ICYMI: Here’s what the experts are saying about the need to modify the state’s Net Energy Metering program (NEM)

Posted on March 25, 2021

Sacramento – A wide array of energy experts have called for substantial reforms to the state’s 25-year-old Net Energy Metering program (NEM) in filings submitted to the California Public Utilities Commission (CPUC) last week.

Consumer advocates, seniors, environmental organizations and more recognize the NEM program is unfairly driving up electricity bills for millions of Californians and also jeopardizing the state’s ability to achieve clean energy objectives at the lowest cost. Here’s what they had to say:

From the Public Advocates Office of the CPUC’s March 15 proposal (Page 4):

  • “Reforming NEM is a pivotal opportunity to support behind-the-meter (BTM) [rooftop solar] generation adoption that will facilitate reaching California’s climate and equity goals as quickly as possible. Adoption of electric vehicles (EVs), and replacement of gas appliances in homes and businesses (electrification) will be critical for California to achieve its climate goals. High electricity prices will make this transformation more difficult. Our future depends on Californians increasing their use of renewable energy.
  • “This Proposal is rooted in the fact that California ratepayers are currently paying too much toward incentives for BTM [rooftop solar] generation through NEM. The cost of NEM incentives unfairly raises electricity rates for those customers without BTM generation.”

From The Utility Reform Network’s (TURN) March 15
proposal (page 4):

  • “The inequitable outcomes from this accelerating trend must be mitigated through a new compensation structure that fairly calibrates reductions to participating customer bills with the demonstrated incremental value provided by BTM [rooftop solar] generating and storage resources to all customers and the electrical grid.”

From AARP’s March 15
proposal (page 3):

  • The authorizing statute sets out standards intended, among other things, to protect ratepayers from burdensome subsidy impacts. AARP believes that this is the primary purpose and the most important standard to consider in this matter. The statute requires the Commission to approve NEM-type tariffs that will sustain the behind-the-meter (BTM) [rooftop solar] growth of distributed renewables, but that does not mean that subsidies should be provided where they are unnecessary.”

From the Natural Resources Defense Council in a
blog post about its March 15 proposal:

  • “First, all Californians need to be able to afford to transition to clean energy. This is especially important as we start a slow and arduous recovery from the pandemic. The CPUC estimates that under the current NEM policy, the lowest-income Californians (who are least likely to benefit from NEM) could save around $80 to $100 a year if we didn’t over pay for rooftop solar; this estimate is corroborated by California’s Independent Emissions Market Advisory Committee.