AB 327, the controversial California bill that tackles residential electricity rate reform and solar net metering policy in one fell swoop, received a vote of approval from the state Senate on Monday afternoon -- a key hurdle that makes it likely to be passed by the state Assembly and signed into law by Gov. Jerry Brown.
Monday’s 33-5 vote comes just two days before the Sept. 13 end of the state’s legislative session. AB 327 will now head back to the state Assembly for a "concurrence vote" on the Senate's amendments. Those amendments represent the result of a frantic flurry of activity by solar industry groups, consumer and ratepayer advocates and the state’s big three investor-owned utilities, with some last-minute amendments added just days beforehand.
We’ve been covering the developments around AB 327 for the past week or so, including key concerns that its changes to residential energy rate structure could harm the growth of rooftop solar PV and energy efficiency in the state. We’ve also covered how the bill has become the vehicle for extending the state’s solar net metering program, which had otherwise faced expiration by next year -- a move that swung many in the solar industry from opponents to supporters in recent weeks.
Now we’ve got an update on the most recent additions to the bill, which go a long way toward resolving some of the key remaining objections held by solar industry representatives, as well as consumer groups that benefit from today’s net metering system.
The first objection had to do with how AB 327 would subject today’s existing net metering contracts to review and potential rewriting, as the California Public Utilities Commission comes up with a new net metering regime. That led some groups to decry the bill as an attempt to undercut their investment in solar.
“Residents, farms and businesses who did the right thing and invested in solar now face the prospect of losing most of the savings they expect to receive in the future,” is how Michael Boccadoro, executive director of the Agricultural Energy Consumers Association, which represents farmers that have invested in net-metered solar projects, put it in a Friday press release.
Monday’s bill addresses this concern by setting a deadline of March 31, 2014 for the CPUC to set a procedure for how it will deal with “grandfathering” existing net metering contracts into the new program that AB 327 requires it to create. It also states that “Any rules adopted by the commission shall consider a reasonable expected payback period based on the year the customer initially took service under the tariff or contract.”
While that doesn’t change the fact that existing net metering contracts will be subject to change, it does address the concern that the previous version of the bill was “creating a lag time of uncertainty as the market waited for the new rules,” according to a Monday press release from the California Solar Energy Industries Association (CALSEIA), which had previously opposed the bill without amendments to deal with that uncertainty.
The second amendment deals with concerns voiced by solar and ratepayer advocates that individual utilities might seek to alter the rates and tariffs that net-metering customers face in ways that could reduce their value. To counter that possibility, the new amendment requires that any such changes take place during a “rulemaking proceeding involving every large electrical corporation.”
That means that the state’s big investor-owned utilities, Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric, won’t be free to make changes on their own, but will have to collectively seek changes in a major CPUC process, Bryan Miller, president of The Alliance for Solar Choice (TASC) industry group, said Monday.
As for the uncertainty about how existing net metering contracts may fare under the new regime AB 327 creates, Miller noted that, “right now under current law, there are no grandfathering protections at all for existing net metering customers. Everything under this is additive. These are all additional protections that nobody had before.”
Indeed, it looks as if the latest changes to AB 327 are bringing the remaining opponents of the bill around to support it. CALSEIA executive director Bernadette Del Chiaro, who had previously held a position of “oppose without amendments” to the bill, characterized it as a “historic bill” that will “breathe new life into California’s solar market” in Monday’s press release -- even as she noted that “the devil will be in the details hammered out at the CPUC.”