So why isn't it routinely the case that a new law, especially one which gives some level of implementation discretion to an unelected agency, is outcomes-tied from the start? That is, why doesn't the legislature define an outcome or set of outcomes (like X more households on community solar per year, Y cost constraints, etc) and direct the agency in its legislation to manage toward that outcome, and mandate a review period after which the law sunsets if it isn't achieving that outcome? This is much more like the way successful private sector organizations operate (think KPIs) and it would systematize the good effects of these reviews much more thoroughly than this sample pilot program. What stands in the way of future California laws being written like this?
The answer is that the stated goals are not the true goals. I'm often reminded of Charlie Munger's famous maxim : “Show me the incentive and I'll show you the outcome.”
And if you want to know what the incentives actually are, Jennifer Pahlka has quite a bit on that.
"To be fair to the commission, it has an argument: paying community solar projects above wholesale rates can shift costs onto everyone else’s bills, the same concern that drove the rooftop solar fights. That’s a legitimate policy question that involves tradeoffs that someone has to decide between."
I am looking forward to the outcomes review in a decade or so when the legislature learns that the CPUC and the evil IOUs were correct about this. Maybe then legislators will finally realize the difference between (1) lowering the underlying costs of building and operating the grid and (2) shifting those costs between customers. Probably wishful thinking on my part.
Regardless, I appreciate the spirit of Speaker Rivas' Outcomes Reviews. This is excellent!
Outcomes review touches on something lawyers used to be trained in. Lawyers should know in general how to write statutes which are more likely than not to be effective. Something the legislators should anticipate how "wiggle room" can and cannot be used to change the outcomes. Or, in other words, whether ambiguous language is a good idea or not. Sometimes, you want to be less specific because you want agencies and courts to have flexibility to respond to facts on the ground. Sometimes, you want to slam the door shut for an agency or a court that wants to undermine your statute.
But, the reality is there is going to be a never-ending conversation between facts on the ground, agencies and courts. Something this country seems to have forgotten is statutes override court cases and agencies cannot legislate. The example in this article gets at this when it says the policy choice had been made by the legislature. However, because there was wiggle room in the statute, the agency could say it was implementing the law. At that point, if someone challenged the agency implementation, a court could interpret what the law said. If the legislature did not think the court correctly ruled on its intent, then it could revise the law to make that clear.
Outcomes review is a good way to make it clear that the legislature is going to do its job. Constant debugging is an excellent analogy. Legislators are only guessing at how a law will play out in real life. Once real cases start happening, then the legislature must revise the law accordingly.
Community solar is often touted as a way for renters or low-income households to benefit from renewable energy programs. It creates an option for customers who don’t own their homes (and roofs) to subscribe to an off-site solar project and receive credits on their electricity bill for a portion of the energy produced.
Although the California Public Utilities Commission (CPUC) has several existing community solar programs, AB 1813 would direct the CPUC to consider increasing project compensation, with the stated goal of promoting low-income participation by offering higher bill credits.
But AB 1813 risks raising bills for the same low-income customers that it seeks to help. The problem is that the credits it proposes are larger than the value that the solar provides to the grid, and those credits are paid for by customers that do not participate in the program. This is not a scalable or fair solution. And it exacerbates the inequity baked into the current rate structure.
California is paying extremely high costs to reduce wildfire risk, and because we recover those costs in volumetric electric rates, customers who live in hot places and use more electricity pay a disproportionately higher share of wildfire costs compared to customers who “use” less (especially in the case of customers who have installed their own rooftop solar systems).
Overcompensation means that customers that don’t participate in the AB 1813 program would likely pay an outsized share of wildfire and other grid costs.
It is difficult to predict how precisely how large the cross-subsidy of AB 1813’s community solar program would be, since it depends on enrollment, location of projects, and other factors. But a conservative estimate by my office indicates that AB 1813 would cost non-participants an average of $1.5 billion annually, which could equate to an increase of almost $12 per month on every non-participating customer bill. That is on top of the roughly $7 billion that non-solar customers are already paying for their neighbors’ rooftop panels each year, which raises bills by about 12-19 percent (depending on the utility).
While AB 1813’s stated intention is to expand solar savings to low-income Californians, the reality is that the many low-income customers who do not participate would see their bills rise as a result. For example, a household in West Fresno, which is already paying some of the highest electricity bills in the entire country, could be charged an additional $140 per year to cover the cross-subsidy created by AB 1813. For the many Californians living paycheck-to-paycheck or feeling the squeeze of higher grocery and natural gas bills, that increase is unsustainable. The larger the program grows, the higher their bills would rise. And like Net Energy Metering, once the program becomes widespread, it is difficult to scale back.
