In 2015, Yolo County Housing (YCH) included goals around energy efficiency and solar panel installations in the Agency’s Annual Plan Update required to be submitted to the Department of Housing and Urban Development (HUD) after being reviewed by residents and approved by the Commission.
To help achieve the goal, YCH contracted with Siemens Industry Inc to analyze potential energy efficiency opportunities at all public housing sites. This analysis led to three programs that were anticipated to reduce water and electricity costs. One of the programs was to replace all toilets throughout the public housing sites with low flow toilets to reduce water consumption and costs, and another was to replace old light bulbs with LED bulbs throughout to reduce electrical costs.
The third program was installation of solar arrays at four YCH sites (El Rio Villas, Yolano, Donnelly, and Riverbend Manor). YCH received funding from a PG&E program called MASH in 2016 to install solar arrays at the four public housing sites it operates. The original MASH application was for a portion of the program called Track 1D incentives. Track 1D provides incentives for sites based on the owner proving the solar panels would reduce electricity costs by 50% or more for the residents. This would have provided $963,242 in funding for the installations at the four YCH sites. PG&E cancelled YCH’s application without warning in October 2015 stating that there was a lack of adequate information. YCH and another public housing authority who experienced the same issue filed a claim against PG&E and had the application restored, but at the lesser level of funding called the Track 1C incentives. The settlement agreement for Track 1C funding was approved by the YCH Commission on June 29, 2016, and covered a smaller portion of the installation and ongoing maintenance costs of the arrays, $588,648. This necessitated YCH obtaining a lease-purchase funding agreement in 2017 for the total cost of $2,889,665 with a 3.18% interest rate, which was approved by the YCH Commission on May 24, 2017.
In the PG&E application there was an agreed upon percentage of solar power generated that would be allocated to each unit at the four sites and none of the solar power generated would go towards common areas of the sites which YCH is responsible for, therefore allocating all savings generated directly to residents offsetting their PG&E costs. In order to pay down this debt service over the 15-year agreement term, YCH bills residents a monthly solar amenity charge at a significantly reduced rate from their PG&E rate which ensures that even when combining the PG&E costs and the YCH solar amenities charge, residents are still receiving a benefit from the solar panels.
The solar panels were installed in late 2018 and came online producing power in January 2019. Since being installed, YCH has tried two different methodologies of receiving solar amenities payments from residents. After receiving feedback from residents about the confusion from receiving a PG&E bill and a YCH bill, in August 2019 YCH took over all PG&E payments for the resident units, would pay PG&E and send 1 invoice monthly to the resident that included their PG&E electricity charges and their solar amenities charge. This is a very uncommon practice for landlords and owners due to the fact that it essentially makes the landlord/owner an energy company which necessitates many different rules and regulations outside of tradition landlord/resident relationships and it also puts the landlord/owner in a very vulnerable financial position where they are covering all PG&E costs without guaranteed payment from the residents.
Recognizing these issues, in November 2020 YCH returned to the previous practice of having residents be responsible for their PG&E costs which is the most comment practice among landlords/owners, and YCH would send a monthly solar amenity charge invoice to residents. The monthly solar amenities charge invoiced to residents used the same percentage of power generated multiplied by a rate far below PG&Es rate, and this is what would be sent in a monthly bill to the resident. As an example, in January 2021 shortly after switching back to this methodology PG&E’s average rate was $0.27/kWh and YCH’s rate to bill the residents for the solar amenities charge was $0.21169/kWh generated. YCH billing staff would receive the total amount of power generated by each array monthly, they would multiply this by the percentage allocated to that specific unit as outlined in the original PG&E MASH application (attachment A pages 8-16, 30-35, 48-50, 64-66, 78-81) and apply this amount for the resident’s monthly solar amenities charge. This process is cumbersome for YCH finance staff which had resulted in bills being sent out timely, and challenging for residents because the amount varies each month based on how much solar power was generated that month making it difficult to plan for the cost.
