California regulators propose minor changes to net metering 2.0

28. January 2016 | Financial & Legal Affairs, Markets & Trends, Top News | By:  Christian Roselund

On the eve before the vote on the successor program to net metering, CPUC produced a new Proposed Decision with minor changes but kept retail-rate net metering mostly intact.

Advocates say the new Proposed Decision will allow California to remain the national leader in rooftop solar

On Wednesday afternoon the California Public Utilities Commission (CPUC) issued a new Proposed Decision on the successor program to net metering in the state, which advocates say looks a lot like the earlier Proposed Decision despite utility attempts to force major changes. This new proposal will be voted on by CPUC in a meeting which begins Thursday morning at 9:30 AM Pacific Time.

California Solar Energy Industries Association (CalSEIA) says that the changes are mix of clarifications and minor changes that are not in the industry’s favor but not fatal. In the industry’s favor, CPUC has deleted a footnote from the December Proposed Decision which suggested that the “non-bypassable charges” to be subtracted from the credit rate for electricity from customer PV systems should include transmission costs.

This means that these non-bypassable charges will be $0.02-0.023 per kilowatt-hour, instead of possibly as high as $0.04-0.05/kWh if transmission costs were to be included. CalSEIA Executive Director Bernadette Del Chiaro says that this level of non-bypassable charges, which include grid upkeep, costs for energy efficiency and programs for low-income ratepayers, are not the end of the world for solar PV system owners.

“You can subtract one or two cents from retail, and we can tighten our belts and deal with it,” Del Chiaro told pv magazine.

However, CPUC had gone further with proposals to implement mandatory time-of-use (TOU) rates. Whereas the previous Proposed Decision would phase in TOU rates, it now states that mandatory TOU rates will take effect as soon as the program begins in the service areas of utilities PG&E and SCE, which cover most of the state.

For San Diego Gas & Electric Company (SDG&E) customers, solar PV system owners under net metering 2.0 can remain on tiered rates for the first five years after the new TOU rates are approved in early 2017, before transferring to mandatory TOU rates. Del Chiaro notes that it is not clear yet what those rates will be. “The tariff hasn’t really even been revised,” she observes.

Non-bypassable charges have also been applied to PV systems that operate under virtual net metering. Because these systems are considered to export 100% of the electricity they produce, they will pay a much higher portion of non-bypassable charges than other net metered systems, where the charges only apply to electricity exported to the grid, not consumed on-site.

Finally, the new Proposed Decision removed language that adopts in principle a community solar program for disadvantaged communities. CPUC did not consider many of the requests by utilities for changes to the decision, including proposals to make the changes apply to PV systems installed under the previous net metering rules.

Overall, Del Chiaro says that the changes to the policy are workable, and that she hopes that the new Proposed Decision will be voted on without further changes on Thursday. She also notes that unlike the previous net metering arrangement, there will be no cap on the amount of solar that can be installed under the new rules.

“We’re still walking away with net metering essentially intact, and uncapped - by statute,” notes Del Chiaro. “It is California saying we want to continue to be the #1 place for solar.”


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