| Work Detail |
The California Assemblys Appropriations Committee has approved a bill that would revoke more than one million commitments to rooftop solar customers in the state. The California State Assembly Appropriations Committee passed AB 942 by a vote of 9–1, which seeks to reduce compensation rates for current rooftop solar customers who send electricity back to the grid. The bill requires sold or transferred homes to switch to the Net Energy Metering (NEM) 3.0 system, which pays approximately 80% less for electricity sent to the grid. Opponents argue that this retroactively changes the terms set by the state, breaking the contract and reducing the value of solar panels when the homeowner sells their home. The version introduced by Assemblymember Lisa Calderon also sought to end NEM contracts entered into before April 2023 (NEM 1.0 and 2.0 rate plans), but an amendment removed that provision from the bill. The bill had previously passed the Utilities and Energy Committee by a vote of 10–4. Calderon had a 25-year career in government affairs and policy compliance roles with one of the states investor-owned utilities, Southern California Edison. Nine groups registered in support of the bill, primarily utility companies, along with the California Wind Energy Association and utility-affiliated labor groups. More than 160 groups registered in opposition to the bill, extending beyond solar and environmental groups to other industries, including school districts in San Diego and Los Angeles, Baptist, Methodist, and Unitarian Universalist churches, the political activist group Indivisible, Physicians for Social Responsibility, and others. “Rather than reducing electricity costs for Californians, AB 942 will reduce the value of many capital improvements to working-class homes involving solar energy,” the California Association of Realtors wrote in opposition to the bill. “These numerous homes, including moderately priced homes, will become a costly burden for home sellers and will diminish an entire class of buyers who would prefer not to purchase a home with solar panels that provide only marginal savings on energy costs.” The NEM program enabled the installation of 1.8 million projects through 2024, equivalent to approximately 16 GW of customer-sited renewable generation, nearly all of which is rooftop solar, according to the California Distributed Generation Statistics database. The utility-backed bill would force more than 300,000 low- and moderate-income Californians who invested in solar panels after April 2023 to potentially lose tens of thousands of dollars when they sell their homes. Nearly a quarter (24%) of California homes have solar power, according to the Solar Energy Industries Association. “This isn’t the story utilities tell about wealthy Californians getting too much savings,” said Brad Heavner, executive director of the California Solar and Storage Association, during Wednesday’s committee meeting. “This is working-class Californians trying to stabilize their energy rates. They signed long-term leases with the expectation of savings over time.” According to the California Public Utilities Commission (CPUC), nearly all NEM 1.0 and NEM 2.0 customers would have to wait more than 10 years before they would automatically be charged the net billing rate. Contract The bill breaks contractual promises to millions of solar energy users, Heavner said. The Assembly Utilities and Energy Committees analysis of the bill stated: While it is true that the CPUC has the authority to change NEMs rate structure, as evidenced by NBTs 2022 decision, the CPUC has thus far declined to adopt any retroactive changes. However, the bills sponsors point to investor-owned utility interconnection agreements as evidence that the customer-generator understands that the NEM tariff is not a binding contract, where these agreements state that rate schedules shall at all times be subject to such changes or modifications by the Commission. During Wednesdays committee meeting, Rachel Koss, an attorney representing the California Utility Employees Coalition, a coalition of unions whose members are employees of most private and public electric utilities and combined electric and gas companies in California, said the claim that the bill would tear up NEM contracts is 100% false. Theres no such thing as a contract for NEMs rate structure, he said. NEMs rate structure was created by the CPUC. They have complete jurisdiction over it and can change it at any time. Heavner disagreed, saying, Theres absolutely a breach of contract because the interconnection agreement signed by the utility and the customer incorporates the NEM fee. So its a violation of federal contract law. Costs The bill analysis states: Whether one believes the policies proposed in this measure will result in real cost savings for non-NEM customers will depend largely on ones belief—or disbelief—in the shifting costs of solar energy. I feel like my district, which is the fifth poorest in the state, is subsidizing those with that luxury, Assemblyman Mark Gonzalez (D) said during Wednesdays Assembly Appropriations Committee meeting. So what I want to know is how many people without solar are subsidizing those with solar? The answer is zero, Heavner responded. Its the opposite effect: more solar reduces the need for utilities to spend money on the grid. Its an overall net savings for customers who dont have solar, so we should appreciate the fact that these customers have responded to the states signals to install those systems and reduce costs for everyone. According to the analysis of the bill, Regardless of the numbers, most of the debate boils down to a philosophical discussion about self-generation and grid use. Rooftop solar was estimated to save all California customers, including those without solar, $1.5 billion on bills in 2024 alone. However, rooftop solar represents direct competition for the profit model of the states largest investor-owned utilities, which has placed it in the spotlight as a regulatory scapegoat. This debate over cost shifting may lead observers to wonder what is accurate, the bill analysis said. Do rooftop solar systems result in $8.5 billion in costs to non-participants, as the Public Advocates Office claims? Or $4 billion, as Borenstein estimates? Or does it result in $1.5 billion in benefits to the grid, as the rooftop solar industry claims? The CPUCs Office of the Public Advocate released a report on how it arrived at the $8.5 billion figure for rooftop solar. However, a report by M.Cubed Consulting and the California Solar-Storage Association said this analysis was flawed and found that rooftop solar provided a net benefit of $1.5 billion to all California customers. Heavner said the numbers Calderon and Koss pointed to are 100 percent false. “Utilities make money building grid capacity. The more they spend on the grid, the more profit they make, so they’re incentivized to spend money, actually inefficiently, in addition to building things that may not be necessary,” he said. They see us as a competitive advantage. Solar allows them to build less grid capacity, he said. When you generate more locally, you need less grid capacity to deliver energy from distant sources. Utilities dont like that, and thats why theyve invented this math that blames high rates on solar customers, rather than their own out-of-control spending. Solar customers are buying less energy from utilities, Heaver said. We want people to buy less energy from utilities. Weve always encouraged that we should continue to encourage that. |
