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ITEM #10 CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF SEPTEMBER 16, 2008 TO: HONORABLE MAYOR AND CITY COUNCIL FROM: Jeannette Olko, Electric Utility General Manager SUBJECT: Recommended Changes Colton Electric Utility's Solar Electric Rebate Program DATE: BACKGROUND Colton Electric Utility (CEU) is recommending changes to CEU's existing residential and business solar rebate program which was approved by The Colton City Council on March 15, 2005 in order to become fully compliant with the requirements of Senate Bill 1 (SB1). SBI seeks to encourage the installation of 3,000 megawatts of photovoltaic solar energy in California by December 31, 2016. Colton's share of this goal is 4 megawatts. There are currently 14 solar systems operating in the city, providing 167.6 kilowatts of solar photovoltaic power. We anticipate numerous residential solar systems coming on- line during 2008. Most likely up to 100 kilowatts of commercial projects will be installed as a result of a recent South Coast Air Quality Management District grant process. Additionally, there have been several inquiries regarding potential solar projects within the city. DISCUSSION ANALYSIS SB1 includes the following provisions for publicly owned utilities (POU): • Offering monetary incentives for the installation of solar energy systems of at least $2.80/watt by January 1, 2008 for systems of up to one megawatt capacity. • Declining incentives by an average of at least 7% per year until they are zero by the end of 2016. • A public proceeding to discuss funding of the utility's share of the state's goal. • Annual reporting, beginning June 1, 2008, made available to POU customers and the California Energy Commission, including the number of photovoltaic solar watts and systems installed, the total number of applicants, amount of incentives awarded, and the POU's contribution toward the program goal.