California Utilities Launch Legal Battle Against NEM Ruling

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Three of the largest investor-owned utilities in California – Pacific Gas & Electric (PG&E), Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) – have submitted a legal challenge opposing the California Public Utilities Commission’s (CPUC) Jan. 28 decision to continue net metering.

On March 7, PG&E filed a rehearing application for the net energy metering proceeding, referred to as NEM 2.0, asking the CPUC to vacate its decision. According to the California Solar Energy Industries Association (CALSEIA), this would effectively prevent customers from installing solar after the current rules expire if the CPUC’s legal division agrees to further review. The other two utilities, the group adds, are calling for major changes that would make solar inaccessible to a majority of customers.

According to Bernadette Del Chiaro, executive director of CALSEIA, “The utilities are continuing their legal maneuvers because it is disruptive to the solar industry. Rather than working in partnership with solar companies and striving to reduce costs for customers, utilities would prefer to be obstructionists and muck up the market.”

CALSEIA asserts that the proceeding to consider net metering changes has already lasted 22 months and has extended one month past the state legislature’s deadline. After deliberation, the CPUC decided to reject the utilities’ proposals to replace net metering with what CALSEIA says are complicated schemes.

However, a spokesperson for PG&E says, “With their final decision, we are extremely disappointed that the CPUC did not take the opportunity to meet the important goals set out in Assembly Bill 327 and make the smart energy reforms that are needed to ensure a sustainable market for solar in California.”

“PG&E advocates that the CPUC re-evaluate their decision in order to address the cost incurred by non-solar customers and determine the appropriate subsidy for solar customers,” the spokesperson adds.

Brad Heavner, policy director for CALSEIA, refutes this argument, claiming that the utilities’ actions will unfairly deprive their customers of solar opportunities.

“The utilities continue to use false analysis to claim that net metering is a massive subsidy,” says Heavner. “Rather than accepting the commission’s decision and allowing their customers to go solar under fair rules, the utilities are fighting to keep opportunities away from their customers.”

Although the CPUC ruling rejected the utilities’ proposals, CALSEIA notes the decision does make significant changes to net metering, requiring customers to pay both an upfront and an ongoing monthly fee and to be subject to time-varying rates.

The CPUC says it will continue re-evaluating the rules but intends to make changes gradually so that customers will still have the opportunity to install solar and the industry will have time to continue lowering prices.

The new net metering rules will not affect current solar customers or those who install solar before the utilities meet their caps – April for SDG&E, October for PG&E and early 2017 for SCE – on the current rules. If the CPUC does not grant the applications for rehearing, the new rules should be in place in time to enable a seamless transition.

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