CPUC Issues Decision to Protect Solar Customers for 20 Years

Best Best & Krieger LLP

Best Best & Krieger Attorneys Successfully Represent Coalition in Proceeding

The California Public Utilities Commission (CPUC) recently ruled to protect all existing solar, biogas and wind customers under their current net-energy metering (NEM) contracts for a 20-year grandfathering period. The 20-year period will be calculated from the date of interconnection and will only be available for NEM customers who take service before the earlier of July 1, 2017 or when their utility reaches an existing statutory cap on eligible renewable projects. After the 20-year grandfathering period and after July 1, 2017 (or when their utility reaches an existing statutory cap on eligible renewable projects), NEM customers will be subject to new NEM rules that will be established by the CPUC in a separate proceeding.

Best Best & Krieger represented the Net Energy Metering Public Agency Coalition (NEM-PAC) -- consisting of nine California cities, water districts, school districts and private businesses -- in this proceeding to safeguard public agency investments in renewable energy projects.

This decision is significant as it impacts all entities and individuals with rooftop or carport-mounted solar, wind or biogas installations that are net-energy metered, such as big box retailers, companies, schools, cities, special districts, and other customers (including residential). Net-energy metering is an important State program which allows renewable energy customers to receive full retail credit for the excess energy they produce and feed into the grid; allowing them to “net” out the energy produced versus that which is later consumed. Because of the intermittent and variable nature of solar, net-energy metering is particularly beneficial to solar customers, allowing them to use the utility grid as a “battery,” rolling their meters backwards during the day and then using the energy credits produced during the day later on at night or during cloudy days. The CPUC was responsible for establishing this grandfathering period under Assembly Bill 327. (See also “CPUC Proposes 20-Year Transition Period,” 2-25-14 and “AB 327 Threatens Existing Solar and Renewable Projects,” 2-10-14.)

The CPUC’s decision also permits existing customers to modify or expand their systems by the greater of ten percent of capacity or one kiloWatt without affecting their grandfathering rights. This ensures that existing customers can conduct repairs and minor upgrades on their systems without losing their grandfathering rights.

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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