CPUC Adopts New Guiding Principles for Net Energy Metering

As California looks to continue expanding distributed renewable energy generation to meet state goals for clean energy and climate change mitigation, the California Public Utilities Commission (CPUC) has issued a new decision establishing a set of guiding principles for utility standard Net Energy Metering (NEM) tariffs. The NEM tariffs authorized under Public Utilities Code Section 2827.1 allow customers investing in rooftop solar and other eligible distributed energy systems to access net metering and receive a credit for periods in which generation exceeds usage.

D.21-02-007 initiates consideration of a third generation NEM tariff to replace existing renewable NEM tariffs authorized in 2016. After taking comments on a proposed set of guiding principles the CPUC adopted eight principles that “speak to the specific objectives of the Commission and the California Legislature in establishing this proceeding and embarking upon a revisit of the net energy metering tariff”. A successor to the net energy metering tariff should:

  • comply with the statutory requirements of Public Utilities Code Section 2827.1;
  • ensure equity among customers; enhance consumer protection measures for customer-generators providing net energy metering services;
  • fairly consider all technologies that meet the definition of renewable electrical generation facility in Public Utilities Code Section 2827.1;
  • coordinate the Commission and California’s energy policies, including but not limited to, Senate Bill 100 (2018, DeLeon), the Integrated Resource Planning process, Title 24 Building Energy Efficiency Standards, and California Executive Order B-55-18;
  • be transparent and understandable to all customers and should be uniform, to the extent possible, across all utilities; and
  • consider competitive neutrality amongst Load Serving Entities.

The CPUC opted to frame the principles as general guidance, and rejected proposals to incorporate metrics based on disputed allegations (e.g. that the existing NEM tariff causes a “cost shift” to non-NEM customers), or to include reference to specific cost-effectiveness tests. A number of proposed principles were rejected because the CPUC considered them more appropriate for consideration in the upcoming proceedings focused on the substance of the NEM tariff terms and conditions.

Concurrent with discussion of guiding principles, the Commission recently held a workshop on an E3 White Paper on the NEM successor tariff and program elements. According to the Assigned Commissioner’s Scoping Memo and ALJ Ruling, the next step will be service of party proposals on March 15, 2021 (see ALJ Ruling for instructions), and workshops on party proposals March 23-24. Evidentiary hearings are currently scheduled for June.

For more information, contact: Jed Gibson, Christian Briggs