California Members: NEM3.0 impact on NEM1/2 customers and what to do?

[fafrd]

I think is is important to separate building code laws that govern what goes on behind the meter and the regulations that the IOUs would like you to think regulate what goes on behind the meter. In reality the IOU regulations only apply to us if our inverters export to the grid and/or we have a contract with them in which we agree to their rules. Years ago I read an academic treatise that influenced my thinking about our right to generate power behind the meter. Here is a link:

https://www.google.com/url?sa=t&source=web&rct=j&url=https://escholarship.org/content/qt3643z0qx/qt3643z0qx.pdf&ved=2ahUKEwjtx5C2wfv0AhUSQ80KHcnzAZ8QFnoECD4QAQ&usg=AOvVaw0fTYdr38GRQUMX02iUmrTS

I think the article is even more relevant today given the erosion of NEM benefits. I would love to see the concept tested in a significant court case but I am not willing to be the guinea pig for such a case.

That was a good article - thanks.

I only skimmed but it raises a few important points which I suspect will be sorted out through lawsuits in California after the final Successor Tariff Decision in January:

Utilities can charge authorized fees, but only if they are charging equally for all customers. So a minimum monthly bill of $10 or even $30 per month would certainly stand, but only charging those customers with solar including those that do not ever export a monthly Grid Benefits Charge may not be legal.

If you export any energy at all, they can certainly impose whatever rules and tariffs are allowed, but if you only use grid energy as a generator to charge a battery which is used to power a completely isolated / islanded house, it may be that they cannot and they must by law treat you like any other standard customer (meaning minimum monthly charge applied to all customers at most).

The grey zone arises when you are not completely islanded (as pointed out in the article).

So as long as you are either 100% grid-powered or 100% off-grid powered (islanded) you probably have the strongest argument to be treated like any other customer, but the moment you have a hybrid system which has an active grid connection while at the same time generating energy to power loads, that may put you out of the ‘any other customer’ category (and hence subject to special tariffs).

I’m pretty sure this is likely to get sorted out through lawsuits (probably class-action) after the final decision on the Successor Tariff next year…

 

[Ampster]

but the moment you have a hybrid system which has an active grid connection while at the same time generating energy to power loads, that may put you out of the ‘any other customer’ category (and hence subject to special tariffs).

I guess the issue would turn how "active grid connection: is defined. I do not know of any process that the IOUs could use to charge me if I reduced my consumption by connecting a hybrid inverter "behind the meter" without any export. That case would not be 100% grid connected or 100% off grid. It is the same result as if I just went around and turned off loads.

 

[fafrd]

I guess the issue would turn how "active grid connection: is defined. I do not know of any process that the IOUs could use to charge me if I reduced my consumption by connecting a hybrid inverter "behind the meter" without any export. That case would not be 100% grid connected or 100% off grid. It is the same result as if I just went around and turned off loads.

There are the rules & regulations and there are the means to enforce those rules and regulations.

The rules/law may allow customers self-powering with solar while connected to the grid to be charged differently than customers without any generation (meaning a monthly Grid Benefits Charge).

That doesn’t mean the utility will ‘know’ when you should be dropped into a different customer class…

And your point about reduced consumption being identical to increased generation as far as demands in the grid brings up another aspect which makes no sense and which I expect will be challenged in court.

Customer A has a 1kW solar system and very modest consumption which they manage with zero export.

Customer B has a 10kW solar system and much higher consumption which they also manage with zero export.

Any ‘impact’ on the grid is identical between customer A and customer B, so how can it be legal to charge customer B 10 times more than customer B for the benefit of having the grid available as a generator?

 

[Ampster]

The rules/law may allow customers self-powering with solar while connected to the grid to be charged differently than customers without any generation (meaning a monthly Grid Benefits Charge)

In those examples I am assuming both customers are "connected to the grid" so the customers are in the same class. It seems you saying there are rules that specifically allows an IOU to charge someone differently because they self generate. Show me the rule because I am not aware of it? Of course I am also assuming that the self generation we are talking about is not exported.

 

[fafrd]

In those examples I am assuming both customers are "connected to the grid" so the customers are in the same class.

Yes.

It seems you saying there are rules that specifically allows an IOU to charge someone differently because they self generate.

