REGIONAL – Rooftop solar advocates opposed to the California Public Utilities Commission’s (CPUC) recent decision to cut the amount new solar users will be compensated for supplying power to the grid are petitioning for a chance to be reheard.
Following months of hearings in 2022 that included hours of public comment mostly against the CPUC’s decision, attorneys for two groups filed requests with the CPUC for a chance to argue again. Tri-Valley advocates of rooftop solar agreed that the CPUC should revisit its decision.
In a 25-page application for rehearing filed Jan. 17, Michael Boyd, president of Californians for Renewable Energy (CARE), accuses California Gov. Gavin Newsom of conspiring with CPUC board members to violate state and federal antitrust measures that benefit the state’s three largest public utilities, including Pacific Gas & Electric, which serves Northern California.
Boyd identifies the conspirators as PG&E, Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E), Newsom, the CPUC commissioners and staff, and groups including Cal Advocates, Natural Resources Defense Council and The Utility Reform Network.
The conspiracy’s objectives, the petition says, include wholesale and retail price fixing and price discrimination.
“The pretext for the conspiracy is an alleged cost-shift between small renewable power generators, including customers with residential solar systems, to IOU (investor-owned utilities) customers without residential solar systems,” the petition alleges. “We contend this proffered reason is pretextual and the proximate cause of the antitrust injuries.”
Boyd’s application for a rehearing – along with a joint petition from three environmental groups – follow the CPUC’s 5-0 decision on Dec. 15 to dismantle policy incentives enacted in 1997 to entice customers to install solar panel systems on their roofs.
The policy known as Net Metering (NEM) requires the utilities to pay solar panel users about 30 cents a kilowatt for generated power they didn’t use and sent to the grid. The policy resulted in millions of Californian’s installing panels on their rooftops, but opponents contended the utilities passed the cost paid to those who could afford rooftop solar onto those who could not.
The California Public Advocate’s Office (PAO) reported last year that the cost of the rooftop solar incentive program increased from $3.4 billion in 2021 to $4.6 billion in 2022 for customers who did not have rooftop solar. The PAO said those without rooftop solar were paying more for electricity to subsidize the NEM solar incentive.
In reaching compromises on its new policy – termed NEM3 – the commission said the change beginning in April will only lower the price paid to new solar customers, not those who already have it.
Despite that, groups against the incentive change, which lowers the price paid for future solar users from about 30 cents to about 8 cents a kilowatt, say it will kill the consumer market for solar panel use at a time when the state is attempting to transform to clean energy.
Livermore resident David Rounds called the commission’s NET3 decision a “huge mistake.”
“Why, in the middle of an existential crisis like climate change, would the governor-appointed CPUC take steps to de-incentivize rooftop solar?” Rounds said. “PG&E does everything it can to advocate for huge industrial scale solar factories, because that energy is very cheap when purchased in bulk. We certainly need these large solar energy generation operations, but we also need to maximize solar energy production everywhere.”
Dublin resident Shirley Lewandowski said the CPUC failed to “adequately account for the externalities that large-scale (distant) solar power plants produce, and which are avoided by installing local roof-top and parking lot solar.”
“Those externalities include the direct financial and indirect environmental costs of transmission lines, the direct impacts on agricultural land and biological habitat of large-scale solar power plants, and the resiliency of having solar power generated and stored where it is used,” Lewandowski said. “No accounting for these real externalities was in the CPUC’s NEM3 decision.”
Filed within weeks of the vote, Boyd’s petition alleges the CPUC surrendered its regulatory authority over the public utilities by affording the IOUs “undue influence and control over the CPUC deliberations, decisions and actions” related to the energy market. He accused CPUC and IOU officials of having “politically incestuous relationships … which effectively preclude any independent judgment and exercise of discretion in the implementation and application of governing and controlling federal and state laws and regulation.”
In the other petition, the Center for Biological Diversity, the Protect Our Communities Foundation and the Environmental Working Group contend the CPUC made legal errors in its decision, failing to meet statutory requirements for altering its policy.
“To cure this legal error, the commission must grant this application for rehearing and reverse its adoption of the decision,” the groups’ attorneys argue.
The groups contend NEM3 violates its own statutes because it “will neither ensure the continued sustainable growth of distributed renewable generation nor encourage the spread of those resources to disadvantaged communities,” something the rules require.
“The decision presents prospective NEM customers with an unattractive economic value proposition and a longer payback period,” the groups contend. “Record evidence demonstrates that these changes will dramatically decrease growth of NEM resources in direct violation of the (CPUC code) mandate…
“The decision’s justification for disregarding this record evidence – a purported need to balance other statutory directives – ignores the statutory language, which commands the Commission to achieve all of the statute’s goals. The decision also unlawfully leaves behind residents of (disadvantaged communities) and low-income customers.”
Two groups – including Berkeley-based 350 Bay Area, a nonprofit organization focused on “ensuring a sustainable climate and associated environmental and economic justice for all” and the Clean Energy Coalition in Santa Barbara – also filed a brief in support of a rehearing.
350 Bay Area contended the NEM3 policy “fails to acknowledge the substantial benefits of rooftop solar.”
“We file this response because it will be more difficult if not impossible to meet the urgent timeline required by the climate crisis and multiple state goals, including renewable energy, emission reduction, local resilience and a high DER (distributed energy resources) future if rooftop solar installations in California dramatically decrease,” 350 Bay Area contends in its brief.
In a response against a rehearing, attorneys for PG&E, SCE and SDG&E, contend the arguments are nothing new. The petitions reprise “previous contentions on issues that were fairly litigated in the proceeding and resolved in the decision.”
“The decision sets forth the necessary findings and conclusions for the Commission’s determinations, which are supported by substantial record evidence,” the utilities contend. “Applicants have failed to present any legal error and the Commission acted within its discretion in making the factual and policy determinations reflected in the decision. Applicants’ effort to re-litigate these issues should be rejected and the (petitions) denied.”
Terrie Prosper, a spokeswoman for the CPUC, said the commission will review the allegations in the petitions to determine whether the applicants “demonstrated legal error in the underlying decision.”
“The CPUC will issue a formal decision resolving the Applications for Rehearing, but there is no specific timeline for the CPUC’s issuance of that decision,” Prosper said.
