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 CPUC Adopts Transitional Net Metering Rules for Pre-Existing Distributed Generation Systems