AB 493

This bill authorizes the establishment of community solar programs through which retail electric customers of an investor-owned electric utility may subscribe to a community solar facility and receive credits to their electric bills for electricity produced by the facility. Under the bill, entities called subscriber organizations may own or operate community solar facilities, which use solar energy to produce electricity. Retail electric customers may enter into a contract (subscription) with a subscriber organization through which the customers receive credits towards their electric bill based on their subscriptions. A subscriber and the community solar facility to which the subscriber subscribes must be located within the service territory of the same investor-owned electric utility. In addition, a subscriber may not receive an annual value of bill credits that exceeds the subscriber’s average annual electric bill. Also, under the bill, subscribers may not receive any state subsidy for which generating electricity from a renewable energy resource is a criteria for eligibility nor may subscribers receive any payment or other benefit from a tax incremental district.

The bill requires an investor-owned electric utility whose service territory includes subscribers to a community solar facility to credit the electric bills of the subscribers based on their subscriptions. PSC must promulgate rules allowing for establishment of community solar facilities and for subscribers to receive electric bill credits for their subscriptions. Under the bill, PSC’s community solar program rules must also satisfy various other requirements, including that the rules must modify existing interconnection standards, fees, and processes to facilitate interconnection of community solar facilities with the electric distribution grid. The rules must also require subscriber organizations to maintain proof of financial responsibility ensuring the availability of funds for decommissioning community solar facilities. PSC’s rules must also provide that bill credits may not reduce a subscriber’s monthly electric bill, including fixed charges, below $20. Four years after the rules take effect, PSC must submit a report to the legislature evaluating the costs and benefits of community solar programs.

The bill limits the total nominal capacity of community solar facilities established in this state to 1,750 megawatts. PSC must apportion the total nominal capacity limit among the investor-owned electric utilities having a service territory within this state, and the apportionment must be based on each utility’s proportion of the total electric load served in this state. A community solar facility may not be established within the service territory of an investor-owned electric utility if the nominal capacity of the facility plus the total nominal capacity of the community solar facilities already established within the service territory of the utility exceeds the capacity limit apportioned to the utility by the PSC. The bill also provides that PSC must promulgate rules that prohibit community solar facilities placed in service after December 31, 2035, from entering the program.

The bill also specifies that community solar facilities are subject to the zoning ordinances applicable to the parcels on which they are located. Also under the bill, with some exceptions, no building permit for a structure that is part of a community solar facility may be issued unless the municipality with zoning authority over the parcels on which the community solar facility is to be located approves the use of those parcels for purposes of a community solar facility by a two-thirds vote of the governing body of the municipality. The bill also subjects the community solar facilities of subscriber organizations to property taxation. Generally under current law, a person engaged in generating electricity for others is exempt from property taxation but is instead subject to a tax based on gross revenues.