Currently, the CPUC determines the ‘rules’ and we can see from the Preliminary Decision what the CPUC is considering (monthly Grid Benefits charges for any customers with solar panels generating power).

Ultimately, the ultimately governing ‘rules’ are likely to be determined by judges in a court of law.

And I used my example of Customer A and Customer B to highlight another aspect of the Preliminary Decision that may prove problematic (charging two customers who have equally-negligible impact on the grid vastly different Grid Benefits charges due merely to the different amount of power they generate and self-consume).

Show me the rule because I am not aware of it? Of course I am also assuming that the self generation we are talking about is not exported.

The Preliminary Dexision states that:

‘The charge will be a fixed monthly charge based on the number of kilowatts installed in a residential customer’s system.’

So the question now becomes one of whether a residential customer with solar panels is considered a residential customer with a ‘system’ or not.

Again, if the local building department allows you to build a permitted zero-export system without getting a PTO from the utility, you may be able to stay under the radar and avoid the Successor Tariff as defined by the CPUC.

But it’s pretty likely that if you are required to get a PTO from the utility before you can begin using your grid-tied zero-export solar system that you will be classified by your urltilitubas a ‘residential customer’ with a ‘system’ subject to the Successor Tariff…

 

[GXMnow]

Customer A has a 1kW solar system and very modest consumption which they manage with zero export.

Customer B has a 10kW solar system and much higher consumption which they also manage with zero export.

Any ‘impact’ on the grid is identical between customer A and customer B, so how can it be legal to charge customer B 10 times more than customer B for the benefit of having the grid available as a generator?

I totally agree that this is going to be a huge problem for the proposal. How do we inform them of this problem?
I know I have a very smart meter. It keeps separate isolated counts of watt hours going in to my house and watt hours coming out of my house. I can totally understand a fixed monthly fee based on the size of your main breaker. And that should be the same if you have solar or not. And then the rest of the charges should be solely based on the power taken and returned. Just because my system CAN produce 3,850 watts peak, does not mean that it ever will. Unless that power goes to the grid, what does it matter to them? Especially when I get a plug in car, I want solar to charge that, and not pay them because I PAID for solar panels. Doing some quick math, the grid benefit charge could end up costing as much as the solar panels over time. I have 4 panels that get shadowed for 3 hours, can I deduct that power that I can't ever produce?

Maybe a one time fee based on the size of your solar, I can see that, but having to pay them monthly, for somethin we paid for already??? I see no way that can be found to be legal. Next thing, they are going to charge us every month for using LED light bulbs instead of incandescent ones.

 

[Hedges]

Any ‘impact’ on the grid is identical between customer A and customer B, so how can it be legal to charge customer B 10 times more than customer B for the benefit of having the grid available as a generator?

‘The charge will be a fixed monthly charge based on the number of kilowatts installed in a residential customer’s system.’

Two possible motivations.

One is to charge people for being a departing customer, no longer carrying "their" share of the grid (or for not becoming big paying customer, like they're supposed to.) Because we're headed toward wealthy people getting 90% of their power from PV, while poor people make up a much larger percentage of kWh consumption from grid.

Other is that bigger PV system means bigger consumption means bigger demand on the grid during rare occasions. So they benefit from grid capacity, but only pay for a few kWh, not their share of the necessary infrastructure which must be reserved for them.

I think a "demand" charge based on peak kW or peak daily kWh would be more appropriate. The customer could then learn to adjust his burden on the grid in the future (or just grin and pay up.)

 

[time2roll]

Can I get a discount if I swap my 200 amp breaker for 20 amps? I could build a system to live on that.
I keep hoping with increased EV usage the grid operators can quit whining. Business is not very good at shrinking in the climate of increased efficiency. Home solar is just a scape goat.

 

[fafrd]

Two possible motivations.

One is to charge people for being a departing customer, no longer carrying "their" share of the grid (or for not becoming big paying customer, like they're supposed to.) Because we're headed toward wealthy people getting 90% of their power from PV, while poor people make up a much larger percentage of kWh consumption from grid.

That is the motivation they lay out. I’m just not sure it will end up being legal for customers who don’t export.

Other is that bigger PV system means bigger consumption means bigger demand on the grid during rare occasions. So they benefit from grid capacity, but only pay for a few kWh, not their share of the necessary infrastructure which must be reserved for them.

