California IOUs File Counterproposal to NEM Plan

Three major West Coast investor-owned utilities (IOUs) – San Diego Gas & Electric (SDG&E), Southern California Edison (SCE), and Pacific Gas & Electric (PG&E) – have jointly filed a counterproposal to replace new net-energy metering (NEM) rules that are scheduled for a vote before the California Public Utilities Commission at the end of the month.

The joint recommendation of the IOUs would charge customers at the retail rate for their full volume of delivered generation, while compensating them at a different rate for their exported generation.

Specifically, under the joint recommendation of the IOUs:

  • NEM customers would be billed for each kilowatt hour (kWh) of energy delivered to them from the grid – just as non-NEM customers are: The total volume of a NEM customer’s delivered energy for a particular month would be charged on that customer’s monthly bill.
  • NEM customers would pay a small monthly charge for use of the power network: SCE suggested $3 for each kilowatt of installed solar system capacity – so that, the smaller the size of the solar system installed, the smaller the monthly fee.
  • Bill credits for exported energy also would be provided on a kWh basis, and also would be credited to the NEM customer on a monthly basis: This export rate, similar to a NEM charge, would remain at 15 cents/kWh for all rooftop solar owners until distributed generation passes 7 percent of a utility’s aggregate customer peak demand; at which time, it would decrease to 13 cents/kWh.

Current solar owners would be “grandfathered” on their present plans for 20 years after the date of their system installation.

It is the IOUs’ point of view that everyone would win in this scenario. “Customers who generate power would still buy energy from the utility when their systems do not produce enough power for their needs, such as at night,” said SCE Vice President of Energy and Environmental Policy Caroline Choi. “For the energy that customers generate and provide to the grid, they will receive compensation based on the costs that the utility would pay in buying that energy from other sources.”

By contrast, the CPUC proposed decision would charge rooftop solar users a one-time interconnection from 2 cents to 3 cents per kWh for electricity from their power company (which had not been assessed on NEM users in the past).

The proposed decision was due to be voted on as soon as January 28.

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