California Cities Could Soon Pay for Renewables with Property Tax Revenue

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A bill recently introduced in California’s State Assembly would dramatically increase the ability of cities to boost renewable energy.

If passed, the legislation would allow cities to redirect property tax revenue directly to renewable energy projects. Perhaps more significantly, the bill would also let cities create “Renewable Energy Zones” without voter approval requirements.

Assemblyman Ben Hueso, a Democrat from San Diego, is pushing AB 2551 to create a funding mechanism similar to how California previously allowed redevelopment agencies to collect and allocate revenue. Cities could designate a specific area as a renewable energy zone required to generate at least ten megawatts of renewable energy, “including, but not limited to, solar, wind, and geothermal projects, as determined by the legislative body.”

New Level of Autonomy

Once the zone was created, municipalities could establish an infrastructure financing district in the area and use any property taxes collected “for the purpose of promoting renewable energy projects.” In addition, non-contiguous areas could be designated under the zone, and different projects could be combined to reach the ten-megawatt minimum.

The most important measure of the bill may be the degree of autonomy it would give to cities. If passed by a two-thirds vote, energy zones would be exempt from voter approval requirements and could be created by a majority city council vote.

Regional Precedent

This bill may seem revolutionary, but it’s not surprising given the region Hueso represents. San Diego Gas & Electric (SDG&E), the regional utility, recently announced 20.8 percent of its electricity came from renewable sources, almost double the 12 percent it provided from renewables in 2010. This new level of renewable input vaults SDG&E to the top position in percentage of electricity from renewables among California’s three largest utilities.

California currently ranks second in the nation in renewable electricity capacity and generation, and currently has a 33 percent by 2020 renewable energy portfolio target. But, much of this capacity has come from utility-scale solar or renewable projects outside city limits, and this new effort could speed up the contribution of smaller-scale distributed generation projects.

Grid Integration Concerns 

One of the biggest criticisms for distributed renewables has been skepticism over the grid’s ability to manage large contributions from dispersed and intermittent generation sources. But, once again, the Golden State has that covered. California ISO, the state’s grid operator, recently released a five-year plan to integrate distributed generation through energy storage and smart grid innovations.

If Hueso’s bill passes, California could once again be set for a gold rush — only, this time, in municipal renewable energy projects.

Source: Desert Dispatch

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