Conspiracy! Illegal! California’s new solar rules must be ditched, critics say

Do-over!

Critics who hate the state’s new rooftop solar rules — which slash the amount that future rooftop solar owners will get for exporting power to the grid — are demanding a rehearing before the California Public Utilities Commission.

“The decision is part of a conspiracy to violate antitrust laws,” one petition for a do-over asserts.

The alleged conspirators? The three big utilities — Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric (who said that current rooftop solar owners are credited for far more than their exported power is really worth, forcing their non-solar neighbors to pay for it).

The co-conspirators? Gov. Gavin Newsom, the Natural Resources Defense Council, The Utility Reform Network and the California Public Utilities Commission itself (which favored a revamp).

The conspiracy’s objectives? “Wholesale and retail price fixing, group boycotting, price discrimination.”

“We allege that the CPUC has effectively surrendered its regulatory authority … over the IOUs (investor-owned utilities) by affording the IOUs undue influence and control over the CPUC deliberations, decisions and actions … and by politically incestuous relationships between regulator (CPUC) and regulated (IOU) officials,” said the motion by CAlifornians for Renewable Energy and Michael E. Boyd.

Illegal!

A separate request for a rehearing, by the Center for Biological Diversity, the Protect Our Communities Foundation and the Environmental Working Group, is markedly less colorful.

Instead of asserting conspiracy and manipulation, it argues that the PUC made legal errors and thus the decision must be reversed.

The errors? California law requires the PUC to foster “continued sustainable growth” of solar power and encourage its spread in disadvantaged communities. The new rules will do neither, they argue.

The PUC also weighed the costs of rooftop solar on non-solar folks too heavily, and weighed the savings from canceled transmission projects (because rooftop solar meant they weren’t needed) too lightly, they say.

“By adopting a successor tariff that increases payback periods and decreases bill savings, the decision will devastate solar adoption rates and thus fail to ensure the continued sustainable growth of distributed generation,” the rehearing request says.

Several groups have lined up in support of a rehearing with the PUC, saying that the climate emergency makes swift action critical.

(File photo by Jeff Gritchen, Orange County Register/SCNG)

Deja vu

A response filed jointly by the three big utilities effectively sighs, “Haven’t we done this already?”

The rehearing request reprises arguments “that were fairly litigated in the proceeding and resolved in the decision,” they say. The PUC made factual and policy determinations within its discretion. The groups “failed to present any legal error,” and their “attempt to re-litigate the same issues should be rejected and the application for rehearing denied.”

Their critics’ error, the utilities assert, is interpreting the phrase “continues to grow sustainably” as meaning “maintaining current growth rates.” The PUC commissioners acknowledged that there’s a drop-off in rooftop solar installations after updates to the rules (what’s officially known as “net energy metering”), but that growth eventually recovers.

The PUC’s rejection of critics’ “strained interpretation of the statute” is not legal error, the utilities argue.

So what’s next? The parties will file responses with the PUC. The PUC will review everything and determine whether the folks asking for a do-over demonstrated legal error in the underlying decision. Then the PUC will issue a formal decision, yay or nay, on a rehearing, “but there is no specific timeline for the CPUC’s issuance of that decision,” said spokeswoman Terrie Prosper.

Sullivan Solar Power apprentice Erik Straub carries a solar panel during an installation at a home in Ladera Ranch.(File photo by Nick Agro, Orange County Register/SCNG)

What’s this about again?

About a quarter-century ago, California sought to juice the adoption of rooftop solar. It put a system in place that compensated rooftop solar owners handsomely for exporting excess power to the grid for their neighbors to use.

As the years went by, though, huge industrial-scale solar farms came online. Solar power became cheaper. But the amount rooftop solar owners got for their power did not decrease, the utilities argue.

That — along with the fact that solar owners weren’t hit with the fixed costs related to maintaining the grid — resulted in a big cost-shift to non-solar households of some $4 billion a year, analyses have found.

There have been adjustments to “net metering” over the years, and a 2013 law required the PUC to address this cost shift. Its first wildly controversial proposal for how to do this, released more than a year ago, would have charged all solar owners a higher fee for fixed costs and reduced credits for exported energy. Rooftop solar owners went ballistic. The proposal was withdrawn.

This new plan, adopted in December, tries to walk a middle ground. Vitally, it exempts all existing rooftop solar owners from any changes. They’ll remain on their current tariff plans for 20 years after their systems hooked into the grid.

Going forward, folks who install new systems with batteries to store solar power — and who can pump energy after dark when it’s most needed — will get the most handsome compensation. Folks without batteries, who only pump excess energy to the grid during the day when it’s already plentiful, will get much less compensation.

Boxes of petitions against proposed reforms in 2021. (AP Photo/Rich Pedroncelli)

The goal is to transition to a “thriving” solar-plus-storage marketplace, to avoid the need for fossil fuel-powered plants to make electricity after the sun goes down, the PUC said.

The new rules will save new residential solar customers $100 a month on average, and solar-plus-battery customers will save at least $136 a month on average, the PUC said. It will also allow eligible customers access to $900 million — with $630 million set aside for low-income customers — to encourage solar-paired-with-storage systems and stand-alone storage. New systems would be paid off by savings in nine years or less.

The decision was hated by folks on all sides of the issue. It cements the $4 billion-a-year cost shift onto non-solar backs for perpetuity, some said. It will result in the destruction of the solar industry in California, others said.

We’ll see, soon enough, where the PUC stands. Predictions welcome.

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