In 2021, YCH was already experiencing challenges with large amounts of back solar charges owed to the agency due to lack of payments from residents. Recognizing the hardship that so many were facing in 2021, the New Hope Board approved a loan forgiveness program of up to $70,000 total for residents that had back solar charges due. In total, 84 loans were given totaling $52,678.42.
In 2023, YCH had several new personnel on staff and new leadership who began looking at the solar process, how it was set up, reviewing past billing, agreements, and trying to determine if a better process could be implemented. Leadership met with Legal Services of Northern California, YCH Counsel, and connected with the California Public Utilities Commission (CPUC) throughout this process. Our goal was to create an easier to understand process for everyone involved, to find a way to make the monthly solar amenities charge a consistent amount for each unit, to clarify language in the lease around the solar amenities charge, and to increase the number of residents paying their solar amenities charge each month because of the significant amount due by residents of past charges across all four sites.
In addition to connecting with the entities listed above, YCH staff reviewed the last 3 years of monthly charges and average energy produced at the four arrays during that same period. Staff landed on the solution of a flat monthly solar amenities charge based on site location and bedroom size. As shown on the solar charges analysis sheet (attachment B), the flat rate monthly solar amenities fee by bedroom size is slightly less than the average monthly solar amenities charge residents were receiving based on the previous billing methodology. This approach allows for a known monthly amenity charge which helps budget more effectively because they can plan for their monthly charges just like they do with rent, it expedites the billing process for YCH staff by removing the need to calculate charges based on different figures every month for the 319 units receiving solar power, and it allows for more concrete language in the resident lease because there is known, fixed amount based on bedroom size at each location.
To ensure effective communication with residents regarding this new methodology and to discuss outstanding solar charges owed by multiple residents, staff setup resident meetings at each site the first two weeks of March to review the new approach with residents that went into effect April 1, 2024. Letters were posted at all four sites at least one week in advance of the meetings (see attachments C, D, and E) along with the new flat monthly solar amenity charge (see attachments F,G, H and I), a reminder was sent to residents regarding the addendum to their lease to align with the new approach following these meetings (see attached J).
Additionally, individual meetings are ongoing with residents to sign the addendum (attachments K, L, M and N), review their ledgers, and sign repayment agreements for those who had past amounts owed to YCH. There are currently 251 residents who have some level of past due solar charges, totaling $217,916 from current residents. To date, staff have engaged with 20 residents to sign repayment agreements and/or secure repayment assistances. Staff are working with residents in these individual meetings to connect with programs in the County to help pay down some of their back due amounts. Staff will continue these meetings until all 251 residents have been engaged.
During the resident meetings, residents brought up concerns that they never received information about the solar panels before they were installed, there was never any approval from residents before installation, there was no benefit in having the solar panels, residents are paying more for electricity now than before the panels were installed, and there was confusion around receiving both PG&E bills and YCH bills.
The above summary helps address many of these concerns and the presentation will review all of these concerns. Additionally, it should be noted that from 2015 to present there were 14 resident meetings where solar was discussed, 11 times where written communication was sent to residents regarding solar information, and there were at least 8 times the Commission received information regarding solar during this period, including the approval the PG&E MASH settlement, the lease-purchase agreement, and the New Hope Board’s approval of a loan forgiveness program in 2021. The financial benefit to residents is captured in the PowerPoint presentation and in two charts below. While it is true that residents are paying more for electricity now than before the panels were installed the two issues are not linked and is a result of PG&E significantly raising rates over the last 5 years, going from $0.23/kWh in January 2019 to $0.45/kWh in 2024.
Staff believe that the new flat monthly solar amenity charge process should help reduce confusion regarding the billing process as it allows for bills to be sent in a timely manner and include a known amount that residents can expect and budget for. Property managers and client services staff will continue to meet with residents individually as needed to setup repayment agreements, address any concerns or discrepancies, and work towards improving payment timely to avoid evictions.
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