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:
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!
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)
Assembly Bill 1139 (AB 1139), introduced by San Diego’s Assemblymember Lorena Gonzalez, would kill "net energy metering" (NEM), the policy that has allowed rooftop solar to continue to grow sustainably and become increasingly accessible to low-and-moderate income consumers.
The bill would make going solar more expensive for every ratepayer, including those on the discounted California Alternate Rates for Energy Program (CARE), while eliminating the 20-year NEM grandfathering protections for residential solar customers who could not afford to purchase their system upfront and for businesses that did not previously incur demand charges on their bill, in addition to introducing new fixed upfront fees, which an analysis shows will effectively tank all existing and future rooftop solar investments. This endangers the new solar homes mandate since the requirement can only be enforced by the Energy Commission if its cost effective.
This bill disregards studies that show solar is a net benefit to all ratepayers, while presuming that solar is the sole form of utility rate “cost shifting” and that killing rooftop solar will prevent the investor-owned utilities from raising rates on low-and-middle income households in the name of remaining solvent after losing revenue from solar customers.
The reality is that this bill promotes rate increases on every ratepayer across the board, since it fuels the investor-owned utilities’ main justification for rate increases, namely new infrastructure.
The utilities are contractually guaranteed a profit, often around 10%, on any infrastructure they build, and local rooftop solar reduces the need for that infrastructure. The investor-owned utilities would prefer to see desert solar as the only means of reaching California’s state-mandated climate goals, because it would require large amounts of new transmission and distribution infrastructure to bring the clean energy into our communities from far away, and the utilities get Renewable Portfolio Standard credits for these systems. This bill is very lucrative for the investor-owned utilities as it allows them to profit from the new infrastructure (and pass along any costs from wildfires caused by its transmission lines) while killing their largest competitor, the rooftop solar industry.
Public purpose programs, like San Diego Gas & Electric’s Power Your Drive program, were mismanaged and forced overspending to the tune of $25 million, which was then cost-shifted to ratepayers. These are the cost shifts that truly increase rates and should be addressed, not rooftop solar, which is shown to provide a net benefit to the grid. The Los Angeles Times reported on a Vibrant Clean Energy study that stated rooftop solar could save all ratepayers upwards of $473 billion dollars, and not installing rooftop solar could cause ratepayers to pay $385 billion more.
This bill would increase our reliance on dirty fossil fuels during a climate crisis, and make it nearly impossible to meet our 100% clean energy goals, while promoting further climate injustices in California and killing the state’s solar industry, which accounts for thousands of jobs and billions of dollars in economic benefit.
Eliminates net metering
Reduces grandfathering for commercial customers without demand charges as well as residential customers who could not afford to purchase their system outright
Adds additional fixed monthly charges
Gives the Public Utilities Commission a deadline to enact a new tariff
AB 1139 was heard in the California Assembly Utilities & Energy (U&E) Committee on Wednesday, April 21, 2021. More than 100 environmental, solar, climate justice and other advocacy groups called into the meeting and over 50 organizations wrote to Assemblymember Gonzalez to urge her to make amendments given the bill would effectively kill the rooftop solar industry.
The bill is now co-authored by Assemblymember Wendy Carrillo, who introduced a net metering reform bill in 2020, which failed. Parts of that failed bill are in AB 1139. Assemblymember Carrillo is a representative in the SoCalGas service territory, a subsidiary of Sempra Energy, parent company of SDG&E. Both Assemblymember Gonzalez and Assemblymember Carrillo have received tens of thousands of dollars in campaign money from Sempra Energy and Southern California Edison.
Nearly ninety percent of callers opposed the bill, ranging from families with solar, nonprofit organizations, climate and equity activists, a former oil worker in Kern County who’s seen environmental racism from fossil fuels first hand and International Brotherhood of Electrical Workers signatory contractor Sullivan Solar Power. Another union contractor, Baker Electric Home Energy, in addition to the Center for Sustainable Energy and GRID Alternatives, program administrators for the state's $1 billion “Solar on Multifamily Affordable Housing” rebate program, also called in to oppose the bill.
Despite this public outcry of concern, it was not enough to prevent the bill from passing through the Assembly U&E Committee and it was referred to the California Assembly Appropriations committee, which the bill’s original author chairs.
Significant amendments were made to the bill on April 21st 2021 by the Assembly U&E Committee, followed by amendments on May 28th 2021. The amendments make this bill go from a bad bill, to the worst attack on rooftop solar to date.
Amendments to AB 1139 include:
Since the current/amended version of the bill eliminates its pro-equity provisions (increased CARE subsidies and funding for low-income solar) and adds additional anti-solar language, this bill needs to be stopped.
The Appropriations committee hearing of AB 1139 was on May 19th, 2021, during which the bill was put on the Suspense File, where the committee sends bills to evaluate their fiscal impacts. The Assembly Appropriations Committee moved AB 1139 off of the Suspense File during their hearing on May 20th 2021. AB 1139 came up for an Assembly floor vote on June 2nd 2021 and was put on hold after only receiving 27 aye votes out of the 41 needed to pass.
On June 3rd 2021 the bill was placed in the Assembly's Inactive File, which is primarily used for bills that don't have enough votes to move out of their house of origin. While the author could remove the bill from the Inactive File and bring it back up for a vote, there needs to be a 1-day notice, and the deadline to move bills out of the house of origin is June 4th 2021. Assemblymember Gonzales' office confirmed the bill will not move forward in 2021. This is a monumental victory given the politics that were at play, and a testament to the power of the people. While this victory by climate advocates over the utilities and their special interests should be celebrated, we must remain vigilant since language from AB 1139 could be reintroduced into another bill going through the state legislature this year.
Below is the list of representatives that voted NO on AB 1139. Please thank them for standing up for the environment and a just, liveable future!
*Please note that we will be checking on the status of the bill regularly and updating this page with the latest information.*
Contact your local representative to voice your concern, and tell them to oppose AB 1139 as amended! Pre-drafted language is below. Sign the petition telling Governor Newsom to stand up to the utilities!
My name is [insert name] and I am a [insert status, affiliation, or organization as applicable] from [insert location]. I oppose AB 1139 as amended, and urge you to vote NO on AB 1139. This bill would kill the rooftop solar industry and [pick point(s) from the list below].
"Now that there are more and more vegetarians, beef consumption is down. Therefore we will not make the profit we expected from the feedlots and slaughterhouses we were planning to build. To make the profit we are entitled to we will have to raise the cost of beef. Since everyone knows vegetarians are rich yuppies they are shifting the cost of beef onto poor red blooded American beef eaters. Therefore the government must give us the right to tax vegetables to make everything fair." - Beef industry lobbyist
“We need to tell our grocery store customers that they should pay an entrance fee if they plant a vegetable garden.” - Grocery store owner