Going solar is just like any other investment: There’s gonna be some risk.
And the solar-powered school districts within San Diego County have come to expect some financial uncertainty in the years since they installed solar panels.
That unease peaks every three years when San Diego Gas & Electric proposes rate hikes and changes, which can affect the savings districts get by going solar.
Since at least 2007, school districts across the region have complained to the state Public Utilities Commission proceedings about new charges and policies they believe could devalue their solar investments and add to their energy costs. They’ve been largely successful.
In 2008, they pushed SDG&E to create a new rate structure for solar schools following unexpected bill increases and three years later, they helped persuade the commission to reject a proposed network use charge for solar customers.
More school districts have stepped forward this year.
This spring, 38 of the county’s 42 school districts filed a protest to SDG&E’s latest proposed rate change. They say the proposal would saddle schools with more rate hikes after a roughly 21 to 24 percent increase last year.
SDG&E has said it hopes to reduce rates for large and medium commercial customers, a group that includes most schools, by about 4 percent over three years. But that hasn’t quelled concerns.
Earlier this month, Assemblywoman Shirley Weber announced she was investigating energy rate hikes at schools and pledged to hold a local hearing on the topic.
Joshua Nelson, a Sacramento-based attorney representing county districts, argued in his April filing to the Public Utilities Commission that rate hikes can be particularly challenging for schools with fixed costs and an inability to raise fees to cover higher bills.
“Any rate increases divert precious public resources from students and facilities and towards the profit-making utility,” Nelson wrote.
The future of solar investments at schools, which many leaders eyed as a way to lessen the burden of rate hikes in the first place, were among the group’s concerns.
Schools that have already gone solar or are looking to could see less savings if SDG&E’s plan goes through, Nelson wrote.
Nelson, who could not be reached for comment, didn’t elaborate on specific impacts to school districts that use solar power in the filing.
SDG&E says it’s doing what it can to work with schools, and is trying to avoid proposals that could stick other customers with an undue burden.
Mitch Mitchell, SDG&E’s vice president of legislative and external affairs, said he met with some school leaders this week. (Disclosure: Mitchell serves on Voice of San Diego’s board of directors.)
Mitchell said he brought up the potential for partnerships that allow school districts to team on solar investments and other energy-efficiency upgrades possible with Prop. 39, a state measure passed in 2012.
“We are now shoulder to shoulder with them in trying to find ways to reduce demand but more importantly, reduce their costs,” Mitchell said.
He believes most districts will “come out winners” with the utility’s latest rate proposal, including those with solar panels.
One thing standing in the way of that: Rate changes don’t always affect solar-powered schools the same way.
Take a recent SDG&E proposal to shift peak pricing hours. The utility ran the numbers and concluded 63 solar-powered schools would actually see their bills drop if it switched its peak charges from the current 11 a.m. to 6 p.m. window to 2 p.m. to 9 p.m.
But 13 others would see their bills rise by an average of 14 percent, though the utility offered to provide a bill credit to those schools to cushion them. (The districts and SDG&E dispute exactly how the latter was hashed out. SDG&E has said it’d still be on the table if the proposal survives. The schools say SDG&E brought up the idea and later backed away from it.)
One of the districts whose bills would rise was the Lemon Grove School District.
The district was one of five in San Diego County that challenged SDG&E’s time-of-use proposal, which an administrative law judge ruled earlier this month should be put on ice. The Public Utilities Commission is expected to weigh in next month.
Gina Potter, Lemon Grove’s deputy superintendent, said she’s optimistic the commission will take the judge’s suggestion. But she still has concerns.
Lemon Grove installed solar panels on three schools in 2005 with the idea it’d save more than $600,000 on energy bills in the first 11 years.
More than a decade later, Potter said the district hasn’t lost money but hasn’t seen any of the savings it expected. She blames technical issues with the panels, and ongoing energy rate hikes.
Solar experts say districts that have gone solar more recently may face an easier ride. The solar industry’s matured and the technology’s gotten more predictable and efficient.
“If you act now and you do your due diligence you can probably trust that a project will pencil out,” said Michael Ware, vice president of EcoMotion, a Los Angeles-based firm that advises government entities going solar.
Yet incremental rate changes can chip away at the payoff of the long-term investment.
Tom Wright, San Diego Unified School District’s environmental compliance manager, said the district’s made a point to plan on rate hikes over the years in order to avoid over-predicting possible savings.
“Honestly, you’re always at risk with rates,” Wright said. “I think that’s predictable.”
Bill Dos Santos, who leads an energy joint powers authority at the county Office of Education and attended the meeting with Mitchell this week, advises districts not to rely on solar to reduce their energy bills.
“No one technology gives you an answer,” he said.
Yet districts – solar-powered or not – are desperate for one, and their arguments are getting more attention.
Weber’s investigation of school utility bills will include a look at investments districts believed would lower their energy costs and whether that’s actually happening, a spokesman for the assemblywoman said.
Potter hopes Weber and other lawmakers will come up with a long-term solution that gives schools with solar investments stability. She doesn’t want to oppose SDG&E every time there’s a rate change.
“That is the current reality unless we have some type of long-term legislative relief,” she said.
This is part of our quest on whether solar will pay off for San Diego. Check out our previous post, San Diego Unified’s Had Some Dark Days With Solar, here.