Expanding access to community solar doesn’t have to come at the expense of other ratepayers. In fact, under the current slate of CPUC programs, which create a much lower cross-subsidy than AB 1813 would, there are already 560 megawatts (MW) of community solar projects serving nearly 200,000 customers statewide, with another 430 projects under construction. Low-income households can see their electricity bills reduced by up to half, when combined with assistance programs like the California Alternate Rates for Energy and Family Electric Rate Assistance programs. For example, under the CPUC’s existing framework, Ava Energy and Prologis are partnering to bring 100 percent clean energy and meaningful bill savings to 3,000 income-qualified households across Alameda and San Joaquin counties with community solar projects sited on industrial warehouses.
As elected leaders work down to the wire of this legislative session to broker important affordability fixes, they should also carefully consider whether passing AB 1813 will deepen the solar cross-subsidy and undercut those efforts to support customer electricity bill affordability.
Cautiously optimistic about this development. It will be interesting to see whether the new law on solar will indeed lead to better outcomes.
I was thinking that for some laws, the implementation doesn't necessarily fall apart, but the time horizon to ramp up is so far in the future that by the time people have gotten to a point where the outcomes are manifesting, everyone has moved on.
Jen, the sentence I keep coming back to is the one after the hearing: the commission "finalized its version of the program in June, largely unchanged. So this is now a standoff." The review did what it was built to do. It assembled the whole record in one place, once, at a public moment. Then the record went back to being nobody's. The agency's answer to the review has the same shape as its answer to the law, and no venue writes that answer down with a date.
You call this debugging, and a bug has states: open, assigned, answered, fixed, won't-fix, and no response, with an age. The June order is an answer, not a resolution. A won't-fix with the cost-shift argument attached would be an honest disposition. A standoff is neither. The FAIR Plan offers "dying somewhere with a broker" are the same object one level down: delivered, never received, and nobody dating the gap.
What would let a member stick with an issue without depending on their attention is a record the reviewing office keeps after the hearing: one line per finding, its state, and how long it has sat there, published in the fall report.
I keep that record for safety reports I have filed with agencies. "Responded" and "disposed" turn out to be different columns, and the age of the silence is the number nobody else counts. If the Speaker's report already tracks each finding by state and age, I'm wrong and glad.
Jennifer-- I very much appreciated your framing here. Especially that part that says "We need to build the muscle for saying that when things aren’t on fire. ... When things work well, it’s usually not because they were designed perfectly, but because they are constantly being debugged."
The outcome review (or whatever we call it) should be a continuous process. And, yes, that'd be hard since it'd require admitting failure, spending resources for the outcome review etc, which all require public trust. But, without all of this, how can we build that so-much-needed trust with our communities? Delivery is a vehicle for trust building. And delivery requires understanding what's working and not working.
I concur that the outcomes review is a good process. However, this story about the community solar bill seems to be an act of legislative control to remove discretion from the agency. This seems to conflict with some of your ideas in Recoding America where the problem would often be that policymakers wrote laws that were too rigid and didn’t allow for agency/staffer flexibility. Could there be agency staff at CPUC who had good reasons for not implementing this that didn’t make it up the waterfall? Hard to say.
I get that the core conceit of this example was that the tires weren’t connected to the steering wheel. I just wonder if this granting and revoking of discretion is not really a solvable problem, but a condition of if we as observers like the law or not.
When the Trump administration passes a law we don’t like, we are happy when the agency slow rolls it or drowns the implementation in procedure. When they block a Biden law we like from implementation, we think it’s bad.
Ultimately, giving discretion is giving discretion, and taking it away is taking it away.
Sorry but I see the exact opposite of this and I’m not sure it will ever change. Our legislators care more about the quantity, not the quality of the laws and seem more interested in virtue signaling and placating special interest groups rather than trying to make things better for the majority of Californians. That includes Speaker Rivas who will prevent bills from coming to the floor that he personally doesn’t like (or that lobbyists don’t want) even when they pass the other chamber.
