Solar Groups Denounce California Regulator’s Rate Case Decision

By Joseph Bebon, Solar Industry

On Thursday, the California Public Utilities Commission (CPUC) voted unanimously to approve a decision in San Diego Gas & Electric’s (SDG&E) general rate case after revising the proposed decision earlier this month. The California Solar Energy Industries Association (CALSEIA) and the Solar Energy Industries Association (SEIA) both criticized the decision as unsupported by the facts in the case, inconsistent with the state’s policies, and detrimental to solar customers.

As the solar groups explain, the vote is the first in a series of changes to time-of-use (TOU) rates set to take place statewide over the next two years. Under TOU, rates are higher at periods of peak demand and lower off-peak. Experience in California and elsewhere has shown that customers can understand TOU rates and can in ways the benefit the grid, such as by waiting to run the dishwasher until the off-peak period. The solar groups say these rates are important for sending customers accurate incentives to reduce energy when the grid is most strained, and TOU rates also impact the economics of customers’ rooftop solar systems.

According to the solar groups, utilities in California are proposing to move the highest-priced “peak” periods into the evening (4-9 p.m. or 5-10 p.m.) from today’s afternoon (e.g., noon-6 p.m.) peak. Some utility proposals would create super off-peak rates in the middle of the day in spring months, ostensibly to help manage spring hydro runoff and abundant solar production. However, the groups say lower rates in the daytime would reduce the relative benefit of going solar.

The groups say the San Diego decision adopts a 4-9 p.m. on peak for vague “policy reasons” despite the judge in the case originally proposing an earlier period based on the commission’s TOU methodology, which was established this January.

“The commission spent more than a year examining how to develop time-of-use rates, for the very purpose of ensuring that this once-in-a-generation change to new periods was based on facts,” says Brandon Smithwood, director of California state affairs at SEIA. “Earlier time periods would also help reduce consumption during hours of declining solar generation when the California system operator (CAISO) needs to ramp up gas plants to meet energy needs.”

Solar parties expect a more thorough analysis of data in the forthcoming TOU decisions Southern California Edison and Pacific Gas & Electric. According to the solar groups, the commission may have to move SDG&E’s TOU periods earlier in the day once it follows the methodology in its next rate case when the utility’s application must take all of the required data into account. The next general rate case for SDG&E will be filed next year and decided less than three years from now.

“The commission has decided not to apply its new TOU methodology in this rate case,” says Brad Heavner, policy director for CALSEIA. “It is shocking that the commission purposefully avoided considering data that was solidly on the record.”

According to the groups, the decision dampens a market already depressed by uncertainty about the changing TOU periods. A decision earlier this year set a deadline of July 31 for most new solar projects to connect under the old TOU periods. Projects under development and new project development have slowed dramatically. Both CALSEIA and SEIA say they are seeking a change to the “grandfathering” rules so that project development can continue as rate cases are decided. The decision extends the deadline for schools to August 2018.