California’s much-watched utility rate reform bill cleared its final major hurdle in the Legislature yesterday, gaining approval on the Senate floor with a resounding 33-5 vote. This follows months of negotiations and amendments that resulted in the bill – AB 327 (Perea) – including many strong provisions for rooftop solar. If approved on concurrence back in the Assembly later this week, the bill will head to Governor Brown’s desk, where it is expected to be signed into law.
Over the past weeks, thousands of concerned Californians helped us urge policymakers to close two anti-solar loopholes before approving the bill. Our voices were heard! The version of the bill that passed the Senate had new amendments addressing both of those issues.
All in all, AB 327 is a significant win for the future of rooftop solar in the state. It does leave a number of key policy design questions to the California Public Utilities Commission (CPUC), where we will have plenty of work left to do ensuring that solar customers’ interests are well-represented in its final implementation.
Now that AB 327 is in its final form, a more comprehensive summary of what’s included seems in order. First, the unequivocally good-for-solar elements in AB 327:
1) It ensures that one of California’s most important solar consumer rights, our net metering program, will stay in place until customers of the three large IOUs have installed over 5200 MW of net metered generation, instead of being suspended by the CPUC as soon as the end of 2014.
2) It gives the CPUC authority to remove caps on participation in the net metering program altogether for the first time in California history. The existing cap is set at a rather arbitrary 5% of utility non-coincident peak load, beyond which new California solar customers are no longer guaranteed to receive net metering credit for the valuable clean power they deliver to the grid. Over the years Vote Solar has fought time and again to raise this cap: from 0.5% to 2.5% to its current level. The prospect of an uncapped program is great news indeed!
3) It allows the CPUC to require the utilities to procure renewables in excess of the state’s Renewables Portfolio Standard targets. That’s right, 33% renewables will no longer be a ceiling, but a floor.
4) It requires that by July 2015, IOUs must submit plans to the CPUC on how to maximize the locational benefits of distributed solar and other resources on the grid. This is exciting because there is so much overall grid benefit to be gained from customer investment in distributed solar where it is needed most, and we think that value should be fairly recognized.
Those are some important wins for solar — but it’s not all roses. AB 327 also leaves some big unanswered questions for the CPUC to decide:
1) It authorizes the CPUC to approve up to a $10 fixed charge on residential customers of California’s biggest utilities. Charges like this create a big disincentive for solar and energy efficiency measures because they are slapped on customers no matter how much energy they buy from the utility. We’ll push back against fixed charges at the CPUC, highlighting the need for rate structures that encourage good green behavior.
2) It directs the CPUC to determine the compensation structure for net metered customers who go solar after the 5% program cap has been reached. This decision about the future of net metering must be reached by the end of 2015. We’ll advocate for an uncapped program with a fair structure that ensures customers who go solar receive the full value of the clean energy they feed back to the grid.
3) It gives the CPUC until March 2014 to determine how net metered customers who go solar under the 5% cap will transition to the rules of the expanded program. We’ll argue that solar customers shouldn’t have the terms of their investments changed on them mid-stream.
It’s clear that plenty remains for discussion at the Commission. Bottom line, though, AB 327 makes some great strides to provide needed certainty for California’s rooftop solar market and opens the door to its sustainable long-term growth. It will keep our world-class rooftop solar market delivering energy bill savings, cleaner air, healthier communities, and thousands of jobs to the state. Its passage is a true cause for celebration.
Vote Solar extends a heartfelt thank you to Governor Brown and his staff for leadership in bill negotiations, and to the California Legislature for charting a path that will allow customers to continue to receive fair value for the clean energy they generate from their rooftops. Last but certainly not least, an enormous thanks to the tens of thousands of ordinary Californians who called and emailed their legislators to speak up in favor of clean energy as the bill moved though the Legislature. This is a proud moment for all of us who believe in the power of democracy to make good on California’s solar promise!