California rate reform set to boost solar

“AB 327 modernises electric rates by allowing the CPUC authority to create a fair rate structure that protects consumers from exorbitant utility bills,” said Assembly member Henry T Perea, who introduced the bill.

“The bill is the product of months of negotiations that resulted in an equitable compromise supported by consumer, senior, labour, community and business groups. We worked very hard to protect low-income households, and the compromise succeeds by protecting CARE discounts for struggling California residents.”

The bill initially drew concern from the solar industry and California's Investor Owned Utilities. Last month, protests gathered outside Sempra Energy, the headquarters of San Diego Gas & Electric, over concerns that the bill would make it more expensive for customers to go solar and weaken net energy metering (NEM) incentives.

But after a number of amendments, which resulted in the approval of both utility companies and many solar businesses, the Senate voted 33 to five in favour.

“Assembly member Perea, the utilities, TURN and other consumer groups, worked hard to reach a compromise,” said Mark Toney, executive director of the consumer protection group, The Utility Reform Network. “AB 327 provides the CPUC the authority it needs to update the rate structure while protecting customers from the unlimited charges originally proposed by the utilities.”

AB 327 directs the California Public Utilities Commission (CPUC) to work out rate changes after a detailed technical investigation. But utilities are likely to be able to charge all ratepayers a fixed monthly fee of up to $10 each under AB 327.

“California’s current rate system is unfair, inefficient and too complex,” said Tom Bottorff, senior vice president for regulatory affairs at Pacific Gas and Electric Co. “AB 327 will help bring high rates back into line with costs and restore fairness to California’s electric customers.”

Many clean energy advocates are opposed to the potential fixed charge of up to $10 per month that could hurt investments in efficiency and solar power. Current owners of solar power systems, those that signed up for net metering before the 5% cap, including farms and schools, are opposed to a controversial provision that would direct the CPUC to determine how long existing solar customers can hold onto their current net metering agreements.  

 “California is once again on the brink of making history and setting a new bar for solar power,” said Bernadette Del Chiaro, executive director of CALSEIA, the California Solar Energy Industries Association. “With this bill, Governor [Jerry] Brown is saying he wants a future in which solar power is effectively unlimited and able to grow to help meet the state’s climate goals.

“[But] the devil will be in the details hammered out at the CPUC.”