California Regulators Reject Utility Challenge To Solar NEM 2.0

The California Solar Energy Industries Association (CALSEIA) is promoting another solar policy victory, as the California Public Utilities Commission (CPUC) has approved a resolution denying all legal challenges to the recently adopted net energy metering (NEM) rules for solar customers.

In January, the CPUC issued a decision to create the NEM “successor tariff,” known as NEM 2.0, which CALSEIA says did not include the new fees and lower compensation rates proposed by the state’s three investor-owned utilities. The decision made significant changes, with increased assessment of non-bypassable charges and mandatory time-of-use rates for residential customers, but it left in place the fundamental structure of NEM, CALSEIA adds.

The utilities responded by filing “applications for rehearing,” which alleged the decision contained legal error by ignoring many of the utilities’ arguments. Pacific Gas & Electric’s (PG&E) application challenged the decision as a whole, and the application from Southern California Edison and San Diego Gas & Electric challenged certain aspects. A ratepayer group, The Utility Reform Network, and a coalition of utility unions also challenged parts of the decision.

The CPUC resolution rejects those legal challenges, and although CALSEIA notes the CPUC made two minor tweaks to the language of the decision, it did not change any elements of the order.

“This was a frivolous legal maneuver by utilities, paid for by ratepayers, and the commission has put an end to it,” charges Bernadette Del Chiaro, executive director of CALSEIA.

The utilities have the option to appeal to state court, but CALSEIA believes it is unlikely they will do so because the chances for success are low. “Hopefully, the utility harassment of the CPUC is over,” added Del Chiaro. “They didn’t get everything they wanted, and it’s time to move on.”

In a statement to Solar Industry, a PG&E spokesperson said the utility “strongly supports the continued, sustainable growth of private solar.”

“With their final decision on NEM, the CPUC did not make the smart energy reforms that are needed to ensure a sustainable market for solar in California,” said the spokesperson. “While we are disappointed the CPUC decided to not move forward with a rehearing, PG&E is committed to working with all parties to find the right balance to support continued growth of solar.”

According to CALSEIA, attention is now focused on the precursor activity to creating the next version of NEM. The CPUC has again hired the E3 consulting firm to build the next version of a solar cost-benefit model, and the methodology will likely be debated for two years. CALSEIA says themain question at issue is the extent to which utilities can incorporate distributed generation into their forecasting and spend less money on the distribution grid. The CPUC will take up NEM again in 2019.