesis/index.html.

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Asset Metadata

Creator Schevker, Marla (author)

Core Title AB 327—a look at renewable energy in Los Angeles County, California

School Annenberg School for Communication

Degree Master of Arts

Degree Program Specialized Journalism

Publication Date 07/15/2014

Defense Date 07/15/2014

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag AB 327,California,efficiency,Electricity,Los Angeles,OAI-PMH Harvest,renewable

Format application/pdf (imt)

Language English

Contributor Electronically uploaded by the author (provenance)

Advisor Chinn, Dana (committee chair), Hollihan, Thomas (committee member), Kahn, Gabriel (committee member)

Creator Email marla.schevker@gmail.com

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c3-441149

Unique identifier UC11287164

Identifier etd-SchevkerMa-2692.pdf (filename),usctheses-c3-441149 (legacy record id)

Legacy Identifier etd-SchevkerMa-2692.pdf

Dmrecord 441149

Document Type Thesis

Format application/pdf (imt)

Rights Schevker, Marla

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the a...

Repository Name University of Southern California Digital Library

Repository Location USC Digital Library, University of Southern California, University Park Campus MC 2810, 3434 South Grand Avenue, 2nd Floor, Los Angeles, California 90089-2810, USA