And if you want that emergency power available to you when needed, that is certainly justified to cost something.

But that should also mean if you decide you can live without your power-hungry air conditioning during an outage and are prepared to cut pack your maximum emergency power to a much lower level (ie: fridges only) you should be able to get a lower grid benefits rate.

I think a "demand" charge based on peak kW or peak daily kWh would be more appropriate. The customer could then learn to adjust his burden on the grid in the future (or just grin and pay up.)

Paying a monthly fee for the ‘peak generator power’ or ‘peak daily generator energy’ you want the grid to be able to deliver would be much more rational but won’t address the heart of the issue.

They want all customers to share the costs of the grid based on the power they consume, whether that power is imported or self-generated.

That is what the old ‘pre-solar’ model was (monthly billing) and they seem to want a model that gets back to thst, whether you purchased your energy from the IOU or generated it.

Anyone know how it works these days in Hawaii?

 

[sunshine]

That is what the old ‘pre-solar’ model was (monthly billing) and they seem to want a model that gets back to thst, whether you purchased your energy from the IOU or generated it.

Anyone know how it works these days in Hawaii?

Do not know what happens in Hawaii, but here in Australia the equitable division of electricity costs is also on the agenda.
Putting solar into a zero-sum game of proportioning electricity costs is made difficult by solars rapidly falling value. Even to negative for when the sun does shine.

I don't see any eventual outcome other than that model of a fixed cost shared by all and another (+ or - ) for generation.

 

[fafrd]

Do not know what happens in Hawaii, but here in Australia the equitable division of electricity costs is also on the agenda.
Putting solar into a zero-sum game of proportioning electricity costs is made difficult by solars rapidly falling value. Even to negative for when the sun does shine.

I don't see any eventual outcome other than that model of a fixed cost shared by all and another (+ or - ) for generation.

Fixed cost shared by all (minimum monthly bill, for example) would be fine.

The issue in California is that they now want to charge only solar customers a monthly grid benefits charge which is not fixed but scales with the size of your solar system (even for zero export).

And as far as +/- for generation, if there is no export, what is the logic of an additional charge based on generation? (since a customer will already be charged for more imported energy when they need it).

 

[Ampster]

Currently, the CPUC determines the ‘rules’ and we can see from the Preliminary Decision what the CPUC is considering (monthly Grid Benefits charges for any customers with solar panels generating power).

Perhaps that is where you and I differ in terms of the power of the CPUC. Their purpose is to regulate the Investor Owned Utilities, not us consumers. I have a strong opinion that the IOUs control only extends to the meter unless by contract we let them regulate any generation which exports to the grid. I do not believe their controls extends to "any customers with solar panels generating power". I believe their (IOUs) control only extends behind the meter to the generating facility that exports power to the grid.

I found a better link to the treatise I posted earlier and am duplicating here because it has shaped my philosophy:

The Right to Self-Generate as a Grid-Connected Customer

Author(s): Wellinghoff, Jon; Weissman, Steven

escholarship.org

I do not like the proposed Sucessor Tariff but nowhere do I see it increasing the IOUs ability extend their control beyond what I have given it by contract. My contract allows me to cancel with 30 days notice. The way it stands now I have 14 years to figure out what is the best strategy going forward. I have a lot of flexibility the way my sub panels are wired and I will be closely monitoring my usage and production to see how close I can come to self consuming all the power I produce.

 

[fafrd]

Perhaps that is where you and I differ in terms of the power of the CPUC. Their purpose is to regulate the Investor Owned Utilities, not us consumers. I have a strong opinion that the IOUs control only extends to the meter unless by contract we let them regulate any generation which exports to the grid. I do not believe their controls extends to "any customers with solar panels generating power". I believe their (IOUs) control only extends behind the meter to the generating facility that exports power to the grid.

I do not like the proposed Sucessor Tariff but nowhere do I see it increasing the IOUs ability extend their control beyond what I have given it by contract. My contract allows me to cancel with 30 days notice. The way it stands now I have 14 years to figure out what is the best strategy going forward. I have a lot of flexibility the way my sub panels are wired and I will be closely monitoring my usage and production to see how close I can come to self consuming all the power I produce.

Once the CPUC rules that the IOUs can charge a monthly Grid Benefits Charge of $8/kW to customers with solar panels.

