SDCTA Recommendations to CPUC on NEM 3.0
The Association recommends the California Public Utilities Commission (CPUC) change the “Net Energy Metering” (NEM) rate structure to satisfy these principles for San Diego County taxpayers:
Given that increases in poverty result in even higher costs to taxpayers in public support programs and that San Diego already experiences the highest electricity rates in the country, the rate structure should eliminate all cost shifting to low and middle income (LMI) households.
Because new technologies to decarbonize and stabilize the grid should not be disincentivized, incentives should not be recovered through volumetric rates; thus, those incentives should be managed outside of rate structures like NEM.
All future rooftop solar customers should not be compensated for excess energy at a greater value than the value of energy at true market rates and avoided costs. All solar customers should also be charged appropriate fixed cost fees to ensure shared infrastructure costs are fairly distributed amongst all customers.
Vintage NEM 1.0 and 2.0 customers should be transitioned to a rate structure where they are compensated at true market rates for excess energy over a period within five years, with exception to those customers who are enrolled in any low- income rate programs. For all low-income customers, bills should not change at a rate faster than the consumer price index.
For all new solar customers who are enrolled in low-income programs, the CPUC should consider a reasonable “payback” period to be ten years. For all other solar customers, rates need not consider a reasonable payback period, as it would be better to achieve “reasonable payback” through upfront subsidies as opposed to integration into volumetric usage rates.