The bill would significantly cut net metering rates paid to rooftop solar customers, and also revise long-term rates and other protections that were promised to existing rooftop solar customers.
May 28, 2021
Concurrent to the net energy metering (NEM) proceeding being held by the California Public Utilities Commission, a bill has been introduced to the state assembly that would amend the credits that legacy, current, and future solar customers receive for their systems. The bill’s approach has many across the industry describing it as shocking and dangerous.
The legislation, Assembly Bill 1139, was written by Assemblywoman Lorena Gonzalez, chair of the Assembly’s Appropriations Committee.
The bill includes a laundry list of initiatives that would devalue rooftop solar and distributed energy resources; eliminate 20-year legacy credit rates for NEM 1.0 and 2.0 customers, including schools and farms, which would threaten project economics and payback periods; and introduce a new “grid access” monthly charge that would add $50-$86/month for the typical residential solar user.
“Proposals that roll back NEM really, in turn, roll back the bill savings opportunities for customers who need them the most,” Suzanne Leta, head of policy and strategy as Sunpower, told pv magazine USA.
The amount by which NEM and other distributed energy policies have expanded access and reduce utility bill costs for low- to middle-income Californians cannot be understated. According to Leta, half of all new residential rooftop solar customers in California are in low- and middle-income areas.
Devaluing and undercutting residential solar is also an issue that threatens grid stability in a state known for disruptions and outages.
Consumer protection issues
“The fact that this bill is even being proposed in the California State Legislature is shocking,” said Leta. “There are serious consumer protection issues with the bill, given that it makes changes retroactively on the million-plus rooftop solar customers in the state.”
Previous changes to the state’s NEM have been made prospectively by state regulators, meaning that new customers adhere to the new rules and rates, while existing customers remain with the 20-year rates they had when they first installed their system. That means there is almost no precedent for changing NEM architecture for existing customers because of the risk that doing so can derail the economics of their installation, some of which have been in place for years.
AB 1139 and contains provisions relating to higher-level state energy policy. As it currently stands, any PUC proceeding or decision regarding NEM must take into consideration the sustainable growth of solar and distributed energy resources, as well as ensuring that any changes to policy or incentives are gradual. AB 1139 would eliminate those provisions.
Utilities are also currently required to account for the grid savings benefits of distributed energy resources when they do their investment planning. AB 1139 would eliminate that provision, too.
The bill also would require the PUC to make its own decision regarding a NEM successor tariff by February 2022. If this is not accomplished, the bill then would require the PUC to institute the following measures:
- For all new net metering customers, the credit value on their bill would fall to the wholesale rate, which is roughly 3 cents per kWh, whereas the average credit rate currently is in the range of 20+ cents per kWh
- A fixed monthly fee of $70-90 would be applied to new and existing customers, once those customers have had their system in place for at least years.
The potential ramifications of AB 1139 extend beyond California. For years, states with nascent solar energy markets looked to California as a model for energy policy and incentive programs. As other states matured, the California models were applied to other aspects of clean energy like energy efficiency measures and electric vehicles.
So, if the state that historically has been used as a model abandons one of the most critical elements of the clean energy transition, the move may give immediate precedent to any state or utility looking to gut rooftop solar’s growth.
More than 100 organizations across California and the country have expressed opposition to the proposed measure. Opponents include the California Solar and Storage Association (CALSSA), Solar Energy Industries Association, Advanced Energy Economy, Earth Justice, Vote Solar, Environment California, Sierra Club, and the Solar Rights Alliance.
In addition, roughly 22,000 people have emailed their Assembly member asking them to vote against AB 1139. An additional 2,300 have called their Assembly member asking for a no vote, according to data provided by SunPower, the Solar Rights Alliance, and CALSSA.
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