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HomeMy WebLinkAbout1982-12-07; City Council; 7224; Establishing Municipal Solar UtilityN co t 0 CIT . OF CARLSBAD - AGEND.� BILL MTG.—t 2 DEPT. UTL RECOMMENDED ACTION: AN ORDINANCE ESTABLISHING MUNICIPAL SOLAR UTILITY DEPT. H CITY ATTY CITY MGR. Council adopt Ordinance No. amending Title 18 by addition of Chapter 18.30.030 establishing the Carlsbad Municipal Solar Utility. ITEM EXPLANATION• The Governor signed legislation of September 29, 1982, clarifying solar tax credit eligibility of taxpayers leasing solar energy systems from lessors granted a permit from a solar municipal utility established by ordinance prior to January 1, 1983. The purpose of this ordinance is to establish eligibility under these state laws should Council choose to implOment a solar leasing program in the near future. The City of Oceanside established a similar program last year and has been instrumental in establishing about 700 leases. Five percent of the lease costs are charged by the City to offset staff costs. The following outline is a work schedule staff would recommend: 1. Market Analysis - R&A Staff - $3-$5,000. 2. Consultant Effort to Establish Prograns - $10-$12,000. It is expected that current staff can administer the program once the implbmenting resolutions, model agreements, bonding requirements and billing processes have been established. A more detailed work program will be provided Council for their approval prior to proceeding. FISCAL IMPACT: None by approval of this Ordinance. EXHIBITS: 1, v Ordinance No. Fo C% 2. K Letter from SANDAG San Diego ASSOCIATION OF & ERNMEN TS Suite 524, Security Pacific Plaza 1200 Third Avenue San Diego, California 92101 (714) 236.5300 November 3, � I TO: City Managers FROM: Steve Sachs, SANDAG Staff SUBJECT: Municipal Solar and Conservation Utilities: Potential Local Actions NOV 1982 A RA�Ct.Aa CALIF This ietter concerns an opportunity for cities to preserve the future option for forming a Municipal Solar and Conservation Utility (MSCU). In order for citizens to be able to receive a 55% state solar tax credit when leasing a solar water heater or other solar equipment through an MSCU, an MSCU ordinance must be adopted by interested local governments by December 31, 1982. This time requirement is contained in AB 3788 signed by Governor Brown on September 30, 1982. The California Energy Commission recommends that the local MSCU ordinance do two things in order to qualify under AB 3788: State an intent to establish an MSCU. Include provisons for: issuing permits to qualified businesses; and adopting rules and regulations for consumer protection and permitee eligibility criteria. The ordinance does not have to commit the city to establish an MSCU, but can preserve the city's opportunity for allowing citizens to make use of the 55% tax credit if an MSCU leasing program is established. Attached to this letter is a model ordinance which your city may wish to review if it is interested in considering an MSCU. An informational report on the MSCU idea and the time deadline contained in AB 3788 will be made to the SANDAG Board of Directors at its meeting on November 15, 1982. Attachment A to this letter contains a description of the MSCU concept which will be included in the SANDAG Board report. Please call me at 236-5346 if you have questions about the MSCU. N, MEMBER AGENCIES- Cities of Carlsbad, Chula Vista, Cororado, Del Mar, El Cajon, Imperial Beach, La Mesa, Lemon Grove, National City, Oceanside, Poway, San Diego, San Marcos, Santee and Vista • ADVISORY MEMBERS California Department of Transportation and Tijuana/Bala California Norte AN ORDINANCE ESTABLISHING A MUNICIPAL SOLAR UTILITY. WHEREAS, it is the policy of the City of to encourage and promote the use of solar energy and conservation in order to strengthen the local economy, to gain greater energy self-reliance, and to maintain a good quality of life for its citizens; and WHEREAS, recent State Legislation, Chapter 1552, Statutes of 1982, signed by the Governor on September 29, 1982, was enacted to clarify the solar energy tax credit eligibility of solar energy systems; and WHEREAS, the Legislature amended Section 17052.5 and Section 23601 of the California Revenue and Taxation Code to provide certain specified tax credits to taxpayers who partially own and partially lease a solar energy system from any lessor granted a permit from a Municipal Solar Utility established by ordinance of the local jurisdiction prior to January 1, 1983; and WHEREAS, the purpose for which a Municipal Solar Utility is created by a local government is to conduct and support programs which promote the utilization of renewable energy and energy conservation technologies; and WHEREAS, the Council of The City of wishes to implement programs through such a Municipal Solar Utility which 3 pAnp t nr 9 i would thereby make taxpayers eligible for such tax credits as an incentive to install solar energy systems; NOW, THEREFORE, BE IT ORDAINED, by the Council of The City of as follows: 1. That a Municipal Solar. Utility is hereby created for purposes of satisfying requirements contained in Section 17052.5 or Section 23601 of the California Revenue and Tax Code. 2. The Municipal Solar Utility shall be under the direction and control of the City Manager. 3. The Manager shall present for Council approval rules and regulations governing the activities of the Municipal Solar Utility including a program whose primary activity will be issuing permits to qualified solar leasing businesses, and establishing permittee, and/or consumer protection criteria. Such rules and regulations shall be approved by Council resolution. 