December 18, 2021 - The Rural County Representatives of California (RCRC) reports on December 13, the California Public Utilities Commission released a long-
awaited draft decision revising subsidies and rates for new and existing solar customers.
The revisions respond to underlying concerns raised by the three large investor-owned utilities (IOUs) and other stakeholders that the existing Net Energy Metering (NEM) tariff for solar customers is overly generous and results in non-solar customers subsidizing grid and other costs – an imbalance that could swell to as much as $3.4 billion annually.
To address this potential imbalance, the CPUC has proposed significantly reducing compensation to solar energy customers. New solar customers will be compensated for excess energy generation based on the value to the utility of that generation rather than the retail cost of the electricity. Existing solar customers under NEM1 or NEM2 will be phased into the new reimbursement rate after fifteen years. The CPUC has designed the tariff to incentivize the adoption of storage to new and existing solar systems.
One of the most significant changes to the NEM tariff is the creation of a new Grid Benefits Charge for residential non-CARE (California Alternate Rates for Energy) customers. This monthly charge is proposed to be $8/kw of installed solar capacity and will NOT be applied to commercial solar customers. This new surcharge is proposed to offset grid maintenance costs and to fund a new $600 million program to install solar panels on low-income housing. The surcharge could add $40-$80 per month for the average residential customer.
In an odd twist of fate, because the California Energy Commission recently required all new residential construction to be built with solar, the CPUC’s Grid Benefits Charge will de facto increase monthly costs for those who move into new homes. The proposed decision would also undermine the economic analyses that supported the CEC’s new building standard, thereby further increasing the total cost of new home construction in California.
The CPUC’s proposed decision is not final and could be changed. It will not be voted upon until January 27th at the earliest.
RCRC is not a party to this proceeding, but has been following it closely to monitor how it could impact county operations.
ABOUT RURAL COUNTY REPRESENTATIVES OF CALIFORNIA (RCRC)
The Rural County Representatives of California (RCRC) is a thirty-seven member county strong service organization that champions policies on behalf of California’s rural counties. RCRC is dedicated to representing the collective unique interests of its membership, providing legislative and regulatory representation at the State and Federal levels, and providing responsible services for its members to enhance and protect the quality of life in rural California counties. To learn more about RCRC, visit rcrcnet.org and follow @RuralCounties on Twitter, Facebook and Instagram.
Source: RCRC
