It looks like a decision is finally moving forward on a long-awaited and controversial rule affecting the roughly 1.3 million customers in California who have installed rooftop solar panels on their homes and businesses.
The California Public Utilities Commission said in a notice Friday it will hear oral arguments from parties who have battled one another over potential changes to NEM, or Net Energy Metering — the rules that determine the size of the credits customers receive on their utility bills when their rooftop solar systems generate more energy than they consume.
The remote hearing is set for Nov. 16 and will run for two hours.
"Time will be allocated evenly amongst parties requesting to present," said the notice issued by one of the administrative law judges at the commission, known as the CPUC for short. "Presenters should expect two to three minutes to present. Joint presentations will be permitted and are encouraged."
Scheduling an oral arguments session, longtime CPUC watchers noted, is an indication a final decision by the five voting commissioners may be coming in a few weeks.
Oral arguments had been scheduled to be heard back in January but were postponed and then the commission put a final decision on indefinite hold as debate about potential changes to the existing NEM framework raged.
"It's good to see that things are moving forward at this point," said Tyson Siegele, energy analyst for San Diego-based Protect Our Communities Foundation, which has opposed tightening existing rules. "I wouldn't be surprised to see a final decision from the commission on this before the end of the year."
California's NEM rules have not been changed since January 2016, and the commission has been working for years on an update, colloquially called NEM 3.0.
Nearly a year ago — in December 2021 — an administrative law judge and a CPUC commissioner issued a complicated 204-page proposed decision that, if passed, would give the state's solar regulations a major overhaul.
The revisions include creating a "grid participation charge" of $8 per kilowatt on the solar systems of residential customers. With typical rooftop installations being 5 to 6 kilowatts, that would come to about $40 to $48 per month.
Another potential change would alter how much solar customers are paid when they send excess power back to the grid. Instead of being credited at the retail rate of electricity, customers would get paid at the "actual avoided cost," which is much lower.
The state's solar industry, as well as some clean energy and environmental groups, immediately condemned the proposed decision, insisting it would knee-cap California solar growth. Since solar installations can cost tens of thousands of dollars, they say adding a grid participation charge would extend the payback period to such an extent that potential customers would not make the investment.
Critics also say the investor-owned utilities want to undercut solar because it threatens the power companies' business model.
Utilities have long complained about California's NEM rules, saying the growing number of installations leaves customers who don't have solar paying an unfair share of the fixed costs that come with maintaining the electric system — things like wires, substations and transformers.
This "cost-shift" leads to non-solar customers paying disproportionately more on their monthly bills.
Opponents say the cost-shift argument is exaggerated but the Natural Resource Defense Council, energy academics such as Severin Borenstein at UC Berkeley and The Utility Reform Network and the Public Advocates Office consumer groups have said the cost-shift issue needs to be corrected.
The December 2021 proposed decision received backlash from solar advocates and a month after it was released, Gov. Gavin Newsom told reporters, "We still have some work to do" on the proposal.
Since the proposed decision was issued, the CPUC has appointed two new commissioners, including a new president, Alice Busching Reynolds.
Under CPUC rules, proposed decisions may be amended before going to the five commissioners for a vote. It's also possible that an "alternate proposed decision" that is significantly different from the original may be put forth.
It takes a majority vote from the commissioners to adopt a proposed decision.
