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Tuesday, December 06, 2022

California Public Utilities Commission Criticizes New Rooftop Solar Proposal

Solar industry advocates argued during a special hearing Wednesday by the California Public Utilities Commission that a proposal that would affect the 1.5 million customers with solar power on their roofs goes too far, while the big three power companies in the state Insisted that it doesn’t go far enough.

For more than two hours, five voting members of the commission heard oral arguments from about 30 groups, including the solar industry, state investor-owned utilities, environmental organizations and advocacy groups, which criticized an updated proposal published last week.

In short, solar advocates told commissioners that the new plan is better than the one presented in late 2021, but said that unless the new version is revised, the proposal could undermine progress on rooftop installations in the state. Is.

“Making changes too quickly will result in too much damage,” said Brad Hevner, policy director for the California Solar Energy and Storage Association.

But the utilities said the proposal “goes on a very long trajectory when immediate action is needed,” said Susan Tierney, speaking on behalf of Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison.

The problem is NEM (net energy metering), that is, rules that determine the amount of credit customers can receive on their utility bills when their rooftop solar system generates more energy than it consumes.

California’s NEM standards haven’t been updated since January 2016, and the commission has been working on an update, colloquially referred to as NEM 3.0, for years.

A proposal was submitted in December 2021, but it was met with fierce opposition from solar energy advocates, in particular, a provision to create a flat fee of $8 per kWh on solar systems for residential customers. Since typical rooftop installations are 5 to 6 kW, that would be $40 to $48 per month.

A Public Utilities Commission administrative law judge last week issued a new motion eliminating the monthly fee, adding that any discussion of it would be part of a separate hearing before the commission, known as the CPUC for short. goes.

But the new proposal — in its 241 pages of details — would change the way solar customers are compensated for the extra electricity their systems send to the grid. Instead of paying the retail rate for electricity, customers would receive a lower “real avoided cost”.

The California Solar Energy and Storage Association calculated that the average rate would drop from 30 cents per kWh to 8 cents, a reduction of 75 percent.

A vote on the new proposal is set for December 15. A majority vote of five CPUC commissioners is required to approve a rule change.

Utility companies argued that the fixed charge should be reinstated in the new proposal, arguing that the increased number of installations would unfairly pass on the fixed costs of maintaining the electrical system, such as cables, substations and transformers, to customers without solar. You have to give your share.

“Moving forward with a fixed fee is inequitable and (the breakthrough proposal) should be amended to adopt a fixed fee immediately,” said Carla Peterman, PG&E’s executive vice president. This “price change,” Peterman said, runs into the billions of dollars and particularly hurts low-income customers who can’t afford solar systems, which can cost thousands of dollars.

Proponents of solar power dispute the cost-shifting argument, claiming that the megawatts generated from rooftop installations reduce pressure on state power grids and reduce the need to build more electricity infrastructure.

“I think it’s important to take a long-term view,” Hevner said during a question-and-answer session on Wednesday. “If we reduce the capacity to install clean energy in the communities where we are going to add electric vehicles and charging, it will hurt us in the long run as we move toward 100 percent clean electricity.”

The debate over updated rules for rooftop solar comes at a time when California policymakers have set a goal of getting 90 percent of its electricity from clean sources by 2035 and 100 percent by 2045.

Ben Schwartz, policy director for the Clean Coalition, said the proposal “conflicts with California’s high costs, inflation, skyrocketing electricity rates, supply chain issues, and doesn’t effectively encourage more deployment[of solar]in key communities.” It does. As it stands, this will not lead to sustainable development of renewable resources.”

Others argued that California should place more emphasis on utility-scale projects such as solar power plants.

“We can build 10 times more capacity for the same cost with large-scale solar and storage, which is going to create more jobs,” said Rachel Kos of the California Coalition of Public Service Employees.

The CPUC’s independent consumer group has welcomed the proposal.

“The proposed decision augments the existing framework,” said Matt Baker, director of the Office of the Public Defender. “This would reduce the pass-through to new solar customers by approximately $1.8 billion per year through 2030.”

But Matthew Friedman, an advocate with The Utility Reform Network, or Tern, a San Francisco-based consumer group, expressed concern about rising costs for all taxpayers, whether or not they have solar on their roofs. He said the proposal is based on a 4 per cent per annum increase in electricity tariffs across the state, when the CPUC had recently estimated that rates were increasing by 9 per cent every year.

“The question is not whether we are going to decarbonize the grid, but how do we do it, how much will it cost, and who will foot the bill,” Friedman said.

If the proposal is approved, its provisions would become effective in 120 days, or April 15, and would affect new solar customers.

As far as its potential impact on existing customers, it’s a bit trickier.

Solar customers who had systems installed with NEM 1.0 and NEM 2.0 will continue to be compensated at the retail rate for 20 years from the time their systems were installed, before they are based on costs avoided.

For example, an existing NEM customer who had a system installed in 2018 will continue to pay the retail rate until 2038. But after that, the deferred cost will be paid.

The CPUC proposal states that the change more accurately reflects the value when excess solar power is fed back into the grid. In other words, solar power returned to the state’s electric system during night hours – when the grid is under most stress – is more valuable than during daylight hours, when many megawatts are available on the grid. Huh.

Prior to hearing oral arguments, CPUC Chair Alice Bushing Reynolds delivered a keynote address. He said the newly proposed decision is aimed at encouraging customers to combine their solar installations with a battery storage component that can offset their bills and help the power grid at the same time.

The CPUC estimated that “solar plus storage” could save residential customers across the state at least $136 per month, and estimated that customers would fully pay for their systems in less than nine years, compared to utility customers. Took 4.7 years. SDG&E.

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