The California Public Utilities Commission released a proposed decision yesterday in its proceeding concerning the future of net energy metering (NEM) for customers of the state’s three largest utilities who install renewable distributed generation (DG) on their properties. In comments filed in early-August, Pacific Gas and Electric (PG&E), Southern California Edison (SGE), and San Diego Gas and Electric (SDG&E) had argued for many changes to the current framework, including one that would have allowed them to charge customer-generators at the retail rate for electricity they consume from the grid and pay a lower rate for energy that customer-generators export to the grid. However, the CPUC rejected that proposal for now by “declining to impose any demand charges, grid access charges, installed capacity fees, standby fees, or similar fixed charges on NEM residential customers while the Commission is working on how, if at all, any such fees should be developed for residential customers.”

The proposed decision also includes an expansion of the NEM successor tariff to include customer-generators with systems larger than 1 MW, so long as the customer pays all Rule 21 interconnection costs. The proposed decision does contain a new requirement that customer-generators “pay a reasonable interconnection fee” to the applicable utility estimated to be about $75-$100, and also imposes non-bypassable charges for each kilowatt-hour of electricity that the customer-generator consumes from the grid, regardless of how much they export to the grid, which will likely add approximately $5 to the customer-generator’s bill each month. The Commission found that “[c]ontinuing net energy metering with NEM customers paying charges for interconnection and paying nonbypassable charges for all electricity consumed from the grid is likely to allow customer-sited renewable DG to continue to grow sustainably.” The proposed decision will also require all NEM customers interconnecting on or after January 1, 2018 to take service on a time-of-use (TOU) rate with no option to opt out, and will eventually require all customers using the NEM successor tariff, like all residential customers generally, to take service on a TOU rate by 2019. The Commission will revisit the NEM successor tariff for review in 2019, due to the coinciding institution of default TOU rates at that time.

The Commission determined that the virtual net metering (VNM) and net metering aggregation (NEMA) tariffs “should be maintained and updated consistent with the provisions of the NEM successor tariff established by this decision.” The Commission noted specifically that NEMA is important for allowing agricultural customers to take advantage of renewable DG. The Commission also found that, while the AB 693 Multifamily Affordable Housing Solar Roofs program addresses barriers to the growth of DG in disadvantaged communities, a program should be developed that further expands VNM to cover members of disadvantaged communities who do not live in multifamily housing.

The three utilities generally responded negatively, reiterating arguments that the proposed decision continues to force non-customer-generators to help pay for costs that customer-generators impose on the grid. Solar advocates, meanwhile, applauded the proposed decision, particularly the component that preserves retail rates paid to customer-generators. The Commission will make a final decision as early as January 28, 2016.