California utilities allege $3b rooftop solar ‘cost shift’ in bid to change net metering rules


Seeking to cap what they say is a $3 billion cost shift due to rooftop solar, California’s three investor-owned utilities offered a plan to reform the state’s net metering rules, which regulators are slated to take up later this year.

Pacific Gas and Electric, San Diego Gas & Electric, and Southern California Edison together proposed a plan to the state’s Public Utilities Commission (PUC), which set a March 15 deadline for proposals to revise net metering rules.

The utilities’ plan would address what they said is “an unfair and growing inequity” stemming from earlier versions of the rooftop solar Net Energy Metering program. They said the cost shift leads to electricity customers without solar systems paying about $3 billion more annually to “subsidize” existing rooftop solar customers.

The utilities claimed the alleged subsidy represents the costs of the electric grid that solar customers use, “but for which they do not pay.”

The California Solar and Storage Association’s proposal included measures to increase the amount of solar+storage.

The utilities said that while they would not ask regulators to end the cost shift, their proposal, if adopted, “would ensure that this burden does not increase” as customers adopt new rooftop solar.

Solar advocates filed their own proposals with the commission, and said the utilities’ plan would hurt the industry’s growth. “The real issue at hand isn’t so much a ‘cost-shift’ as the utilities claim but a ‘power shift’ from utility to consumers and small businesses” who install solar, said a statement from the Save Solar Campaign, which includes the California Solar and Storage Association and the Solar Rights Alliance.

California’s net metering system was set up in 1995, when the state counted about 10,000 home-based solar systems. In 2016, regulators approved what has been called NEM 2.0. At the time, regulators kept credits tied to retail rates rather than the lower wholesale rates.

The California Solar and Storage Association’s proposal to the CPUC included measures to increase the amount of solar+storage. And the group objected to two utility proposals. One would be a new Distributed Generation Successor Tariff that would cost about $24 a month. The second was a proposed Residential Grid Benefits Charge that would cost around $11 per kilowatt for a solar system.

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