Three groups appeal to CPUC to reconsider NEM 3.0

The Center for Biological Diversity, Protect Our Communities Foundation and the Environmental Working Group appealed the California Public Utilities Commission’s (CPUC) decision to slash compensation to rooftop solar customers. The appeal is based on the groups’ belief that commission’s decision will harm the ability of environmental justice communities to benefit from solar energy.

In December the CPUC voted unanimously to approve Net Energy Metering 3.0 (NEM), slashing payments by 75% for excess solar production sent to the grid.  CPUC voted to cut the average export rate in California from $0.30 per kWh to $0.08 per kWh, making the cuts effective on April 15, 2023. During the vote, the Commission said the balancing of costs and benefits continue to be “quite generous” under the decision.

“California is drowning in climate-driven deluges, and we have to make it easier for communities to embrace rooftop solar to survive the climate emergency,” said Roger Lin, an attorney at the Center for Biological Diversity. “By slashing the net metering program, state regulators made it even harder for environmental justice communities to get solar. We’re appealing because this flies in the face of the commission’s mandate to ensure that rooftop solar is accessible to low-income Californians.”

The groups believe the decision threatens the growing rooftop solar market and puts affordable and resilient renewable energy out of reach for most communities.

“California’s private utilities have been relentless opponents of rooftop solar for many years, because it undercuts the golden goose — new high-profit transmission line construction. They have convinced regulators of the alchemy that they are protecting the interests of lower-income customers — and not shareholder interests — by devaluing rooftop solar,” said Bill Powers, an expert witness in the proceeding and a board member of the Protect Our Communities Foundation.

The appeal says the commission should redo its analysis because regulators devalued rooftop solar based on flawed modeling that ignored net metering’s benefits to environmental justice communities. Those benefits include decreasing the state’s dependence on fossil fuels and providing local economic benefits, including new jobs. The commission also failed to analyze non-solar customer bills and ignored or underestimated harms from fossil fuel energy, particularly to low-income communities and communities of color.

“By making residential solar economically untenable for millions of working families, the CPUC has sidelined the only competition the big utilities face. It will allow PG&E and the other power companies to keep wasting ratepayer money on misguided, high-cost infrastructure investments,” said Ken Cook, president of the Environmental Working Group Ken Cook. “The CPUC needs a reset to fit an emerging new world of electric power. We now have strong competition for utilities from distributed solar, battery storage and microgrids, a technological and economic transformation the likes of which we haven’t seen in more than 100 years.”

The groups noted that the commission also abandoned a $600 million equity fund aimed at getting more clean renewables to low-income communities. Regulators claimed the state’s battery storage fund would achieve the same result, but Gov. Gavin Newsom recently cut that fund by 30%.

Opposition to the commission’s decision is widespread. More than 125 California and national climate and equity groups representing millions of people previously called on the governor’s office to reject the commission’s flawed analysis and maintain the state’s solar credit to grow rooftop solar in environmental justice communities. Bernadette Del Chiaro, executive director, California Solar and Storage Association called the NEM 3.0 decision a “step backwards”. “It is a dark day in California when the utility regulators try to block out the sun,” Del Chiaro said.