The California Public Utilities Commission (CPUC), the entity responsible for regulating the investor-owned electric and gas utilities in California, 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:
*The commission is expected to vote on the revised proposed decision on December 15. No later than 120 days after the adoption of this decision, the Commission will implement a tariff sunset on NEM 2.0, after which time no additional solar customers will be permitted to take service under the NEM 2.0 tariff. If a customer is seeking NEM 2.0 status, it is imperitive that they have a complete interconnection application filed with their utility no later than 120 days after the adoption of the CPUC's final decision.
On June 24, 2021 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 products 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.
Our local coalition mobilized quickly to ensure that San Diego’s voice and priorities were on the record in this proceeding and successfully advocated for six cities in San Diego County; Solana Beach, Imperial Beach, Chula Vista, Encinitas, Carlsbad and San Diego, to issue resolutions standing up for solar and urging the CPUC to adopt a decision that allows solar to continue to grow.
In addition to the six cities in the region weighing in on the proceeding, the Mayor of San Diego, San Diego Community Power and over 40 local organizations have submitted letters to the governor, urging him to step in and stop the utilities and the CPUC from destroying the solar market.
Read more about our growing local coalition here.
The CPUC’s Proposed Decision
On December 13, the highly anticipated net energy metering (NEM) 3.0 proposed decision was released. It is very clear that the California Public Utilities Commission (CPUC) sided with the investor-owned utilities and proposed to make drastic cuts to the benefits of going solar.
The CPUC’s proposed decision threatened to:
• Reduce solar credits by 80 percent, from around 25 cents per kilowatt hour all the way down to 5 cents per kilowatt hour.
• Mandate solar customers to pay high and punitive monthly fees.
- An average system in SDG&E territory will carry the monthly fee of about $64 per month.
- An average system in PG&E territory will carry the monthly fee of about $48 per month.
- An average system in SCE will carry the monthly fee of about $60 per month.
• Take away protections for existing solar customers, which expected 20-years of so-called “grandfathering.” Under current rules, customers who went solar were guaranteed protections for 20 years. The proposed decision calls for a 25 percent reduction in grandfathering periods for existing customers.
• Slow the adoption of rooftop solar, increasing dirty energy usage, worsening climate injustices and accelerating the climate crisis.
The CPUC re-opened the proceeding on May 9, 2022 in order to collect additional information. There were a total of 14 questions that parties were asked to provide feedback on, covering the topics of a solar tax, a glidepath and low income community solar.
On November 10, the CPUC released their long awaited revised proposed decision. The revised proposed decision includes drastic cuts (75% reduction) to the solar credits customers receive for sharing their excess energy with their neighbors. Although the revised proposal is far better than the proposed decision issued in December 2021, it still carries not only a massive risk to California’s solar and storage market, but will also almost guarantee a decrease in the adoption of solar, making our climate goals that much harder to reach.
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)
Please help us by calling Governor Gavin Newsom and telling him you are against this proposal and want to see a solar-friendly alternative proposal! Share this information with your friends, neighbors and colleagues!
Call Governor Newsom at (916) 445-2841 or through the Solar Rights Alliance’s calling tool. A sample script is below - feel free to customize this:
“My name is ___ and I live in ____. I am against the proposal to cut the benefits of rooftop solar! Cutting the benefits of solar by 75 percent will kill the solar market and worsen the climate crisis. California should be doing more, not less, to promote rooftop solar. Please say no to this proposal, and yes to helping millions of working and middle class people access rooftop solar.“
Additional talking points:
• California has ambitious climate goals that we will not meet with utility-scale solar and wind alone - we need to expand rooftop solar and storage access to communities of concern in order to not only meet our climate goals, but also to help alleviate the burden of skyrocketing energy costs and to provide backup power in case of emergencies.
• Local rooftop solar saves every ratepayer money. Rooftop solar reduces the cost of maintaining long distance power lines as well as wildfire costs associated with long distance power lines that ratepayers must pay. A recent study by Vibrant Clean Energy shows rooftop solar can save California ratepayers $120 billion!
• We are in a climate crisis and should be doing everything we can to expand rooftop solar and energy storage access and transition away from dirty energy, which is contributing to climate injustices and accelerating the climate crisis.
Share this toolkit with family and friends and via social media!
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