By Ivan Penn, Los Angeles Times
California regulators are scheduled to vote Thursday on new rules for compensating owners of rooftop solar systems, a decision that will play a key role in shaping the state's future energy policy.
The California Public Utilities Commission is proposing increased fees on rooftop solar owners but stopping short of the onerous charges that the state's investor-owned utilities wanted.
Southern California Edison, San Diego Gas & Electric and Pacific Gas & Electric pressed the commission to charge solar owners hefty fees that the solar industry said would crush their business. The proposed decision set for vote Thursday morning is viewed as a broad compromise to some. But others say it's a defeat for the utilities.
"This is politically a historic moment for rooftop solar," said Bernadette Del Chiaro, executive director of the California Solar Energy Industries Association. "This proposed decision rejects utilities' bad math on solar and stands with consumers."
The final version of the proposal before the commission came in a flurry of activity late Wednesday afternoon as angst over a footnote in the proposed decision worried the solar industry.
The footnote listed what would be included in the required fees that solar owners would have to pay to the utility companies to ensure all ratepayers paid their share of the cost of maintaining the electric grid.
Included in the footnote was electricity transmission costs, which would have doubled the fees solar owners would have had to pay.
Without the transmission fees, solar owners faced an average $6 monthly charge. With transmission costs, the monthly charge could have topped $12 for the average solar owner, potentially wiping out the savings solar gave them. The solar industry said the monthly cost could go as high as $18 a month.
“The economics of that are devastating for the industry,” said Susan Glick, senior manager for public policy at Sunrun, the nation’s largest residential solar company.
The concern prompted news releases Wednesday announcing a pro-rooftop solar rally Thursday at the California Public Utilities Commission, ahead of a scheduled vote by regulators on the rule change during a 9:30 a.m. meeting at the commission’s headquarters in San Francisco.
"We should be putting the foot on the gas for clean energy, not the brakes,” Brad Heavner, policy director for the California Solar Energy Industries Association, said about the concern over the potential fees.
But in the end, a revised proposal released by the commission Wednesday afternoon deleted transmission from the footnote and the monthly fees solar owners would have to pay.
The monthly fees are just part of the commission’s plan.
Under the proposal, new solar customers would face a one-time charge, what the commission calls “a reasonable interconnection fee,” to tie into the electric grid. The commission estimates the fee would range from $75 to $150 per solar customer.
In addition, rooftop solar customers would pay a fee estimated at 2 cents per kilowatt-hour for electricity used from the utility companies, no matter how much power their solar systems generate. This fee would amount to about $6 more a month for the average solar user.
Utilities also would place new solar customers on time-of-use rates, which rise during periods of high electricity demand.
Solar owners would continue to receive a dollar-for-dollar exchange, or retail value, for the electricity they produce in excess of what they use from the power company each month. But on an annual basis, that benefit gets reduced to a wholesale value for any electricity generated in excess of what the solar owner consumed.
Existing owners are exempted from all the changes for 20 years from when they installed their solar systems and connected to the grid.
The utilities have decried the commission’s plan as insufficient and unfair to non-solar customers. In response, the utilities mounted a late-stage attempt to have the commission’s proposed decision tossed in favor of a new plan of their own.
Robert Laffoon-Villegas, an Edison spokesman, said the utilities’ revised plan would have resulted in “modest” increases for ratepayers above the current compensation structure and the one proposed by the commission.
By Edison’s account, the average solar customer under the current structure has a monthly electric bill of about $82. Under the commission’s plan, that would increase to $91. The utility counter proposal would increase it to $103.
Laffoon-Villegas said Edison thought the transmission costs should have been included in the fees solar owners must pay. He said the transmission system is designed to serve a utility’s peak load, which is when they have the most electricity use.
The peak load, Laffoon-Villegas said, occurs in the evening, when there is no solar production. So he said all customers, including solar owners, are using electricity from the utility at that time and someone has to pay for it all.
The utilities say they just want the solar owners to pay their part.
“The current program creates an equity issue between solar-haves and solar-have-nots,” he said.
The benefit for solar owners is the average customer saves about $2,000 a year in utility bills, Laffoon-Villegas said. With proposed changes, the savings would be reduced by only $7 a month for a total of $1,916.
In an earlier statement about the commission’s proposal, Ron Nichols, Edison’s senior vice president of regulatory affairs, said the utility wants rooftop solar to expand in California.
“There is a more balanced way to get this done,” Nichols said. “A much more fair approach would maintain some level of subsidy, but at far lower levels, while rooftop continues to grow.”
Edison and the state’s other investor-owned utilities argue that rooftop solar will continue to benefit from the federal solar investment tax credit, which gives a 30 percent tax benefit to solar owners. Congress extended the 30 percent credit through 2019. They said the solar payments are a “customer-funded subsidy, paid for by customers that do not have solar rooftops.”
But the solar industry said the utilities simply don’t like anyone else entering the business that they have controlled for decades.
“If you want to talk about subsidies,” Sunrun's Glick countered, “let’s talk about the billions of dollars in subsidies the fossil fuel industry has had for a hundred years. It’s my hope that the commission will stand up for net metering.”
©2016 the Los Angeles Times Distributed by Tribune Content Agency, LLC.
