The California Public Utilities Commission (CPUC), the entity responsible for regulating the investor-owned electric and gas utilities in California, has launched a proceeding to re-evaluate the current net energy metering (NEM) program and decide upon a new NEM program, to be established as NEM 3.0.
Simply put, NEM is the program that allows rooftop solar customers to be compensated for the excess electricity they send back to the power grid. NEM, paired with solar financing and ratepayer funded incentives, has allowed solar to become increasingly accessible to low-and-moderate income families across California.
California Investor Owned Utilities (IOUs), Pacific Gas and Electric, San Diego Gas & Electric and Southern California Edison have submitted a joint proposal that calls for drastic changes to NEM that would make solar energy more expensive, increase the amount of time it takes for customers to pay off the system and ultimately has the potential to eliminate the California solar market.
For a deeper dive on NEM in California, please visit our blog on the history of NEM.
A total of 17 party proposals were submitted to the CPUC for consideration early this year. Each proposal is required to demonstrate the cost effectiveness of their proposal as well as adhere to the guiding principles put forth by the CPUC. These guiding principles include:
Solar friendly proposals were submitted by:
Non solar friendly proposals were submitted by:
A final decision is expected early next year, however the current timeline is subject to change. Below is the expected schedule for the remainder of the year.
On Thursday June 24, the CPUC voted to approve major updates to the calculator that will be used to evaluate every NEM proposal, called the Avoided Cost Calculator. These major updates undercut the value of solar by two-thirds compared to the 2020 version of the calculator. The calculator was developed by the E3 consulting firm which is the same consulting firm used by utilities that regularly puts out materials that are biased against distributed generation.
The commissioners voted unanimously to approve the updates despite the fact that the calculator uses an entirely new and untested model for predicting how wholesale energy pricing will behave in the future. These updates were labeled as minor, and as such did not go through a robust public process where stakeholders can engage and vet the new model. Over 7,000 comments were made by environmental advocates, homeowners, community groups and climate justice organizations urging the commissioners to not vote to make the updates official until after the new model has been put through a public process.
Because of this decision, it will be even harder to secure a strong NEM 3, which is needed to help stop climate injustices and the climate crisis. This is why your voice is needed now more than ever!
On September 8, the City of Solana Beach became the first city in California to pass a resolution standing up for a strong NEM! We hope this decision will encourage other cities in the region to stand up for rooftop solar and send a strong message to the commissioners before making their proposed decision later this year. In addition to the City of Solana Beach passing this historic resolution, City of San Diego Councilmember Raul Campillo also released a letter that he sent to Governor Newsom and the CPUC. Business for Good San Diego also released a similar letter they sent to the governor and CPUC as well.
If you would like to speak during the public comment period at the start of the meeting, please participate by phone and call in by 10 a.m. and you will be able to make your comment. Comments cannot not exceed 2 minutes.
1-800-857-1917, passcode: 9899501 (to make a public comment during the public comment period, press *1)