- Utility companies, the solar industry, environmental groups and taxpayer advocates in California remain deeply divided over a proposal by the state Public Utilities Commission to reform its net energy metering framework, oral arguments before the commission on Wednesday revealed.
- While The solar industry is supporting the transition to a set of export net energy metering levels well below current levels. “Changing too quickly will do too much damage,” said Brad Heavner, policy director at the California Solar & Storage Association during the Wednesday session.
- But Carla Peterman, executive vice president of corporate affairs at Pacific Gas & Electric Co., told regulators the clock is ticking as estimated costs shift from NEM customers to those who don’t participate in NEM is likely to top $5 billion when the new tariff goes into effect. “It was $3 billion when you started this process — let’s not hesitate,” Peterman said.
Last week, the CPUC published the latest version of its proposed amendment The California Net Energy Meter Tariff, which is moving to a system of net billing where the retail export compensation rate — what customers are paid for the energy they export back to the grid — is based on the value systems behind the meter provide that grid. The solar industry resisted the first proposal the CPUC published last December and was eventually shelved.
The revised proposal would ease the transition to the new tariff by applying a five-year “glide path” methodology that increases the export refund by a fixed amount. In addition, it would include retail import tariffs for electrification, with a large differential between winter and summer tariffs, which regulators hope will encourage customers to shift their energy consumption to mid-day and export electricity in the evening, which is what it promotes the use of storage coupled with solar.
Solar industry officials warned that the proposal could still hurt the sector. The Solar Energy Industries Association has concerns about the proposal’s strategy of getting the industry to transition from solar to solar-plus-storage as the main product. said Sean Gallagher, SEIA’s vice president of government and regulatory affairs, at the meeting.
“Other states that have introduced a similar export compensation rate cliff have seen a sharp slowdown in the pace of solar deployment,” said Gallagher. “A similar decline in California would be counterproductive.”
According to Katherine Ramsey, attorney for the Sierra Club, rooftop solar will play an important role in helping California meet its climate goals. To meet the goals outlined in a California Air Resources Board scoping plan, “we must exceed our best year of solar deployment by 60% and sustain that pace for the next decade. Solar panels on the roof can and must play a role in this deployment,” she said in a meeting.
Ramsey said the proposed decision is a significant improvement over the previous version, but she recommended that regulators make changes, including by adopting a more gradual glide path with downward movements based on installed solar capacity instead of time.
“NEM reform in other states shows that you can maintain stable solar deployment by reducing solar export values with gradual and predictable declines,” she said.
On the other hand, PG&E’s Peterman urged regulators to consider introducing a fixed fee to address cost sharing inequalities between NEM and other customers. She also recommended other changes to the proposed resolution, including making “solar roof support” more transparent.
“In particular, the decision should require utilities to report annually on the level of NEM subsidies using the methodology used by the Commission in this decision” and share that information with customers and policymakers, Peterman said.
The Natural Resources Defense Council broadly supports the CPUC proposal, Senior Scientist Mohit Chhabra told regulators. Retail food supplement prices in California have grown well beyond the value of clean distributed energy, he said.
“It raises prices for everyone. High interest rates and bills are hampering our decarbonization goals by making it harder for Californians to adopt clean electric cars and appliances,” Chhabra added.
Matthew Freedman, a lawyer with the fee-paying group The Utility Reform Network, expressed disappointment that the proposal fails to reduce the “rapidly growing share of retail fees that all customers pay to subsidize participants in the net metering program.”
This cost shifting will increase significantly in the coming years under the modest reforms proposed by the commission, Freedman said. The proposal doesn’t account for key developments that will reduce the payback period for new rooftop solar customers, including new and expanded federal tax credits, he said.