Prop 39 can support clean energy across California
This funding mechanism will provide necessary financial assurance to drive projects to optimized locations on the grid.
As one of the first organizations to endorse California’s Proposition 39, the Clean Coalition is pleased that this common sense tax reform passed the November 6 ballot with over 60% of the vote. The passage of Proposition 39 creates an estimated $500 million in tax revenue that will be directed into a new Fund dedicated to maximizing job creation and energy benefits through energy efficiency and clean energy projects.
The Clean Coalition believes that the Fund should enhance California’s wholesale distributed generation (WDG) programs by employing a “Grid Bonus” to front the cost of interconnecting new projects that provide overwhelming locational value to ratepayers. This innovative idea, which the Clean Coalition submitted to the Governor’s office, will boost the deployment of clean local energy, while making the Fund sustainable for the long-term — not just for the five-year period structured as a fixed limit in Proposition 39. The Fund will cover interconnection costs for new WDG projects only in designated grid areas, and those investments will be returned to the Fund over five years as ratepayers reap the financial benefits of strategically sited renewable energy.
Placed in the right location, DG projects provide significant economic and environmental benefits while minimizing grid upgrade costs. However, lower interconnection costs offered at key locations often fail to attract new projects due to those locations being close to loads, where people live and work; and where siting is more expensive. Therefore, the Grid Bonus will provide necessary financial assurance to drive projects to optimized locations on the grid. This funding mechanism will also expedite the deployment of DG projects, provide cost certainty to developers, level the playing field between DG and transmission-connected projects, and encourage utilities to transition to a local energy system.
Stay tuned for additional updates as the Clean Coalition gathers support for this proposal.