So why isn't it routinely the case that a new law, especially one which gives some level of implementation discretion to an unelected agency, is outcomes-tied from the start? That is, why doesn't the legislature define an outcome or set of outcomes (like X more households on community solar per year, Y cost constraints, etc) and direct the agency in its legislation to manage toward that outcome, and mandate a review period after which the law sunsets if it isn't achieving that outcome? This is much more like the way successful private sector organizations operate (think KPIs) and it would systematize the good effects of these reviews much more thoroughly than this sample pilot program. What stands in the way of future California laws being written like this?
Such excellent questions! That's the direction we need to go, IMHO. Others like Marci Harris have written extensively on this.
The cynical answer is that a lot of laws are glorified statements of purposes as opposed to serious programmes of action
The answer is that the stated goals are not the true goals. I'm often reminded of Charlie Munger's famous maxim : “Show me the incentive and I'll show you the outcome.”
And if you want to know what the incentives actually are, Jennifer Pahlka has quite a bit on that.
"To be fair to the commission, it has an argument: paying community solar projects above wholesale rates can shift costs onto everyone else’s bills, the same concern that drove the rooftop solar fights. That’s a legitimate policy question that involves tradeoffs that someone has to decide between."
I am looking forward to the outcomes review in a decade or so when the legislature learns that the CPUC and the evil IOUs were correct about this. Maybe then legislators will finally realize the difference between (1) lowering the underlying costs of building and operating the grid and (2) shifting those costs between customers. Probably wishful thinking on my part.
Regardless, I appreciate the spirit of Speaker Rivas' Outcomes Reviews. This is excellent!
Outcomes review touches on something lawyers used to be trained in. Lawyers should know in general how to write statutes which are more likely than not to be effective. Something the legislators should anticipate how "wiggle room" can and cannot be used to change the outcomes. Or, in other words, whether ambiguous language is a good idea or not. Sometimes, you want to be less specific because you want agencies and courts to have flexibility to respond to facts on the ground. Sometimes, you want to slam the door shut for an agency or a court that wants to undermine your statute.
But, the reality is there is going to be a never-ending conversation between facts on the ground, agencies and courts. Something this country seems to have forgotten is statutes override court cases and agencies cannot legislate. The example in this article gets at this when it says the policy choice had been made by the legislature. However, because there was wiggle room in the statute, the agency could say it was implementing the law. At that point, if someone challenged the agency implementation, a court could interpret what the law said. If the legislature did not think the court correctly ruled on its intent, then it could revise the law to make that clear.
Outcomes review is a good way to make it clear that the legislature is going to do its job. Constant debugging is an excellent analogy. Legislators are only guessing at how a law will play out in real life. Once real cases start happening, then the legislature must revise the law accordingly.
Interesting to realize that many legislators don’t get/seek feedback on whether they’re good at lawmaking or how they might get better
Community solar is often touted as a way for renters or low-income households to benefit from renewable energy programs. It creates an option for customers who don’t own their homes (and roofs) to subscribe to an off-site solar project and receive credits on their electricity bill for a portion of the energy produced.
Although the California Public Utilities Commission (CPUC) has several existing community solar programs, AB 1813 would direct the CPUC to consider increasing project compensation, with the stated goal of promoting low-income participation by offering higher bill credits.
But AB 1813 risks raising bills for the same low-income customers that it seeks to help. The problem is that the credits it proposes are larger than the value that the solar provides to the grid, and those credits are paid for by customers that do not participate in the program. This is not a scalable or fair solution. And it exacerbates the inequity baked into the current rate structure.
California is paying extremely high costs to reduce wildfire risk, and because we recover those costs in volumetric electric rates, customers who live in hot places and use more electricity pay a disproportionately higher share of wildfire costs compared to customers who “use” less (especially in the case of customers who have installed their own rooftop solar systems).
Overcompensation means that customers that don’t participate in the AB 1813 program would likely pay an outsized share of wildfire and other grid costs.
It is difficult to predict how precisely how large the cross-subsidy of AB 1813’s community solar program would be, since it depends on enrollment, location of projects, and other factors. But a conservative estimate by my office indicates that AB 1813 would cost non-participants an average of $1.5 billion annually, which could equate to an increase of almost $12 per month on every non-participating customer bill. That is on top of the roughly $7 billion that non-solar customers are already paying for their neighbors’ rooftop panels each year, which raises bills by about 12-19 percent (depending on the utility).
