• New Law Safeguards Solar Investments in California
  • August 29, 2012 | Author: Sophie A. Akins
  • Law Firm: Best Best & Krieger LLP - San Diego Office
  • A new law prohibits California utilities from imposing a charge only on net-energy metered customers, such as solar customers who “feed” energy back into the grid when their systems are producing more energy than required to serve their demand loads.

    With minor exception, Section 2827 of the California Public Utilities Code already requires utilities to charge net-energy metered customers the same rate structure, retail rate components and any monthly charges as would be applicable if the customer did not net-energy meter. However, Section 2827 was not clear enough.

    On August 21, 2012, Senate Bill 1537 (SB 1537) was enrolled, adding Section 2827.2 to clarify and affirm Section 2827.

    The issue first surfaced in October 2011 when San Diego Gas & Electric (SDG&E) applied to the California Public Utilities Commission to impose a “Network Use Charge” on electricity fed into the grid by net-energy metered customers. SDG&E argued that all customers who fed electricity into the grid were subject to the charge but the reality was that only net-energy metered customers were feeding electricity into the grid. The proposed Network Use Charge, in many instances, would have resulted in a rate increase to certain solar customers of 200 percent to 300 percent. Fortunately, opponents of the Network Use Charge, which included a coalition of San Diego County public agencies comprised of water agencies and school districts represented by Best Best & Krieger attorneys, were able to defeat the charge.

    SB 1537 will ensure that net-energy metered customers’ investments in renewable energy are safeguarded from fees and charges that apply only due to their status as net-energy metered customers. Unfortunately, SB 1537 is set to expire on January 1, 2014, unless extended or amended.

    While SB 1537 does not prevent the utilities from proposing rate structures that disparately impact solar customers, SB 1537 at least signals that the California Legislature continues to support the concept that net-energy customers should not be subject to charges or fees merely because they chose to invest in renewable sources that generate energy in excess of their demand load.