The California Public Advocates Office (PAO) in late August published a factsheet on net metering that asserts the state’s rooftop solar incentives will cost customers without solar an estimated $8.5 billion by the end of the year. The PAO is a state entity tasked with advocating for the lowest possible bills for customers of California’s regulated utilities.
The PAO says that although the new NEM 3.0 net billing tariff (NBT) is an improvement on previous net metering programs, it doesn’t address the continuing “cost-shift” from legacy NEM 1.0 and 2.0 customers to non-solar ratepayers.
The PAO’s calculation of cost-shift.
The PAO suggests the state take one of two actions in response — provide NEM 2.0 customers with compensation set at the electric rates in effect at the time of the adoption of the incentives, or convert NEM 1.0 and 2.0 accounts to the NBT either upon sale of a home or after 10 years of interconnection.
California Solar & Storage Association (CALSSA) executive director Bernadette Del Chiaro revealed to Solar Power World that she’s not concerned about the implications of the report on California solar policy, but she is troubled by the PAO’s position on solar.
“The California Public Advocates Office (PAO) recently published a factsheet that parrots utility talking points about rooftop solar, regurgitating a grossly inaccurate cost of rooftop solar in order to advocate for changing contract terms for two million solar consumers. The PAO’s unprecedented anti-solar activism is misguided and wrong,” CALSSA said in a press statement.
The POC paper does not address the cost avoidance of additional power plants that solar rooftop customers provide to the grid, which I continue to read that solar rooftops provide 10% of the total grid use. Also, if the power is purchased from solar rooftop customers by the utilities at the market value (NEM 1.0) or below (NEM 2.0 and NEM 3.0), why is the cost burden displaced from the utility companies to a consumer who is trying their best to go green with a solar rooftop. This is just plain bad logic and bad math by POC.
The PAO should have reviewed their proposal with legal counsel prior to release. Legacy NEM customers executed 20-year service agreements/contracts with the power companies. The terms & conditions of fully executed agreements/contracts CANNOT unilaterally be changed by either party UNLESS ALL THE PARTIES TO THE CONTRACT AGREE TO THE MODIFICATIONS. This is basic contact law. An Administrative Law Judge blocked previous efforts to shorten legacy NEM agreements/contracts for this reason.
Take a look at the equations and you’ll understand why the cost shift argument is compete BS. They take the average compensation rate and subtract out the utilities’ calculation of the Avoided Cost of solar. However, when they calculate the avoided cost they DO NOT INCLUDE transmission, distribution, profit and environmental benefit costs — only the cheap generation costs from remote solar and wind farms. On the other hand, all customers pay for these charges. If you plug in the correct values of these Avoided Costs, solar actually SAVES all customers even if they don’t have solar.
Outrageous, punish 2,000,000 early adopters and blame us for taking the first steps, when you are having to pay for your mistakes of causing wildfires. People need to stand up to this corporate greed and welfare. California should nationalize the big PGE, SCE and other big ones, and then decentralize it with rooftop production and subsities instead of getting people to sign up for 25 year contracts with shady solar companies.