Solar

California NEM 3.0: Lawsuit filed against CPUC

California NEM 3.0: Lawsuit filed against CPUC
(A rooftop solar system.)

Environmental advocates have filed a lawsuit against the California Public Utilities Commission over its decision to slash rooftop solar compensation in the proceeding known as NEM 3.0.

The groups — Center for Biological Diversity, Environmental Working Group, and the Protect Our Communities Foundation — filed a petition on May 3 that states the CPUC ruling “fails to ensure the continued sustainable growth of distributed energy resources” and does not account for their full value.

On Dec. 15, 2022, the CPUC adopted a draft decision that would revise the state’s net energy metering tariff in a bid to improve price signals by better aligning them with the electric grid’s conditions, both day and night. 

The proposed tariff’s updated billing structure is designed to optimize grid use by the tariff’s customers and incentivize adoption of combined solar and storage systems.

The groups bringing the lawsuit against the CPUC requested a rehearing of the decision on Jan. 17, 2023 but, according to their filing, they have not received a response. The state’s investor-owned utilities — Pacific Gas & Electric, San Diego Gas & Electric, and Southern California Eidson filed a response on Feb. 2 arguing that the CPUC should deny the request for a rehearing.

GO DEEPER: Vote Solar executive director Sachu Constantine joined the Factor This! podcast to break down the latest in the fight to save rooftop solar in California. Subscribe wherever you get your podcasts.

In its NEM 3.0 decision, the CPUC opted for an “improved version of net billing” with a retail export compensation rate aligned with the “value that behind-the-meter energy generation systems provide to the grid” and retail import rates that “encourage electrification and adoption of solar systems paired with storage.”

The tariff applies to electrification retail import rates, with what it said would be “high differentials between winter off-peak and summer on-peak rates” to new residential solar and storage customers instead of the time-of-use rates in the current tariff. 

It also replaced retail rate compensation for exported energy with Avoided Cost Calculator values that vary according to grid needs. The CPUC said that the high differential electrification retail import rates in combination with the variable retail export compensation rates provided by the Avoided Cost Calculator would send “strong price signals to customers” to shift their use of energy from the grid to mid-day and export electricity during the evening hours, which promotes the installation of storage with the solar systems.