On May 24, 2012, the California Public Utilities Commission (CPUC or commission) approved two decisions that significantly expand incentives for the distributed generation of clean energy in California. The first decision changes the method for calculating the statewide capacity cap for the net metering program, and could have the effect of increasing the total capacity of distributed renewable energy generation eligible for this program by more than 2 GW. The final version of the decision approved by the CPUC, however, provided that the net metering program will be suspended temporarily on January 1, 2015, unless the CPUC issues new policy rules for the program before that date. The second decision approves a new pricing methodology and key program design features for California's Feed-In Tariff (FIT), expands the program to include projects up to 3 MW, and sets a new statewide capacity cap of 750 MW under the program.

Decision on Net Metering California Statewide Capacity Cap

Net energy metering (NEM) is an important incentive program that enables utility customers who produce electricity on their side of the meter to receive a credit for generation in excess of electricity consumed from the grid at retail electricity rates. The California Public Utilities Code obligates the state's three investor-owned utilities (IOUs) to allow eligible customers to participate in their net metering tariff until the total generating capacity under the program exceeds 5 percent of each IOU's "aggregate customer peak demand." Previously, the IOUs calculated aggregate customer peak demand based on the highest recorded peak demand in their service territories (i.e., a "coincident peak") using different demand intervals.