PG&E Backs Interim Expansion of Solar Metering

By Published On: October 30, 2009

After opposing legislation to allow more owners of small rooftop solar systems to be paid the retail energy rate for excess solar juice sent to the grid, Pacific Gas & Electric announced early this week it would raise its net metering cap by 1 percent. A PG&E spokesperson could not say how much more solar power would be eligible under an expanded net metering cap. California policy makers define net metering as the providing of higher payments to owners of distributed renewable generation systems that feed power back into a utility’s system. Under net metering, bill credits for surplus solar and other alternative power sent to the grid are not limited to the price of electricity, but also include the cost of associated transmission, distribution, public good charges, and those linked to private utility rates of return on infrastructure--approximately 11 percent. Without net metering, credits for surplus renewable power in California are limited to the wholesale cost of power. “Tens of thousands of homes and businesses are generating their own solar power, and thousands more are getting in line,” Governor Arnold Schwarzenegger stated October 26. “PG&E’s action ensures that this movement toward renewable energy continues.” The utility agreed to an interim increase of its net metering cap from 2.5 percent to 3.5 percent of its aggregate peak demand to address concerns that the current payment limit would slow the state’s $2 billion-plus subsidized solar program seeking to stimulate 1,940 MW of new photovoltaic power. The utility’s aggregate peak demand is around 20,520 MW, according to the California Energy Commission. “PG&E remains committed to addressing the issue of climate change, increasing the amount of renewable energy that is delivered to our customers, and the success of the California Solar Initiative program,” stated Peter Darbee, PG&E chair and chief executive officer. AB 560 by Nancy Skinner (D-Oakland), which would have raised the current 2.5 percent net metering cap for private utilities, did not make it into law this legislative session. It sought to raise the cap on net metered renewable projects to 5 percent of an investor-owned utility’s peak demand. During debate the last legislative session, bill proponents warned if the 2.5 percent net metering cap wasn’t lifted, PG&E would hit that cap at the end of this year, and discourage new solar installations (Circuit, Sept. 11, 2009). Darbee, however, asserted that the utility would not hit its net metering cap until 2011. Initially, AB 560 sought to raise the net metering cap to 10 percent but it was ratcheted down to 3.5 percent of utility peak demand. It then was bumped back up to 5 percent near the end of session before it fizzled. Much of the utility opposition to raising the current 2.5 percent cap was over the added cost to ratepayers without net metered systems. AB 560 is back in play as it is now a two-year bill. In addition, the governor said he would introduce legislation that would remove limits on net metering “so there are no arbitrary limits on the amount of solar we can install, the number of jobs we can create, and the amount of energy we can save.” To make way for the higher cap, PG&E will submit a change in tariffs to the California Public Utilities Commission within two weeks.

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