ICYMI: It’s Not Just Our Coalition Concerned About the Net Energy Metering Cost Shift

Posted on July 1, 2021

SACRAMENTO – Consumer, environmental and labor groups unaffiliated with the Affordable Clean Energy for All coalition continue to express strong concerns about the Net Energy Metering (NEM) cost shift.

The groups are asking the CPUC to fix this cost shift because the financial burden on non-solar customers, who tend to have lower-incomes, is unfair. Paying unnecessarily high costs for rooftop solar also will delay California’s future clean energy goals and electrification.

Their apprehension and calls for NEM reform were laid out in the most recent round of filings in the NEM proceeding underway at the California Public Utilities Commission (CPUC).

Below are short excerpts from the June 18 Opening Testimonies filed in the CPUC’s NEM proceeding. 

Public Advocates Office, California Public Utilities Commission. Full testimony here.

  • “The cost burden attributable to NEM is increasing average electric rates for customers, which jeopardizes the state’s goal of achieving GHG reductions via beneficial electrification of transportation and buildings. High customer electric rates will discourage customers switching from gasoline- or natural gas-fueled technologies to electric technologies because doing so will become less economically beneficial.” – Page 2-23.
  • “The cost burden of generating renewable energy through the current NEM tariff is much higher than the cost of Renewable Portfolio Standard (RPS) renewable energy procurement contract prices. This means that customer dollars collected from non-NEM participants to pay for the cost burden induced by the current high retail rate compensation structure of NEM 1.0 and 2.0 could be avoided through policies and investments in more cost-effective ways to procure renewable electricity and achieve the states’ climate goals.” – Page 2-27.

Michele Chait, The Utility Reform Network (TURN). Full testimony

  • “The low levels of NEM participation by CARE customers, when compared to non-CARE customers, demonstrate the need for new tariff structures that protect lower-income ratepayers from cost shifting and will result in enhanced participation by CARE customers.” – Page 3.

Mohit Chhabra, Natural Resources Defense Council (NRDC). Full testimony

  • “[T]he NEM 3.0 tariff needs to accurately compensate NEM customers for the value their distributed generation provides, charge customers for electricity imported from the grid, and charge a fee to recoup customers’ share of grid services costs when they are in excess of what is collected on a volumetric basis.” – Page 3.
  • “Currently, the compensation for distributed generation increases over time, as rates increase, even though distributed generation costs, such as market price of solar panels, continue to decline.” – Page 20.

Robert Earle, Coalition of California Utility Employees. Full testimony

  • “Polices [sic] that are meant to advance climate and renewable goals should not disproportionately burden the less wealthy and disadvantaged communities.” – Page 8.
  • “NEM as currently structured has failed this very basic goal of equity. With the pressing need for wildfire prevention and the transition to a zero-carbon grid, we simply can’t afford to subsidize an industry to the tune of $3 billion (and growing) per year, nor can we put that burden on the backs of those who can least afford it.” – Page 8.
  • “California will not reach its clean energy goals if it wastes money on inefficient programs.” – Page 10.

Affordable Clean Energy for All is a diverse coalition of nearly 100 groups including clean energy, seniors, faith-based, low-income, consumers, community and business groups seeking changes to California’s 25-year-old NEM program. The coalition supports the continued growth of rooftop solar and the state’s commitment to clean energy and is encouraging the CPUC to reform NEM’s antiquated rate structure that is needlessly increasing electricity rates for millions of residents including those least able to pay.