On Thursday, March 27, 2014, the California Public Utilities Commission established rules for transitioning distributed generation renewable energy systems from the current net energy metering (NEM) arrangement to the successor tariff which will be adopted by the CPUC in 2015.
The decision, D.14-03-041, was mandated by last year’s passage of AB 327, requiring implementation of changes to California’s NEM program by 2017. AB 327 specifically directed the CPUC to establish a transition period for “pre-existing” systems based on a “reasonable expected payback period” and other factors consistent with California’s policy to promote the use of renewable energy. Under the legislation, systems installed prior to the earlier of July 1, 2017, or the date upon which the customer’s utility reaches the 5% cap on its capacity subject to the net metering tariff, would be eligible for the transition period.
The CPUC decided that 20 years from the date of installation (interconnection) would be the transition period for pre-existing systems. The adopted period is longer than advocated by the utilities and certain ratepayer organizations and shorter than urged by some members of the solar industry and local governments. The Commission also rejected arguments that customers installing systems after adoption of the transition rule should have shorter transition periods on the theory that they had notice of the coming change in tariffs and therefore could not have had reasonable expectations of more lengthy “payback” periods.Continue Reading...
Legal News Alert from Stoel Rives Renewable Energy Law Group
The California Legislature has passed Senate Bill (“SB”) X1-2, which requires California’s electric utilities to increase their renewable generation to 33% by 2020. Passage of the legislation is the culmination of years of effort to increase California’s Renewable Portfolio Standard (“RPS”) from its current 20%. In 2009, the Legislature passed SB 14, which also would have increased California’s RPS to 33%, but the bill was vetoed by Governor Schwarzenegger on the ground that it imposed too many restrictions on the use of out-of-state generation to meet California’s RPS requirement. Governor Schwarzenegger then issued an executive order directing the California Air Resources Board to develop its own 33% Renewable Energy Standard under the Board’s authority pursuant to Assembly Bill 32, the Global Warming Solutions Act of 2006. Last year, the Legislature again tried to pass another 33% RPS bill, SB 722, but the session expired before the legislation could reach a final vote. Two bills were introduced in this session: SB 23 and SBX1-2. SBX1-2 was identical to SB 23, but it was introduced in special session in an attempt to speed passage of the legislation. SBX1-2 now goes to Governor Brown for signature, and he is expected to sign the legislation into law.