Solar Industry Rejoices as California Regulators Approve Net Metering Successor Program

The California Public Utilities Commission in a Jan. 28 open meeting voted 3-2 to approve a net metering successor program for rooftop solar in the state.

During the meeting, Commissioner Michael Picker, president of the CPUC, said the successor program maintains a full retail net energy metering (NEM) structure that allows all customers to receive full credit for renewable energy that they export to the grid, but also establishes mandatory time of use (TOU) rates for those customers.
“By requiring NEM customers to take time of use rates, we’re setting a stage for a marketplace where rooftop solar is also designed to meet the needs of the grid,” Picker said.
The CPUC voted on an amended proposed decision that was released on Jan. 27. The amendment updated a proposed decision issued in December 2015 that was approved by the CPUC and largely applauded by the solar industry.

Bryan Miller, senior vice president of public policy and power markets at Sunrun and president of The Alliance for Solar Choice, said of the CPUC’s decision: “Sunrun commends the Commission for upholding net metering and protecting solar choice for Californians. While today’s decision is a compromise that will require the solar industry to adapt, it rejects the utilities’ anti-solar proposals and continues California’s renewable energy leadership.”

During the meeting, Picker said that the successor program allows NEM customers to stay on their time of use rates for five years “in an effort to provide certainty to those customers that are taking NEM prior to the adoption of TOU rates of all customers in 2019.”
The concept of TOU rate plans allows a utility to charge customers a higher rate for electricity when demand is higher, thereby incentivizing customers to reduce usage during peak periods of demand. In 2015, the CPUC mandated that the state’s major utilities switch to TOU rates for all customers in 2019. In making its decision, the CPUC set out a time frame for utilities and regulators to work through what those TOU rate programs will look like in the lead up to the full switch in 2019. Proceedings at the CPUC for developing those TOU rate programs are ongoing.
In the approved decision, the CPUC said that it will review the NEM successor program in 2019 to coincide with the launch of the utilities’ default TOU rate programs for all customers.
Picker said that the CPUC’s decision also adopts a “modest” cost-based interconnection charge so net metering customers “pay their fair share of the cost to connect their solar systems to the grid.” It also expands NEM to include generators with systems larger than 1 MW, and it sets a policy on nonbypassable charges (NBCs).
Picker added that a lot of controversy emerged late in the process over what charges actually should be included as NBCs.
A Sunrun spokesperson told that the NBCs, as originally proposed in the CPUC’s initial decision, would amount to about 2-3 cents per kWh. There was some discrepancy in the text of the proposal about those charges, and Picker made adjustments to the amended proposed decision issued on Jan. 27 that would ensure the NBCs were in line with the 2-3 cent per kWh estimate, she said.
Among the NBCs under question was a transmission charge that was ultimately removed in the amended proposed decision.
“Having transmission included was completely inconsistent with all of the public communications from PUC staff and with the record,” the spokesperson said.
Commissioner Mike Florio, who voted not to approve the proposed order, said during the open meeting that he did not like the last-minute exclusion from the proposed order of transmission charges under NBCs, and that that change tipped his decision away from approving the decision.
“I thought their imposition was a fair offset for the advantage that solar vendors gained through the extension of the investment tax credit [in December],” he said.
SunEdison President and Chief Executive Officer Ahmad R. Chatila applauded the integrity of all parties that contributed to the proceedings.
“We firmly believe that today’s decision is an important step forward and will help build a stronger, more robust electricity grid which delivers clean, cost effective energy to all of the citizens of California, he said.
Editor’s note: This article was updated on Jan. 29 at 5:00 p.m. EST with comments from Sunrun.

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Jennifer Delony, analyst for TransmissionHub, started her career as a B2B news editor in the local and long-distance telecommunications industries in the '90s. Jennifer began covering renewable energy issues at the local level in 2005 and covered U.S. and Canadian utility-scale wind energy as editor of North American Windpower magazine from 2006-2009. She also provides analysis for the oil and natural gas sectors as editor of Oilman Magazine.

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