4. This ordinance shall take effect and be in force on the thirtieth day from and after its passage. i ATTACHMENT A An MSCU is not really a utility, and does not directly compete with SDG&E in supplying natural gas and electricity to customers. However, this term has been used in state lesiglation to describe a number of potential local government activities which are essentially "brokerage" functions which assist private -sector investors and local energy consumers in making transactions for solar and conservation equipment. In the San Diego region, the City of Oceanside has been operating an MSCU for the past year, and the City of San Diego is considering initiating an MSCU. Because of state legislation described below, if a city wants to take full advantage of the energy and money -saving opportunities it can offer its citizens through an MSCU, it must adopt an MSCU ordinance by December 31, 1982. Adopting the ordinance will preserve the option of forming an MSCU in the future that will allow customers who lease solar equipment to receive state solar tax credits on the principal portion of their lease payments. Cities that are interested in evaluating the MSCU idea for their locality should consider adopting an ordinance prior to the December 31, 1982 state legislative deadline. Oceanside's experience with its solar water heater leasing program over the past year appears to demonstrate the feasibility of an MSCU: o Attracting substantial private capital for investment in solar water heating equipment, installation and maintenance (the interest of private investors issue to federal investment tax credits and accelerated depreciation benefits); o Providing consumer protection which has credibility with customers and is acceptable to investors (e.g., warranty, installation and maintenance requirements backed by a performance bond); o Reducing initial consumer costs to a level that allows households and businesses which cannot afford to purchase solar systems to lease them; o Saving participants energy and o Collecting fees which cover utility bills; local government operational costs. There are many alternative activiti s that an MSCU could be involved in and other technologies besides solar water he ters that could be assisted. A city would have the option of selecting one or any umber of these activities as appropriate for its jurisdiction. One of the experiences of Ocear commercial building owners see E program even without 55% state system purchasers. However, sing incentive to participate in the lei been provided through AB 3788 si This bill allows the 55% solar tax lease payments if the solar equip granted a leasing permit by an MS prior to December 31, 1982. .ide has been that multifamily residential and 1 advantage to the solar water heater leasing solar tax credits that have been provided to family households would require an additional sing program at this time. This incentive has ;ned by the Governor on September 30, 1982. redit to be claimed for the principal portion of ent is leased from a company which has been U which is established by an ordinance adopted 3.1 l ORDINANCE NO. 8099 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY 3 OF CARLSBAD, CALIFORNIA, AMENDING TITLE 18, CHAPTER 18.30 OF THE CARLSBAD MUNICIPAL CODE, 4 BY THE ADDITION OF SECTION 18.30.030 ESTABLISHING THE CARLSBAD MUNICIPAL SOLAR UTILITY S WHEREAS, it is the policy of the City Council of the s City of Carlsbad to encourage and promote the use of solar 7 energy and conservation -in order to strengthen the local 8 economy, to gain greater energy self reliance, and to maintain a 9 good quality of life for its citizens; and 10 WHEREAS, recent State Leg islation, Chapter 1552, 11 Statutes of 1982, signed by the Governor on September 29, 1982 a 12 was enacted to clarify the solar energy tax credit eligibility °° 8 13 of solar energy systems; and a z o?a lnt WHEREAS, the Legislature amended Section 17052.5 and m �0 15 Section 23601 of the California Revenue U � � }W and Taxation Code to zog 16 provide certain specified tax credits to taxpayers a ers who > 0 17 partially a < own and partially lease a solar energy system from any lessor ' 18 granted a permit from a municipal solar utility established by 19 ordinance of the local jurisdiction prior to January 1, 1983; 20 and 21 WHEREAS the purpose of which a municipal solar utility 22 is created by a local. government is to conduct and support 23 programs which promote the utilization of renewable energy and 24 energy conservation technologies; and 25 WHERE'S the City Council of the City of Carlsad wishes s to implement programs through such a municipal solar utility 27 which•would thereby make taxpayers eligible for such tax credi ts its as an incentive to install•solar energy systems; a 4 5 6 7 8 9 10 11 12 0 a m P 13 � U � g o ; a 2 2 1.4 CC W 0 CI� a4J 15. � �1{ W U 2Z80 16 V m zo >C 17 18 U a 1 19 20 � 21 22 3 23 24 25 2611 27 28 NOW, THEREFORE, the City Council of the City of Carlsbad does ordain as follows: SECTION 1: That Title 18, Chapter 18.30 of the Carlsbad Municipal Code is amended by the addition of Section 18.30.030 to read as follows: 18'.30.030 Carlsbad Municipal Solar Utility. (a) The Carlsbad Municipal Solar Utility is established for purposes of satisfying requirements contained in Section 17052.5 or Section 23601 of the California Revenue and Tax Code. (b) The Carlsbad Municipal Solar Utility shall be under the direction and control of the City Manager. (a) The City Council may by resolution adopt rules and regulations governing the activities of the Carlsbad Municipal Solar Utility including establishing a program for issuing permits to qualified solar leasing businesses including permittee and consumer protection requirements. EFFECTIVE DATE: This Ordinance shall be effective thirty days after its adoption and the City Clerk shall certify to the adoption of this ordinance and cause it to be published at least once in the Carlsbad Journal within fifteen days after its adoption. INTRODUCED AND FIRST READ at a regular meeting of the Carlsbad City Council held on the 7th __ day of Decerber , 19_ V , and thereafter 2. 1, PASSED AND ADOPTED at a regular meeting of said City 2 Council held on the 21st day of December 1982 by 3 the following vote, to wit: 4 AYES: Council 1•7embers Casler, Lewis, Kulchin, Chick and Prescott 5 NOES: None i 6 ABSENT: None 4 7 8 CLi MARY H�.AZ�R Mayor 9 ATTEST 10 3.1 ALET A L. RA EN RANI, XTY CLERK IMkN R. KUNMZ, Deputy CI -by Clerk 12 c co co 13 U Q oo :z z�� °�' .14 C LL LL U 15 ', w WZ8s 16 K Q ca ' _zo^-j 17 18 j i 19 20 21 22 23 24 25 ' 26 27 28 3.