Lemon Grove Joins Fight Against SDG&E's Proposed 'Network Use Charge'

The City Council is backing the Lemon Grove School District in its fight against SDG&E over a proposed charge to solar power customers that would increase the budget-strained school district’s energy costs nearly $50,000.

Council members voted 4-0 at Tuesday’s meeting to oppose the rate structure filed Oct. 3 by SDG&E with the state Public Utilities Commission. Lemon Grove joins several other cities and local government agencies in the county taking a stand against the move.

Solar customers—called net-energy metering customers— account for about 1 percent of the utility’s ratepayers. The “network use charge” will charge them for using the system to take energy when needed and give back energy that is produced.

SDG&E says the proposal is a fairness issue. According to J.C. Thomas, SDG&E’s government and regulatory affairs manager, 99 percent of ratepayers are effectively subsidizing those with solar installations.

But SDG&E benefits financially from solar producers, according to critics of the idea, who say the utility has made money off of solar without spending anything on it.

“Just who is subsidizing whom in this situation?” says Tara Kelly of San Diego-based Sullivan Solar Power.

In 2005, the school district installed a $4 million solar power system, funded with state solar initiative grant money and a $2 million low-interest loan. The district had been seeking a way to stem rising energy expenses.

The system came with a guarantee from the vendor that the cost savings from using the alternative energy source would be enough to make the annual loan payments, according to Dr. Gina Potter, assistant superintendent of business services.

However, a rate structure that was not friendly to alternative energy sources, says Potter, caused the district’s energy bill to increase rather than decrease.

Legal action against the vendor, manufacturer and SDG&E resulted in agreements with all three parties, says Potter, and a new rate structure from the utility in 2008.

Potter says it’s disheartening that the current rate structure would be undermined in such a short period of time without even a conversation with commercial alternative-energy users.

“It makes everyone think they are quietly trying to pass a new rate structure and hope that no one would notice,” she says. “It was not upfront and honest.”

The PUC is expected to act on the filing in December 2012.