CEEE’s Statement on Clean Energy Equity
Statement for Energy Equity
On October 31, 2021, twenty-five thousand delegates from 200 countries from across our planet gathered in Glasgow, Scotland, to discuss the immediate and long-term solution to the climate crisis. The conference promised some positive results such as new pledges on methane gas pollution, deforestation, and coal financing, as well as completion of long-awaited rules on carbon trading and a notable U.S.-China deal.
However, climate activists lamented the lack of discussion about social equity. Calfin Lafkenche, a Mapuche (Araucanía/Chile) organizer with the Minga movement, an indigenous solidarity network, proclaimed,
“The results of this (COP26) are not a surprise, but they represent the state of the governments and their feelings, which are completely at odds with wider civil society demanding concrete actions and urgent measure.”[1]
This skepticism was echoed by climate activists Greta Thunberg who has consistently called for nations to move beyond “the blah, blah, blah” as she admonished the world to focus on local solutions, free of the rhetoric of international conferences.
“A reminder: the people in power don’t need conferences, treaties or agreements to start taking real climate action. They can start today. When enough people come together then change will come and we can achieve almost anything. So instead of looking for hope — start creating it.” Greta Thunberg [2]
It is clear to CEEE leadership that climate change and the systemic inequity it reveals are existential realities that need urgent solutions. What is less clear is the road map to a societal construct where net-zero (climate justice) also means environmental justice and social equity.
As a test of this challenge, we need to look no further than the battle currently being fought at California’s Public Utilities Commission (PUC) over the NEM 3.0. From the CEEE’s perspective, the final outcome of the NEM 3.0 proceedings will lay the groundwork for what approach California will take in transforming our energy grid while at the same time testing our dedication to progressive public policy rooted in an approach that maximizes climate justice, economic equity, and community-centered energy transformation.
As it stands, the CPUC’s NEM 3.0 Preliminary Decision completely fails on several fronts and is nothing more than an insider deal to mollify monopoly IOU profit interests. The CPUC’s NEM 3.0 PD:
ENVIRONMENTAL JUSTICE: Significantly slows California’s transition from fossil fuels to a sustainable Green energy economy. This affects the ability of EJ communities to create grid resiliency thus exacerbating the affects of climate change, which disproportionally affect EJ communities.
ENVIRONMENTAL JUSTICE: Significantly slowing California’s Green transition also significantly slows CA’s ability to decommission Peaker plants, which are located disproportionally in EJ communities.
CLIMATE JUSTICE: Creates a solar tax. The NEM 3.0 PD creates the highest tax on solar consumers in the nation. This punitive and regressive action punishes consumers for transitioning to Green energy.
EQUITY: By decimating the onsite solar market among working and middle class the NEM 3.0 PD not only locks in inequities but will drive the solar market back to the bad old days when only the rich can afford rooftop solar.
EQUITY: The proposed Market Transition Credit incentive is not enough to offset the gutting of the bill credit, so solar becomes more expensive, not less, for low-income consumers and those living in the state’s most polluted neighborhoods.
EQUITY: The NEM 3.0 PD completely ignores consumer education and protection without a functional and well-funded consumer outreach the enrollment into the program will not be substantial enough to improve inequity.
Why an Energy Equity Statement?
The Coalition for Environmental Equity and Economics (CEEE) was formed to be a collective voice for climate, environmental, and social justice (ESJ) communities in California. Our mission is to provide a perspective based on our experience being a part of, and working with, frontline populations from across the spectrum of California’s urban, rural, and suburban communities who meet certain criteria, including CalEnviroScreen 4.0, AB 617, Community Air Initiatives, SB 535 disadvantaged communities map, and the Public Utilities Commission (PUC)’s Environmental and Social Justice (ESJ) Action Plan.
This CEEE Energy Equity Policy Statement seeks to provide a path for California policy makers to take substantive climate action while at the same time addressing the critical issues of social equity. Our proposals are based on adapting distributed energy resources and community-centered policy that will lead to the transformation of our state’s electrical grid in a manner that provides clean and affordable energy to all of California.
