CITY OF COACHELLA 1515 PHONE SIXTH STR EET, COACH ELLA, CALIFORN IA (760) 398-3502 • F AX {760) 398-8117 • 92236 WWW. COACH ELLA.ORG July 30, 2018 Mr. George Johnson County Administrative Center 4080 Lemon Street - 4th Floor Riverside, CA 92501 Subject: Ordinance No. 943 Mr. Johnson, I am writing you on behalf of the City regarding the potential illegality of the proposed Ordinance No. 943 on Net Energy Metering (NEM) by the Imperial Irrigation District in unincorporated areas of Riverside County. Based on the majority of City Council's concern, please accept this letter as a letter of support to Imperial Irrigation District's sovereignty and its ability to self-govern. It is our understanding that the Riverside County proposed ordinance would require IID to provide in the unincorporated areas of Riverside County a higher compensation rate to its customers with rooftop solar for the electricity they generate and sell into the grid . Such an ordinance may violate at least two state statues, and constitute an impermissible ratemaking activing disallowed by state law. 1. Public Utility Code§ 2827 Authorizes IID's Current NEM Policy. PUC Code §2827 governs the Legislature' s net energy metering program, and its prov1s1ons are mandatory Statewide. PUC §2827 (b)(lO) provides that "Ratemaking authority' means for a local publicly owned electric utility, such as IID, the elected body is responsible for setting the rates of the local publicly owned utility. This exclusive grant of ratemaking authority to IID's Board of Directors for the NEM program contains no exceptions, and prohibits ratemaking activities by the Riverside County Board of Supervisors. Furthermore, state law specifically directs that IID has no obligation to expand its NEM project because it already exceeds 5 percent of the district's aggregate peak demand. The applicable statute (which the proponents ofthe ordinance have not mentioned) is PUC§ 2827 (c)(4)(A) which clearly states: An electric utility that is not a large electrical corporation is not obligated to provide net energy metering to additional eligible customer-generators in its service area when the combined total peak demand of all electricity used by eligible customer-generators An A.fjirmative Action/ Equal Opportunity Employer CITY OF COACHELLA ) 515 PHONE SI XTH S T REET, COACH ELLA, C A LIFORNIA (760) 398-3502 • FA X (760) 398-8 l l 7 • 92236 WWW .COACHELLA.OR G served by all electric utilities in that service area furnishing net energy metering to eligible customer-generators exceeds 5 percent of the aggregate customer peak demand of those electric utilities. It is understood by the City that IID's NEM obligation ends when furnishing NEM to eligible customergenerators exceeds 5 percent of IID's aggregate peak demand . 2. Water Code §22123 Confers on the County No Ratemaking Authority § 22123 Any district providing electric power to areas outside its boundaries shall be subject to reasonable rules, regulations, and orders of the governing body of the city or county area being served, but, in no event, more restrictive than the rules, regulations, and orders of the Public Utilities Commission upon utilities providing electric power to cities or counties. No district may impose rates, rules, regulations, or orders in any such area outside its boundaries which are different from rate, rules, regulations, or orders imposed within the district, except with the consent of the governing body of the affected area. In this section again specifies that "No district may impose rates, rules, regulations, or orders ... " that are different than those set by IID. As a City Council who directly oversees the Coachella Water Authority and Sanitary District, we share IID's grave concern of another governmental entity imposing rate, rules, regulations, or orders that differ from those set by my City Council/Board of Directors which can lead to financially disastrous results. The City is additionally concerned with the potential cost pressures on IID' s electricity rates due to subsidizing a private entity/electricity generator in order to make its business model viable at a cost to our residents and business community. Sincerely, William Pattison City Manager CC Kevin Kelley Supervisor V. Manuel Perez, 4th District An Affirmative Action/Equal Opportunity Employer