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ITEM #4 CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF DECEMBER 4, 2007 TO: HONORABLE MAYOR AND CITY COUNCIL FROM: Jeannette Olko, Electric Utility General Manager SUBJECT: SBA FUNDING PUBLIC PROCEEDING DATE: November 27, 2007 BACKGROUND: On August 21, 2006 the State of California approved SB -1, The California Solar Initiative. This initiative was designed to encourage the installation of 3,000 MW of solar electric systems by 2016. SB -1 requires that publicly owned utilities (POU) begin making funds available incentives for the customers to install photovoltaic systems on their properties beginning on January 1, 2008. The incentives must be at a minimum of $2.80 per Watt and must decline at 7% per year. The POUs must initiate a public proceeding meeting before January 1, 2008 to determine what additional funding, if any, is necessary to provide the incentives to meet the utility's share of the statewide goals. On November 20, 2007 the Colton City Council approved a resolution to hold a public proceeding on Tuesday December 4, 2007 to discuss funding of financial incentives for customers' solar energy systems as required by S13-1. Colton's percent of the statewide goals is to make incentives available for the installation of up to 4 MW of PV systems by 2016. Its financial share is to spend up to $4,267,125 over a ten year period. Colton has had a PV incentive program since March 15, 2005 with an incentive of $4.00 per Watt and the program has had a cap of $20,000 on residential systems and $50,000 on commercial systems. Six residential customers have installed PV systems since the program's inception and a total of $85,000 has been paid for the installation of 21.5 kW. One 100 kW commercial system has been installed with an incentive of $50,000 and another is being planned. DISCUSSION/ANALYSIS: Colton Electric Utility as a publicly owned electric utility in the State of California is required under SB 1 to hold a public proceeding before January 1, 2008 to determine what additional funding, if any, is necessary to provide the incentives to meet the utility's share of the statewide goals. To meet this requirement the governing body of Colton Electric Utility, The Colton City Council, must have a public proceeding before January 1, 2009. On November 20, 2007 The Colton City Council approved a resolution to hold a public proceeding to discuss funding of financial incentives for customers' solar energy systems as required by S13-1. This proceeding is to discuss the funding of financial incentives for customers' solar energy systems as required by SB -1.