On December 13, 2021 the California Public Utilities Commission (CPUC) issued a Proposed Decision Revising Net Energy Metering Tariff and Subtariffs. The Proposed Decision is based on Guiding Principles adopted in Decision 21-02-011. (See CPUC Adopts New Guiding Principles for Net Energy Metering (February, 2021).) It marks the CPUC’s second significant overhaul of the renewable net metering (NEM) tariff rules and contract since NEM was initially authorized by the Legislature in 1995.
The Proposed Decision finds that the current NEM tariff (referred to as “NEM 2.0”) “negatively impacts non-participating customers, is not cost-effective, and disproportionately harms low-income ratepayers.” On the basis of these findings, the Proposed Decision revises the compensation rate for NEM customers and imposes new charges to ensure that “all customers pay for their usage of the grid.” In response to stakeholders’ concerns that these changes will discourage investment in solar and storage systems, the Proposed Decision establishes a “glide path” in the form of a Market Transition Credit.
In summary, the Proposed Decision:
The Proposed Decision anticipates that implementation of the successor tariff will take 12-24 months. A tariff sunset on NEM 2.0 will be implemented no later than 120 days after the adoption of a final decision, with a buffer period after that to transition customers to the successor tariff.
Comments on the Proposed Decision are due Friday, January 7. Reply comments are due January 14. An on-line oral argument has been scheduled on January 12, 3-4:30 p.m. (details here).
The Proposed Decision has generated heated debate in recent weeks. Some parties argue that its reduction in benefits and grid charges are necessary to protect ratepayers, while others maintain that the proposed tariff changes will discourage customers from investing in rooftop solar at a time when accelerated renewable energy development is needed to meet the state’s ambitious climate goals. The Proposed Decision may be on the CPUC’s January 27, 2022 business meeting agenda, or be delayed for further consideration and modification.
Contact: Brian Biering