AB 327 is now officially California state law -- and Gov. Jerry Brown, who made it so with his signature this week, wants to make sure that the way it extends net metering for years to come doesn’t end up hurting state residents who today make money from their net-metered solar systems.
That’s the gist of Brown’s Monday signing statement on the law, which will enable some of the biggest changes to California electricity rate structures and renewable energy policies in the past decade.
Brown’s office worked with solar industry advocates to add key solar policy provisions into what was originally a bill aimed squarely at rate reform before it was passed by state lawmakers last month. But just how those key provisions are implemented will be left to the California Public Utilities Commission (CPUC) to decide.
In his Monday signing statement, Brown made clear that he wants the commission to make sure that whatever plan it comes up doesn’t backfire on today’s net metering beneficiaries:
"As the CPUC considers rules regarding grandfathering of net metering customers, I expect the Commission to ensure that customers who took service under net metering prior to reaching the statutory net metering cap on or before July 1, 2017, are protected under those rules for the expected life of their systems."
Today’s net metering regime pays solar-equipped customers retail rates for the solar power they deliver to the grid; it is set to expire once it meets its quota of 5 percent of nameplate generation capacity for each of the state’s three big investor-owned utilities or in mid-2017, whichever comes first.
The new program, on the other hand, is meant to exist without caps, which is good from the point of view of enabling growth for solar power. But it also means that the rules for how customers are paid for that power are sure to change -- and that, solar advocates have warned, could lead to today’s contracts being rewritten in ways that undercut their long-term economic value.
AB 327’s net metering provisions set up a future conflict between the solar industry and the state’s big investor-owned utilities, which have long argued that net metering leads to increasing costs for non-solar customers.
Whether or not that’s true depends on who you ask. A CPUC-ordered study on California’s net metering policies recently found that extending today’s regime could cost non-solar ratepayers $1.1 billion a year by 2020.
But as Greentech Media has pointed out, this study is unlikely to provide an accurate picture, since it uses antiquated data and assumptions, as well as projections on future electricity rate structures that no longer apply, now that AB 327 allows them to change so radically.
Meanwhile, the debate over distributed solar’s impact on distribution grid costs and energy prices rages on, both in the form of competing studies and in policy battles in state capitols around the country, such as Arizona.
As the country’s biggest solar market, California is sure to have an outsized impact on the industry. How the state will formulate policies that maintain that growth, while protecting the interests of utilities and customers without solar panels on their roofs, will be one of the most closely watched solar policy developments out there.