The 2022 changes to California’s net metering tariff, which substantially reduced the price utilities pay for customer-generated power, were upheld Monday by a decision from the California First Appellate District Court of Appeals.
The petition to review the net metering changes was filed by the Center for Biological Diversity, Environmental Working Group, and the Protect our Communities Foundation, against the California Public Utilities Commission, which adopted the tariff.
The same appellate court first heard the case in 2023 and ruled against the groups then, saying that the scope of its review is limited, and a strong presumption in favor of the commission’s decision exists. The case reached the California Supreme Court, which sided with the plaintiffs and knocked the issue back down to the appeals court last August.
The updated net metering rules, known as NEM 3.0, were linked to a downturn for residential solar in the state. A November 2023 report from the California Solar and Storage Association linked them to a 77% to 85% drop in residential solar sales from 2022.
The plaintiffs argued that the new tariff did not comply with section 2827.1 of the CPUC’s code and did “not take account of the social benefits of customer-generated power, improperly favors the interests of utility customers who do not own renewable systems, fails to promote sustainable growth of renewable energy, and omits alternatives to promote the growth of renewable systems among customers in disadvantaged communities.”
The appellate court reiterated in its opinion that in this matter, the scope of its review is limited, and a strong presumption in favor of the commission’s decision exists. “Applying the applicable deferential standard of review, we conclude the successor tariff adequately serves the various — albeit sometimes inconsistent — objectives of section 2827.1 and thus affirm,” the opinion said.
“And petitioners do not sufficiently describe the benefits of the tariff that the Commission purportedly failed to quantify,” the court said. “Instead, they make vague reference to benefits of the renewable electrical generation facility cited in their [section 2827.1] argument, including benefits of consumers generating renewable energy on-site and other ‘societal’ benefits.”
The court said it doesn’t see how “recharacterizing these as benefits of the tariff” backs up the plaintiffs’ assertion that the commission’s decision went outside of the lawmaking authority designated by the legislature’s enactment of section 2827.1.
Section 2827.1 set out requirements for CPUC’s development of the tariff, including requiring that it “ensures customer-sited renewable distributed generation ‘continues to grow sustainably,’ and that the Commission include specific alternatives designed for growth among residential customers in disadvantaged communities,’” the court said.
The plaintiffs argued that NEM 3.0 failed to fulfill these statutory obligations, but the court knocked this down, saying, “They fail to persuade.”
