CA Public Utilities Commission Slams Net Metering

The California Public Utilities Commission (CPUC) just released its survey of an increasingly popular incentive for rooftop solar, and that survey has solar advocates seeing red.

In its Draft Net Energy Metering Cost-Effectiveness Evaluation, the CPUC forecasts that California's rooftop solar owners who have so-called Net Energy Metering (NEM) agreements with their local utilities, in which excess energy produced by solar panels can roll a property's electric meter backwards, will end up costing other ratepayers more than $1 billion a year in 2020. That's an assessment that is sure to be welcomed by California's utilities, which have lately been arguing that NEM customers don't pay their fair share of the costs of maintaining the state's power grid.

Needless to say, advocates of greater adoption of rooftop solar are very unhappy with the draft evaluation, saying that it doesn't reflect the full scope of benefits that NEM -- and the greater solar deployment it promotes -- offer to the public at large.

"The study design was stacked against solar," Susannah Churchill, solar policy director at Vote Solar, told the San Jose Mercury News' Dana Hull. "To do a cost-benefit analysis and not include benefits like public health and jobs just inflates utility claims. Rooftop solar is a threat to the utility business model, and they are doing everything possible to stop its momentum."

Vote Solar released its own assessment of the economic impacts of NEM in January. Conducted by Crossborder Energy, Vote Solar's study found that rooftop solar actually saved utility ratepayers something like $90 million a year in avoided costs for new transmission lines, centralized power generation plants, and other infrastructure costs that would have been incurred if rooftop solar panel owners had relied on the utilities for their entire power consumption.

The authors of the draft evaluation also found that the typical California NEM customer has a household income of $91,210, supporting the contentions of those in the utility camp that net metering transfers wealth to the affluent from the less-well-off.

The draft evaluation will be subject to public comment, but its take on the net metering issue is already causing concern among solar advocates given that CPUC is in the process of issuing rules on how the state will regulate net metering rates and related utility charges.

At 319 pages the draft evaluation is fairly lengthy, and ReWire will be examining it in the next few days. But a cursory examination of the document reveals that the phrases "greenhouse gas," "climate change" and "sea level rise" appear nowhere in the document. Nor do "pollution," "wildlife," or "public health." Or "employment." ReWire suspects that the CPUC's draft evaluation thus omits certain extremely large externalized costs of utility-scale power generation, and benefits of the state's burgeoning rooftop solar industry from its calculations of who actually benefits from net energy metering, and by how much.