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Californians’ energy costs could rise and fall with judge’s solar call

So the tortured, lawyerly tomes on whether and how to revamp electricity rates for California’s solar panel owners are in — hundreds upon hundreds of pages of them in a steamy soup of “NBCs on BTM consumption” and ” ACC Plus adder” and “SGIP storage incentive” and “upfront MTC” — and an administrative law judge is wading through them, weighing the future of your electric bill.

This proceeding before California’s all-powerful utility regulator will impact every person who flips a light switch or presses an “on” button in the Golden State.

If you’re one of the vast majority of Californians who do not have solar panels on your roof, it might save you money.

If you’re among the minority who do have solar panels on your roof, it might cost you money.

And if it works according to plan, it will prod current and future solar system owners toward adding battery storage so the sun’s rays can be harnessed after the sun goes down, when clean energy is scarce.

Take two

The cities of Irvine, Fulllerton and Costa Mesa have given preliminary approval to join together to purchase electricity for their cities' customers. They would take the task from Southern California Edison although Edison would continue to deliver the power. The move could result in reduced rates and a mix of more clean energy. (Photo by Leonard Ortiz, Orange County Register/SCNG)
(Photo by Leonard Ortiz, Orange County Register/SCNG)

After clamming up for nearly five months, the California Public Utilities Commission in May took the unusual step of reopening the highly contentious rooftop solar proceedings.

Rather than throwing out a proposed decision detested by so many rooftop solar owners — which would dramatically hike their monthly kick-in for system upkeep, and dramatically shrink their earnings for sending excess energy to the grid — the administrative law judge asked folks to weigh in on how changes might be eased in more gradually and fairly.

The hundreds of pages — penned by well-paid lawyers for utility and solar companies, environmental and consumer rights groups — address technical questions posed by the administrative law judge.

They differ radically on how to reduce the credit rooftop solar owners get for the energy they export to the grid to more accurately reflect its (far, far lower) market rate with the least Sturm und Drang.

They differ widely on whether solar systems with batteries should have more favorable rates than those without.

They differ enormously on how much solar owners should have to pay for the grid’s true cost and upkeep, a burden now being shouldered mostly by folks without solar.

In short: Advocates for the solar industry argue against major changes to the current system and for a long, gentle step-down period that preserves the current system as long as possible.

The major utility companies argue that the people without solar have been subsidizing the people with solar for years, to the tune of some $3 billion, and it’s long past time to pull the plug and get on with it.

So for some balance we turn to the PUC’s public advocate, a quasi-independent, in-house Solomon the Wise charged with protecting consumers. (We’ll note here that solar proponents say the public advocate is really in the utility company’s pockets, like everyone else who wants to change the system. Really. Everyone.)

Solomon says

The public advocate’s office has long said that fairness requires change to what is technically called “net energy metering,” or NEM, and it said so again.

The Commerce Department said Monday it is investigating whether imports of solar panels from Southeast Asia are circumventing anti-dumping rules that block imports from China. (File photo by Michael Goulding, Orange County Register/SCNG)
(File photo by Michael Goulding, Orange County Register/SCNG)

“Solar industry parties continue to advocate for proposals that would unnecessarily dilute much-needed reforms,”  the public advocate told the judge. They push for lengthy “glide paths” that do little to fix the cost shift and continue to favor “the unjustifiable linkage” between exported solar energy (during the day, when it’s actually quite cheap) and the much higher retail electricity rates, with some “proposing a lock-in period of up to 20 years. In short, what the parties seek to retain is the same structure that created the annual $3 billion cost shift we have today.”

That cost shift from solar owners to everyone else has grown to some $4 billion, the public advocate said, and “must be managed with stronger measures to address the risk that high electric rates and bills could slow California’s overall progress toward its electrification and climate goals, and harm some of the state’s most economically vulnerable residents.”

NEM customers continue to cause costs even when not directly importing energy from the grid — because the grid has to be able to serve everyone, and including solar owners who need electricity after the sun goes down.

It’s going to get ugly. (OK, uglier).

Boxes of petitions against proposed reforms that solar energy advocates claim would handicap the rooftop solar market are displayed before they are taken to the governor's office during a rally at the Capitol in Sacramento, Calif., Wednesday, Dec. 8, 2021. State regulators at the California Public Utilities Commission are expected to propose reforms that would lower the financial incentives for homeowners who install solar panels. (AP Photo/Rich Pedroncelli)
Boxes of petitions against proposed reforms that solar energy advocates claim would handicap the rooftop solar market at the Capitol in Sacramento in December. (AP Photo/Rich Pedroncelli)

Solar industry and owners call most any reform a “solar tax” and legions have blasted the PUC for trying to kill solar. The utilities say that the solar industry and solar owners are desperate to protect their own profits. But you hear nary a peep from the non-solar folks, who aren’t even fully aware that encouraging rooftop solar is a cost built into their electricity rates.

“It is unrealistic to think that the average customer knows that the joint utilities are required to purchase rooftop solar energy on their behalf at eight times the cost of alternatives (something not required of any other load-serving entity or utility in California),” California’s big three utilities told the judge.

“In contrast, (solar) customers know exactly how much the subsidy benefits them because, as shown in this proceeding, bill savings (are) what primarily drives customers to install (solar). … This lack of transparency is perhaps why public comments do not accurately reflect what public opinion on NEM would be if the subsidy was not embedded and hidden.”

Despite its enormous costs, the solar program benefits just 10% of Southern California Edison’s residential customers, 12% of Pacific Gas & Electric’s and 17% of San Diego Gas & Electric’s, the utilities said.

We’re a step closer to the PUC making some decisions on all this so we can get on with it. Electricity rates in California are obscene.

Solar panels atop a home in the Sendero neighborhood of Rancho Mission Viejo on Monday, Dec 16, 2019. (File: Photo by Jeff Gritchen, Orange County Register/SCNG)
Solar panels in Rancho Mission Viejo (File: Photo by Jeff Gritchen, Orange County Register/SCNG)

A study by UC Berkeley’s Haas Business School, with the nonprofit think tank Next 10, found that San Diego Gas & Electric customers paid double the national average, Pacific Gas & Electric customers paid about 80% more, and Southern California Edison customers paid about 45% more.

“These high prices result from uncommonly large fixed costs that are bundled into kilowatt-hour prices and passed on to customers,” the Berkeley/Next 10 study said. “These costs cover much of the generation, transmission and distribution fixed costs, as well as energy efficiency programs, subsidies for houses with rooftop solar and low-income customers, and increasing wildfire mitigation costs.”

Source: Orange County Register

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