Later this month, the California Public Utilities Commission (PUC) will issue a proposed ruling on the future of Net Metering (NEM 3.0) in California. NEM is the state regulation that fairly compensates rooftop solar users for the excess power they provide to their local power grid.
California’s investor-owned utilities (IOUs) monopoly asserts that California’s growing rooftop solar market is creating an economic disparity — or so-called cost shift — between affluent rooftop solar consumers and low-income non-solar customers.[1] The IOUs clearly understand that equity is a central issue among community organizations that care about a resilient and equitable energy transition.
Dr. Shalanda Baker, Deputy Director for Energy Justice at the U.S. Department of Energy, provides this insight into the IOUs cost shift assertions:
“Equity provides a thematic backdrop for the NEM debate, but the solutions that utilities and other industry players typically offer in response to fairness concerns fit within a narrow band of possibility that avoids a deeper reckoning of the aspects of the energy system that are themselves inherently unjust.”[2]
CEEE believes that the inequity of our current energy system is the actual result of ESJ communities being nested within an extractive economic system. This extractive system has given rise to systemic racial and social inequity such as systems of unworkable credit criteria, historical redlining, and limited employment opportunities–all leading to an inequitable housing system that predates the solar industry yet created structural barriers to solar adoption.
Today, we see the IOUs’ centralized energy model and their political domination of our state’s policy-making bodies, further barring our communities from the benefits of clean energy technologies and programs. Californians are left to pay the highest prices in the country for outdated and inefficient grid infrastructure. It is no surprise that California’s antiquated grid is responsible for deadly wildfires and increased utility shutoffs that put our most vulnerable populations at risk.
We need an energy transmission system that can deliver clean energy reliably and sustainably at affordable prices. To achieve this, we must address the political domination of the state’s IOUs[1] and begin the transformation to a sustainable, renewable, equitable, resilient energy future rooted in a decentralized energy model. That decentralized model will help address vital changes in ESJ communities and low-income communities that are vitally necessary to improve social outcomes in those communities by:
Achieving environmental, economic, and social justice
Fostering economic development and careers through investment in local distributed clean energy resources
Promoting community-owned energy resilience
Bringing energy decision making back into the hands of residents and ratepayers
Leading the world in efforts to address climate change
CEEE believes that Net Energy Metering (NEM) is a critical tool in empowering ESJ communities to build resilience in the face of climate change and to lower the day-to-day energy bills that burden frontline communities. However, due to the intersectional impacts of redlining, California’s inequitable energy policies, and the ongoing extractive profit model of monopoly utilities, ESJ, and other low-income communities continue to experience structural barriers in accessing and benefiting from NEM.
We believe that the millions of residents in our communities should and can benefit from the transition to a clean energy economy. This investment will empower frontline communities to make decisions about the kind of energy resources and energy programs they can access as we all navigate our precarious climate future.
Expand Solar Incentives
Here are the CEEE’s Recommendations to Increase Energy Equity:
Prioritize protections and incentives for the following communities, as collectively covered by CalEnviroScreen 4.0, AB 617, Community Air Initiatives, SB 535 disadvantaged communities map, and the PUC’s ESJ Action Plan or any families or individuals who meet the latter criteria:
Disadvantaged communities (DACs) as identified by CalEPA pursuant to Health and Safety Code Section 39711 as well as the 22 census tracts that have the 5% highest pollution score but not socioeconomic data (based on CalEnviroScreen 4.0)
Low-income customers as defined by CARE and FERA eligibility as well as those who have household incomes at or below 80% of the area median income (AMI) as determined by the Department of Housing and Community Development (HCD)
All federally and state-of-California recognized tribal lands
SOMAH-eligible properties as defined by the SOMAH Program Handbook
Census tracts with low historic adoption rates as determined by the CPUC
Pollution-burdened rural and unincorporated communities, whose pollution burden is not reflected in census tract level data Census tracts, with low historic adoption rates as determined by the CPUC.