While AB 1813’s stated intention is to expand solar savings to low-income Californians, the reality is that the many low-income customers who do not participate would see their bills rise as a result. For example, a household in West Fresno, which is already paying some of the highest electricity bills in the entire country, could be charged an additional $140 per year to cover the cross-subsidy created by AB 1813. For the many Californians living paycheck-to-paycheck or feeling the squeeze of higher grocery and natural gas bills, that increase is unsustainable. The larger the program grows, the higher their bills would rise. And like Net Energy Metering, once the program becomes widespread, it is difficult to scale back.
Expanding access to community solar doesn’t have to come at the expense of other ratepayers. In fact, under the current slate of CPUC programs, which create a much lower cross-subsidy than AB 1813 would, there are already 560 megawatts (MW) of community solar projects serving nearly 200,000 customers statewide, with another 430 projects under construction. Low-income households can see their electricity bills reduced by up to half, when combined with assistance programs like the California Alternate Rates for Energy and Family Electric Rate Assistance programs. For example, under the CPUC’s existing framework, Ava Energy and Prologis are partnering to bring 100 percent clean energy and meaningful bill savings to 3,000 income-qualified households across Alameda and San Joaquin counties with community solar projects sited on industrial warehouses.
As elected leaders work down to the wire of this legislative session to broker important affordability fixes, they should also carefully consider whether passing AB 1813 will deepen the solar cross-subsidy and undercut those efforts to support customer electricity bill affordability.
Cautiously optimistic about this development. It will be interesting to see whether the new law on solar will indeed lead to better outcomes.
I was thinking that for some laws, the implementation doesn't necessarily fall apart, but the time horizon to ramp up is so far in the future that by the time people have gotten to a point where the outcomes are manifesting, everyone has moved on.
Jen, the sentence I keep coming back to is the one after the hearing: the commission "finalized its version of the program in June, largely unchanged. So this is now a standoff." The review did what it was built to do. It assembled the whole record in one place, once, at a public moment. Then the record went back to being nobody's. The agency's answer to the review has the same shape as its answer to the law, and no venue writes that answer down with a date.
You call this debugging, and a bug has states: open, assigned, answered, fixed, won't-fix, and no response, with an age. The June order is an answer, not a resolution. A won't-fix with the cost-shift argument attached would be an honest disposition. A standoff is neither. The FAIR Plan offers "dying somewhere with a broker" are the same object one level down: delivered, never received, and nobody dating the gap.
What would let a member stick with an issue without depending on their attention is a record the reviewing office keeps after the hearing: one line per finding, its state, and how long it has sat there, published in the fall report.
I keep that record for safety reports I have filed with agencies. "Responded" and "disposed" turn out to be different columns, and the age of the silence is the number nobody else counts. If the Speaker's report already tracks each finding by state and age, I'm wrong and glad.
Jennifer-- I very much appreciated your framing here. Especially that part that says "We need to build the muscle for saying that when things aren’t on fire. ... When things work well, it’s usually not because they were designed perfectly, but because they are constantly being debugged."
The outcome review (or whatever we call it) should be a continuous process. And, yes, that'd be hard since it'd require admitting failure, spending resources for the outcome review etc, which all require public trust. But, without all of this, how can we build that so-much-needed trust with our communities? Delivery is a vehicle for trust building. And delivery requires understanding what's working and not working.
I concur that the outcomes review is a good process. However, this story about the community solar bill seems to be an act of legislative control to remove discretion from the agency. This seems to conflict with some of your ideas in Recoding America where the problem would often be that policymakers wrote laws that were too rigid and didn’t allow for agency/staffer flexibility. Could there be agency staff at CPUC who had good reasons for not implementing this that didn’t make it up the waterfall? Hard to say.
I get that the core conceit of this example was that the tires weren’t connected to the steering wheel. I just wonder if this granting and revoking of discretion is not really a solvable problem, but a condition of if we as observers like the law or not.
When the Trump administration passes a law we don’t like, we are happy when the agency slow rolls it or drowns the implementation in procedure. When they block a Biden law we like from implementation, we think it’s bad.
Ultimately, giving discretion is giving discretion, and taking it away is taking it away.
How can a Ca citizen track these outcome reviews in real time and participate and/or comment where appropriate?
Sorry but I see the exact opposite of this and I’m not sure it will ever change. Our legislators care more about the quantity, not the quality of the laws and seem more interested in virtue signaling and placating special interest groups rather than trying to make things better for the majority of Californians. That includes Speaker Rivas who will prevent bills from coming to the floor that he personally doesn’t like (or that lobbyists don’t want) even when they pass the other chamber.
Thank you for your wisdom.