Dive Brief:
- San Diego Gas and Electric, Pacific Gas & Electric, Southern California Edison, and the California Solar Energy Industries Association (CalSEIA) have all filed plans with the California Public Utilities Commission (CPUC) on the future of net energy metering (NEM) and what the appropriate remuneration should be for distributed energy-generated electricity sent to the grid.
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The utilities proposed below retail electricity rate remuneration for distirbuted power sent to the grid. Their proposals range from $0.08 per kWh to $0.11 per kWh, while their average retail electricity rates range from $0.15 per kWh to $0.23 per kWh.
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CalSEIA and other solar advocates want the current retail rate remuneration plan extended through 2019 while the solar industry adjusts to the expected 2016 reduction in today’s 30% federal investment tax credit to 10% for commercial and third party solar and zero for residential solar.
Dive Insight:
A recent CPUC ruling created a new electricity rate structure that imposed a $10 minimum monthly bill. Utility filings would add fixed grid access fees, demand charges based on peak consumption, time-of-use pricing, and interconnection charges for solar owners.
The filings were submitted as part of the CPUC’s NEM 2.0 proceeding required by California's landmark Assembly Bill 327 (AB 327), passed in October 2013. The law requires a new rate by the end of 2015.
Stakeholders have spent two years preparing for this showdown. Utilities want solutions that prevent shifting the cost for distributed generation (DG) and transmission infrastructure to non-DG owning customers.
The utilities argue their provisions would meet AB 327 dictates by sustaining DG growth while protecting customers who do not own DG. Solar advocates say they will erode the solar value proposition.
The law requires the new remuneration rate for solar energy-generated electricity sent to the grid to be implemented by mid-2017 or when the California grid reaches a 5% NEM solar penetration, whichever comes first.