Reduce the energy burden of low-income communities by modifying NEM export value, as described in Policy A of the proposal submitted to the PUC by The Joint Parties[1] in the NEM 3.0 proceeding.
Guarantee all on-site solar projects and hybrid solar and storage projects that are community-owned and controlled receive NEM credits at full retail rates, minus non-by-passable charges, as under the NEM 2.0 tariff as described in the “community-owned solar” portion of the proposal submitted by CALSSA in the NEM 3.0 proceeding.[1] These are projects owned by a California cooperative corporation (as defined by the California Corporations Code 12200 to 12704), 501(c)(3) nonprofit organization, the state, a county, a city, a city and a county, or a California community college district.
Mandate that all renters and multifamily dwellings in the ESJ communities defined above or that participate in projects that are community-owned and controlled (as described in #3) benefit from virtual NEM.
Mandate Pay-As-You-Save (PAYS) inclusive financing programs.[1] Since PAYS programs are the most inclusive to participation and beneficial to all stakeholders, they are the most democratically accessible programs available. PAYS programs do not require credit or a down payment, have a default rate of less than half of 1%, create jobs that can never be outsourced, reduce emissions, and offset infrastructure and generation investments. The investments are paid back over time out of the savings, creating a revolving fund for future investments.
Strengthen existing state programs by fully funding them. The funding of state incentive programs should come from the state’s General Fund or the IOU shareholders who have profited off of the hardship of our ESJ communities — not NEM customers.
Fully Fund Equity
This new funding structure should support programs such as:
Starting June 2022, raise DAC-SASH funding from $10 million per year over 12 years to $50 million annually through 2030, for a total of $500 million over 12 years. Create incentivized growth targets to increase funding beyond baseline funding. For instance, if the program spends down its $50 million in a single year, then funding will be increased by 10%. That formula should continue to scale up 10% as rooftop solar increases. This will provide an incentive for all stakeholders to increase outreach programs to frontline households.
SOMAH should be expanded to 20% of cap-and-trade revenue or $200 million a year. Provide an additional one-time $2 billion revenue stream that will be made available to affordable housing developers, churches, and BIPOC small businesses to create virtual NEM and potential microgrid/community solar zones.
The Self-Generation Incentive Program (SGIP) goes toward free and reduced-cost batteries for income-qualified and wildfire-prone Californians. We recommend modifying those guidelines to promote community equity. The new “equity guidelines” should be constructed this way. Rules 18 and 21 are to be waived for any entity defined within the maps of CalEnviroScreen 4.0, AB 617, Community Air Initiatives, SB 535 disadvantaged communities map, or the PUC’s ESJ Action Plan so as to not impede a qualifying entity’s ability to transact stored energy. The qualifying entities can be defined as a municipality, joint powers authority, nonprofit, or community cooperative.
We urge the CPUC to conduct a comprehensive program assessment and set procurement guidelines to strengthen the Community Solar-Green Tariff (CS-GT) program design to mandate the involvement of community-based organizations, nonprofits, and other local service providers. The application process and requirements currently exist to benefit for-profit developers and are shutting out many communities from program access. It gives no opportunities to enable local, community-driven projects. The program must be improved to eliminate administrative burden by requiring the load serving entities to make publicly available the scoring rubric of the bid, the community engagement plan that is appropriate to reach the community, and the process for local sponsors to be matched up with appropriate developers.
Create programs that provide targeted investments in housing quality, such as capital for quality roof repair, energy efficiency upgrades, and other building improvements needed for ESJ communities to put solar on their roofs. These are targeted investments in housing quality that also expand access to solar and other energy retrofits. Complementary investments in grid capacity are also needed, especially for remote rural and mobile home communities.[1]
Grow Solar, Educate Consumers
Expand the definition of CARE and FERA customers to include more working families by increasing to 400% of federal guidelines to more accurately reflect California’s cost of living.
