CPUC Seeks Comments by Friday on Net-Energy Metering Law Transition Period: Law Impacts Public Agencies’ Renewable Energy Projects With Net-Energy Metering


The California Public Utilities Commission (CPUC) set a Friday deadline for interested parties to submit comments on establishing a transition period under the newly signed Assembly Bill 327 (AB 327). For existing net-energy metering (NEM) customers such as schools, cities, special districts and other customers with renewable energy projects, the scope and terms of this transition period will affect their NEM contracts with the utilities and may affect the economic viability of their NEM systems.

AB 327 is a controversial law that makes significant changes to existing NEM law that will affect NEM’s customers’ contracts with the utilities. NEM is a program that allows renewable energy customers to essentially run their electricity meters backwards, using the grid as a kind of battery and “netting” out the energy produced by their systems to the grid against the energy they consume from the grid. AB 327 directs the CPUC to change the tariff for those existing NEM customers at a future date, which is extremely problematic for public entities that have made renewable energy investments.

AB 327 does require the CPUC to determine the transition or grandfathering period for some NEM customers and requires that the state agency consider a “reasonable expected payback period based on the year the customer initially took service under the NEM contract.” Qualified NEM customers are those who take service under the NEM tariff prior to the earlier of July 1, 2017 or the attainment of each utility’s NEM cap. What the CPUC should consider to be “reasonable,” given the vastly differing payback periods for renewable energy projects between customers, is unclear and not specified in AB 327. These components of the transition period will be established by the CPUC after receiving stakeholder input.

On November 27, the day before Thanksgiving, the CPUC issued a ruling establishing extremely short deadlines for public comments regarding the transition period. Initial comments are due by December 6th, and reply comments are due by December 16th. While some stakeholders have requested a short extension of these deadlines, it is currently unclear if it will be granted.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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