CONTROVERSIAL NET METERING MEASURE SIGNED INTO LAW BY GOVERNOR BROWN

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By Paul Kruze

“The way everything has turned out, the energy hogs are being rewarded…Now, no matter how much you conserve energy, no matter how much you generate, the residential ratepayers are stuck with this.” – Pete Hasapopoulos, San Diego Sierra Club

October 11, 2013 (San Diego’s East County) -- Amid a chorus of cheers and jeers, Governor Jerry Brown signed Assembly Bill 327 reflecting the first change to electric rates and how  major power utilities account for residential rooftop solar systems.

Introduced by Fresno Democrat Party Assemblyman Henry T. Perea, the legislation directs the California Public Utilities Commission to design a new net metering program that would take effect within four years. The bill also gives the CPUC authority to require utilities to source more than 33 percent of their power from renewable sources like wind and solar. In addition, the new law will replace the electric rate restrictions adopted by  California during the state’s energy deregulation crisis in 2000.

Under net metering,  rooftop solar system owners receive retail credit for all the electricity they generate unless they produce more electricity than they consume during any given billing period.  Net metering also allows consumers to use electricity whenever needed while contributing their production to the grid. The concept of net metering is designed to promote private investment in renewable energy production sources such as solar and wind.

When the bill was first introduced, it was harshly criticized by environmentalists who argued it would empower electric utilities to discourage rooftop solar growth in the state.  Under the revised bill, net metering remains in place and provides a path forward for the CPUC to begin removing the net metering cap. The new law now allows the Commission to order electric utilities to procure any renewable energy beyond the previous cap of 33 percent.

While amendments were made to the original bill addressing the qualms of those who opposed it, San Diego Sierra Club Executive Director Pete Hasapopoulos indicated that concerns remain and the group will be closely monitoring the bill’s implementation.

“We were disappointed how the vote on the final vote went, but we’re happy that in the final week, amendments to the bill improved the prospects of energy metering aspects,” Hasapopoulos said. “But the fact remains that the Legislature left the fixed charges component of the bill, keeping the solar industry vulnerable to these types of charges.”

The primary negatives of the bill remain its fixed charges, he said, adding that the bill flattened out the tiered rate structures that had encouraged and rewarded small energy consumers to conserve while penalizing large energy users. 

“The way everything has turned out, the energy hogs are being rewarded. They are going to get a better deal than they used to. Now, no matter how much you conserve energy, no matter how much you generate, the residential ratepayers are stuck with this. You are being punished,” Hasapopoulos said. “It is fundamentally wrong.”

Despite Hasapopoulos’ prediction of the gathering clouds for ratepayers and those with environmental concerns, he says that the amendments to the bill which were included at the last minute may lessen the resulting sting. Most notably, net metering standards which were set to expire in 2016 were removed from the final bill. “There was a cap on net metering on how many megawatts could be generated by rooftop solar. Now that is gone.  This bill in its final reading has turned out to be a mixed blessing of sorts.”

The bill was locally opposed by the San Diego Chapter of the Sierra Club, a major local solar panel installation company, San Diego County Supervisor Dianne Jacob, City of Oceanside mayor Jim Wood, and by former California Assembly member Lori Saldaña.

Solar Energy Industries Association (SEIA) President and CEO Rhone Resch praised the bill, calling its passage by the Legislature a “banner day in California. Once again, state lawmakers have set the bar high when it comes to the adoption of renewable energy.”

 Sempra Energy subsidiary SDG&E and other large investor-owned electric utilities mounted a major lobbying campaign for Perea’s bill which included a major advertising investment in online social media sites as Facebook and Twitter.  Much to the chagrin of those who opposed the bill, the bill was also actively supported by the American Association of Retired Persons(AARP), The Utility Reform Network (TURN), a San Francisco-based consumer advocacy  group, and the U.S. Green Investment Network.

 “First and foremost, the AARP and The Utility Reform Network are ratepayer advocate groups and their concern is not the environment. Their primary concern is the ratepayer as electric customers. I think that might explain part of it,” Hasapopoulos said. “

That said, The Utility Reform Network is on record saying they are going to fight the fixed charge aspect of the bill in front of the CPUC.  He added that the AARP has missed the fact that many retired persons have made substantial investments in rooftop solar because it is a major factor in their retirement planning.  “They need to see that this important thing for many of their local members,” Haspopoulos said.

In spite of his criticism of actions by  those advocacy groups which supported the bill, Hasapopoulos remains conciliatory, saying that both groups have overlapping constituencies.

 “Maybe we need to do a better job of making groups like the AARP understand the importance of clean energy,” he concluded. “ If it isn’t about the bottom lines and the personal finances of the members of their group, their members will get a better deal out of this when we have state law the promotes rather than discourages residential green energy development.”