JUICE: Deja Vu

By Published On: September 26, 2013

Former New York Yankee Yogi Berra--known for his nonsensical humor--once said, "It's never over until it's over." Yet, the debate over whether net metering for solar rooftop systems has a future does indeed appear to be over in California. Policy makers continue to back paying real time prices for home solar photovoltaic supplies in spite of utility objections. That's despite a California Public Utilities Commission study on the cost impacts of solar households on non-solar residences not being out until next week. When the state created its rebate system to support solar rooftops, there were no great fears the systems would shift costs to non-solar home dwellers. Indeed, regulators require utilities to pay for the solar electricity feeding into the grid when solar home occupants don't use it. As solar became more prevalent, utilities began to voice concerns the rooftop systems were forcing non-solar households to bear more of the fixed costs of providing power that solar households no longer paid for under the current rate structure. Utilities also voiced concern that distributed solar could drive up the need for more distribution and transmission system infrastructure. In 2012, the state enacted AB 2514 by Assemblymember Steve Bradford (D-Inglewood). It called for the commission to study whether solar rooftop owners were shifting or imposing new costs on non-solar system owners under net metering. The legislation was in response to the utility complaints that non-solar customers increasingly and unfairly were left holding the bag for fixed costs and that the cost-shifting soon would become unsustainable. The commission's study is still pending, but it now seems safe to infer that both lawmakers and energy regulators have concluded solar net metering has imposed no great cost on non-solar houses, nor does it threaten to do so in the future. In fact, many consider cost-shifting concerns to be overblown. That's evident from reading a bill passed earlier this month with broad support, as well as a resolution passed last week by the commission. First, the bill: AB 327 by Assemblymember Henry Perea (D-Fresno) allows the commission to impose up to a $10 monthly charge on all residential electric ratepayers with a maximum of $5/month for low-income customers. The fee is supposed to cover a reasonable portion of the fixed costs of providing service to residential customers. The commission, beginning in 2016, could adjust the charge based on the consumer price index. The charge come as part of rate restructuring ordered by the bill to create more overall equity, particularly between coastal residents and inland residents who rely more on air conditioning. In other provisions, the bill also continues net metering for solar rooftop owners until July 1, 2017. It simultaneously requires the commission to fashion a standard tariff for power fed from rooftop solar systems into the grid, subject to no cap on the amount of power. Currently, net metering is available in investor-owned utility territories for only the first 5 percent of a utility's aggregate peak demand for power. The cap has not yet been reached. Now, the bill essentially removes it by specifying the commission come up with a rate that utilities must pay for power from solar rooftop systems, with no limits on the amount of power they have to purchase. Looking at the big picture of the bill's effective removal of the net metering cap, the solar industry supported the measure, despite its new fixed cost charge. In other words, the industry concluded that for people contemplating solar, $10/month wouldn't amount to a deal breaker. Now, the commission's resolution: On Sept. 19 the commission concluded that allowing net metering for solar systems placed on apartments, condos, and other multi-unit buildings will not result in an increase in the expected revenue obligations of customers who are not eligible customer-generators, that is, solar rooftop owners. So instead of repealing net metering due to cost shifting, it's again full speed ahead for solar rooftops, plus making sure that utilities pay for power they feed into the grid. Just like the inimitable Yogi once said, "This is like deja vu all over again."

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