SSDA Today - Fall/Winter 2016 - 20

NEWS AND NOTES Small Schools Engage Battle Over Utility Rates BY LISA SALISBURY LEGISLATIVE ADVOCATE SAN DIEGO COUNTY OFFICE OF EDUCATION S mall school districts all across California have been experiencing huge utility rate increases over the past few years prompting important legislative action that started among districts in San Diego County. Gina Potter, the Assistant Superintendent for Business in Lemon Grove School District in San Diego County joined with colleagues across her county in a coalition of more than 40 districts, mostly small, to take on the powerful utility industry. Because school districts have few options for increasing revenue in response to increased operational costs, the unanticipated, unannounced surge in utility costs directly undermine the fiscal recovery of schools and targeted objectives of the Local Control Funding Formula (LCFF). For instance, the San Diego county school districts estimate that they experienced on average a 39% increase in electricity costs in 2014-15, for an estimated year-over-year increase of about $30 million for all county districts. More importantly, this means that the electricity cost increases consumed an estimated 19% of the school districts' 2014-15 increase to their LCFF base grants. This kind of cut to funding is particularly unsustainable for small school districts, and impedes their ability to achieve the main objective of the LCFF to improve services for students. Another effect of these rate increases is that school districts have become apprehensive about implementing new solar projects due to the threat to the economic viability from proposed changes to solar rate structures. Currently, the only mechanism available to school districts to protect their investments in solar and thwart efforts to substantially increase electricity rates is to intervene in proceedings before the California Public Utilities Commission (CPUC), but school districts - especially small districts - are in no position to front legal fees of $150,000 to $300,000 for legal and rate expert services that are necessary to intervene in CPUC proceedings. The Coalition therefore worked with Assembly Member Shirley Weber (D) San Diego and Senator Ben Hueso (D) San Diego to 20 SSDA TODAY | FALL/WINTER 2016 introduce bills that would provide some economic relief. Assembly Member Weber introduced AB 2120 to ensure that school districts can obtain reimbursement for costs associated with intervening in proceedings before the CPUC. The Coalition also approached Senator Hueso to run legislation that would establish a separate customer class rate for school districts to recognize their unique electricity usage profile and inability to increase revenue in response to higher operational costs caused by factors beyond their control, which emerged as SB 1041. Although these bills face strong opposition from utilities companies, they have passed through every committee so far. AB 2120 has survived with minor amendments and will next be heard in the Senate Appropriations Committee in August. During its most recent hearing before the Assembly Utilities and Commerce Committee, however, Senator Hueso had to take significant amendments to SB 1041 or the bill would not have passed through committee. After heavy lobbying from the utilities, several committee members became uncomfortable with the new proposed rate structure. Their concern centered on whether schools, particularly those served by municipal utilities, would actually be charged higher rates under the proposed cost-causation methodology. The bill, as it will be amended, now calls for a study on school electricity rates. Specifically, the amended bill would require the CPUC to consider the effects of establishing a rate for electric service specific to public elementary schools, taking into consideration (1) the extent to which the average electric bills paid by schools will increase or decrease and (2) the consistency between establishing such a rate and other statutory obligations and state policies. While a study delays relief for schools, it may be a necessary step in order to establish a rationale for a separate rate structure in the future.

Table of Contents for the Digital Edition of SSDA Today - Fall/Winter 2016

Executive Director's Column
New Federal Guidance on Transgender Bathroom Access
List of Initiatives Headed to November Ballot Long and Diverse
Ballot Measure Wild Card: Gov. Jerry Brown
What Every Leader Needs to Know about Technology: Education Innovation Alliance
Is Your Compensation “Creditable” Towards Retirement? New CalSTRS Regulations Seek to Further Clarify the Answer
Super Strong: The Extraordinary Nature of Leadership Resilience
News and Notes
Advertiser's Index

SSDA Today - Fall/Winter 2016