California regulators preserve retail rate net metering in 3-2 vote

Dive Brief:

  • The California Public Utilities Commission on Thursday voted 3-2 to preserve retail rate net metering for rooftop solar systems, adopting a Proposed Decision released last month with a few notable revisions. 
  • The decision is a victory for rooftop solar installers in the state, which lobbied the commission to preserve retail rate remuneration for solar facilities that send excess power back to the grid. The state's utilities filed an alternative proposal last week that sought to reduce net metering rates. 
  • The dissenting commissioners expressed frustration with revisions to the Proposed Decision, released only last night, that removed increases to non-bypassable charges for solar owners. Commissioner Carla Peterman, who voted for the measure, said the commission would have to revisit the issue and lower remuneration rates by 2019.

Dive Insight

The CPUC decision to preserve retail rate net metering comes at a time that regulators in other key solar markets are rolling back remuneration rates. In October, Hawaii regulators eliminated retail rate net metering for residential solar customers, replacing it with two new remuneration options for customers. Last month, Nevada regulators also rolled back net metering rates, a move that some sector insiders attributed to aggressive solar lobbying tactics throughout the policy debate. 

California commissioners largely kept the original proposed decision issued in December that preserved retail rate net metering, while rejecting the state's utilities bid to lower retail remuneration rates and add monthly fixed fees and demand charges for rooftop solar users. 

Commissioners Florio and Sandoval, who voted against the measure, spoke out against last-minute revisions to the Proposed Decision. 

The biggest sticking point was deleting a footnote in the original proposed decision that suggested non-bypassble charges should incorporate transmission costs. That would have raised the charge from $0.02-$0.03/kWh to $0.04-$0.05/kWh, PV Magazine reported yesterday.

Non-bypassable charges are used to fund low-income and efficiency programs in California, but historically have not been paid by net metering customers unless they use more electricity from the grid than their PV systems produce. 

Another modification makes time-of-use (TOU) rates mandatory for new rooftop solar users in the Pacific Gas & Electric and Southern California Edison territories, instead of phasing them in until 2019, when all residents are required to go on TOU rates. Solar owners in SDG&E's service territory will be allowed to remain on the utilities' tiered rate structure for five years after new TOU rates are approved in 2017. 

The new solar net metering program will begin in 2017, or as soon as net metering caps are reached in each utility service territory.

Earlier this month, the three major investor-owned utilities in California proposed an alternative to how distributed users are compensated for sending excess energy to the grid. At the time of the original proposed decision in December, the utilities critiqued the proposal for not adequately address potential cost-shifts. 

Now that the decision has been approved, the utilities have 30 days to file plans detailing the exact amounts for the fees. The CPUC previously estimated that interconnection fees will range between $75 and $100 and that non-bypassable fees will amount to an additional $5 each month on solar customers' bills.

Correction: A previous version of this article stated that TOU rates would be made mandatory for all rooftop solar customers in the PG&E and SCE territories. That is incorrect. The rates will only be mandatory new rooftop solar users interconnecting in those utilities' territories under the successor tariff. ‚Äč

Recommended Reading

California Public Utilities Commission: Proposed Decision: Order Instituting Rulemaking to Develop a Successor to Existing Net Energy Metering Tariffs Pursuant to Public Utilities Code Section 2827.1, and to Address Other Issues Related to Net Energy Metering.


Top Image Credit: GraphicStock

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Regulation & Policy