Remove discriminatory, exclusionary, expensive, time-consuming, and unnecessary administrative burdens on any programs created for direct investments for intended beneficiaries.[1]
Limit the use of income verification, means testing, and inaccessible applications for targeted investments in ESJ communities.
When possible, directly apply benefits and investments to interested ESJ communities and households.
Permit self-certification for any qualification determinations over discriminatory application processes.
Ensure pathways to allow the growth of quality green jobs, workforce development, and family-sustaining wages in the clean energy transition by adopting the proposal submitted by CALSSA to the PUC in the NEM 3.0 proceeding.[2] We need a thriving solar industry supported by hundreds of small businesses to expand the access of solar and storage to ESJ communities. This helps drive down the underlying market cost of solar that allows us to better leverage public funds for working-class communities while also building the solar workforce we need to accomplish all of the goals stated here.
Ensure marketing, education, and outreach to ESJ consumers to be modeled after the state’s successful Get-Out-The-Vaccine programs,[3] which emphasized strong community education and door-to-door outreach that resulted in the successful promotion of more detailed intimate discussions and community trust that in turn successfully advanced new vaccinations in underserved communities.
The program materials shall include the principles provided by the California Solar Consumer Protection Guide and basic guidelines for local eligibility of all state solar programs such as DAC-SASH, SOMAH, NEM, federal ITC, and applicable local programs, and encourage modules for community ownership.
Additionally, we are calling for the state to mandate language-appropriate programs, staff, and outreach materials. This dissemination of the program’s efforts will include the languages of English, Spanish, Chinese, Korean, Tagalog, Hmong, and Vietnamese, and other appropriate languages in targeted areas as defined by the 2020 Federal Census.
The funding for these programs shall be provided by state block grants, additionally administered by the CA Department of Governmental Operations (CAGO) and performed by nonprofit organizations that will be chosen through a transparent request for proposal process.
In Conclusion
For the safety, health, and economic well-being of economic and social justice communities, it’s time to move to a decentralized energy model that focuses on distributed energy resources and community-centered policy, like rooftop solar and community-owned solar, storage, and microgrids. This transition requires vision and moral courage from our policy makers. We must prioritize community-owned and public renewable energy projects developed by cooperatives, municipalities, and nonprofits that build wealth and decision-making power for BIPOC and low-income communities that have been disproportionately harmed by the current antiquated energy economy based on various forms of extraction but all having negative social outcomes.
CEEE is ready for a fully reimagined energy system with the opportunity to build resilience in the face of climate change. We envision investments in our local economies, a more resilient grid, and the long-term health and safety of our communities. By integrating true equity into California’s state energy policy, we will be able to meet the needs of our communities and build an energy system upheld by environmental and social justice across our state.
Citations
[1] https://www.theguardian.com/environment/2021/nov/16/indigenous-climate-activists-cop26-endangers-native-communities
[2] https://twitter.com/GretaThunberg/status/1460159146720997377
[3) https://www.latimes.com/business/story/2021-11-02/should-california-make-solar-more-expensive-inside-the-climate-justice-battle
[4] Revolutionary Power: An Activist's Guide to the Energy Transition
[5] https://ibew1245.com/wp-content/uploads/2016/09/2016-Physical-Agreement-FI-NAL.pdf page 7
[6] https://votesolar.org/wp-content/uploads/2021/03/GRID-VS-Sierra-Club-NEM-Equity-Proposal-final.pdf
[7] https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M404/K292/404292295.PDF
[8] https://www.cleanenergyworks.org/about-pays-for-ee/
[9] California Environmental Justice Coalition (CEJA), “Energy Justice Statement on Rooftop Solar & Distributed Generation in California,” p.4
[10] CEJA, “Energy Justice Statement on Rooftop Solar & Distributed Generation in California,” p.3
[11] https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/net-energy-metering-nem/nemrevisit/california-solar-and-storage-association-slides.pdf
[12] CA Department of Governmental Operations (CAGO,), UCLA CTSI Community Engagement & Research Program Data from May 2021 to November 2021