A combination of reduced revenues and increased demand for discounted rates could force the Turlock Irrigation District to bear the brunt of solar grant costs in coming years, according to a report delivered Tuesday.
The district’s Public Benefits Program, funded by a 2.85 percent surcharge attached to every customer’s bill as required by state law, is legislated to fund energy efficiency efforts and low-income rate assistance.
The district’s CARES and Medical Discount Rate assistance programs are projected to draw $2.3 million from the $4.8 million in Public Benefit Program coffers this year. While that’s just $284,000 more than a year ago, the program has more than doubled in costs since 2005 when the entire effort cost TID just $994,607.
As TID is required to spend funds on energy efficiency and low-income assistance first, solar grant and energy efficiency research and development programs could be pushed out of Public Benefits in the years to come.
“With revenues dropping and low-income assistance rising…” TID Board of Directors Chairman Rob Santos said.
“It’s going to get more and more squeezed,” said Nancy Folly, TID consumer programs division manager.
Solar grants are only an eligible Public Benefit expense if the district can demonstrate they do not result in reduced spending in energy efficiency or low-income programs. According to Folly, many utilities can’t fund their solar programs through Public Benefits.
The TID’s Solar Rebate Program has been a resounding success since its implementation, committing $6.5 million to fund 111 residential systems and 13 non-residential systems, generating a combined 2.2 megawatts of electricity. A further 152 systems, generating 924 kilowatts at a cost of $2 million, are pending installation.
At the same time demand for rate assistance programs is rising and revenues are falling, the California Energy Commission is pushing the district to spend more on energy efficiency efforts, such as weatherization, installation of low-voltage lights, and Energy Star appliance discounts.
“They see it as the more you spend in it, the more you’ll achieve,” Folly said.
The district has actually increased their energy efficiency programs over the years, but has seen fewer takers as the economy has dipped. TID recently performed energy efficiency evaluations for several large companies, demonstrating changes which would pay off in as little as three and a half years, but the businesses didn’t want to wait that long for a return on an investment. To meet standards, some utilities have taken on the entire cost for energy efficiency upgrades, rather than rebating a portion as TID does.
In their drive for higher energy efficiency standards, the CEC is suggesting that all utilities set a goal of reducing 1 percent of load each year. TID’s goal is currently just .65 percent of load and, due to some last-minute project delays, the district does not look to hit that goal for 2010.
“Up until just a couple weeks ago, we felt confident we were going to hit that goal, but a lot of projects were pushed back to the new year,” Folly said.
Next year, however, the district expects to be back on track in hitting their energy efficiency goal. But an existing $500 Residential HVAC Rebate program doesn’t look to be a part of that energy efficiency plan, as both it and a federal $1,500 rebate are set to expire on Dec. 31. If the federal tax credit is extended, the TID rebate will likely be extended as well, Folly said.
The CEC is also considering implementing a harsher program to verify energy efficiency gains, which could draw a fixed percentage of Public Benefit funds and further reduce funding to actually implement programs.
In an effort to save some Public Benefits Program dollars – and abandon a project which not all TID board members supported – a previously approved $225,000 plan to install 10 Ice Bear systems in Turlock will not proceed.
Directors were concerned the Ice Bear units, which use cheap energy at night to make ice that is then used to cool buildings when energy costs and system load are high during the day, wouldn’t result in much true savings when approved in May. The district had hoped to install them prior to last summer, but after hang-ups in finalizing a contract pushed construction back to winter 2011, at the earliest, the directors had enough with the plan.
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