If your IOU knows you have a solar atray, you will get the bill.

If you refuse to pay they will cut off your service (meaning you’ll truly be off-grid).

That’s about the only say you have in the matter.

You can file a lawsuit against your IOU but if they are following the guidelines approved by the CPUC, the odds are against you winning…

 

[Hedges]

The approach I've read is used in Australia seems better.
You can connect a small grid-tied net-metering system.
To connect a much larger system, you allow the utility to control your AC delivery (production?), just as utility scale generation is controlled.
Rooftop PV then has the option of being part of the solution (rather than the problem of destabilizing grid.)

So long as that includes payment at wholesale rates.
(NEM 3.0 proposes to pay rooftop PV net $ZERO$. PG&E as contracted to pay $0.10/kWh for utility scale PV.)

 

[Ampster]

If your IOU knows you have a solar array, you will get the bill.

That is not an issue for me. The proposed Tariff is only directed at Net Metering contracts. I do not interpret it extending to someone who is not in a contract with the IOU to export power. I could mount solar panels on my patio cover to provide shade and that would not cost me $8 per kWhr. In my jurisdiction patio covers do not require a building permit. The panels would require a permit if I connected them to my house electrical circuits.
My contract gives me or them the right to terminate the contract with 30 days notice. I have 14 years to figure out the best time to do that. My purpose is not to change your opinion but rather to let other readers see another opinion so that they can make the best decision for themselves.

 

[Ampster]

To further support my view that we have a right to generate energy here is a section of the California Public Utility Code

CA Pub Util Code § 2801 (2020)
2801.
The Legislature hereby finds and declares that in order to promote the more rapid development of new sources of natural gas and electric energy, to maintain the economic vitality of the state through the continuing production of goods and the employment of its people, and to promote the efficient utilization and distribution of energy, it is desirable and necessary to encourage private energy producers to competitively develop independent sources of natural gas and electric energy not otherwise available to California consumers served by public utilities, to require the transmission by public utilities of such energy for private energy producers under certain conditions, and remove unnecessary barriers to energy transactions involving private energy producers.

(Added by Stats. 1976, Ch. 915.)

This can only be changed by the legislature not a by a Commission ruling such as the proposed Sucessor Tariff. Note also the use of the term "encourage" and not the terms "allow" or "permit".

 

[fafrd]

To further support my view that we have a right to generate energy here is a section of the California Public Utility Code

CA Pub Util Code § 2801 (2020)
2801.
The Legislature hereby finds and declares that in order to promote the more rapid development of new sources of natural gas and electric energy, to maintain the economic vitality of the state through the continuing production of goods and the employment of its people, and to promote the efficient utilization and distribution of energy, it is desirable and necessary to encourage private energy producers to competitively develop independent sources of natural gas and electric energy not otherwise available to California consumers served by public utilities,

to require the transmission by public utilities of such energy for private energy producers [y]under certain conditions[/u], and remove unnecessary barriers to energy transactions involving private energy producers.

It’s exactly those ‘certain conditions’ we are talking about (and which the CPUC is defining).

(Added by Stats. 1976, Ch. 915.)

This can only be changed by the legislature not a by a Commission ruling such as the proposed Sucessor Tariff. Note also the use of the term "encourage" and not the terms "allow" or "permit".

And who exactly is it that decides whether a successor tariff designed to deliver a 10-year time to break-even is ‘encouraging’ or not?

 

[Ampster]

It’s exactly those ‘certain conditions’ we are talking about (and which the CPUC is defining).

I agree those certain conditions are when we export.

And who exactly is it that decides whether a successor tariff designed to deliver a 10-year time to break-even is ‘encouraging’ or not?

No one. That is not the point I am making.. They are different issues. The Code section I quoted is my basis for my opinion that we have a right to generate. Only when we export does the CPUC have the "certain conditions" to regulate what we do because we require the transmission of that energy on the utilities network. I agree the current proposal does not "encourage" us to develop power for export but there seems to be an overriding concern about economic equity which the IOUs have suggested and that is why I have no confidence the Governor is going to do much about the ST. I hope I am wrong.

 

[Hedges]

So people will be compelled to install PV (on new homes), and give mid-day power for free to the grid. And pay the grid for self-generated and used power. To support the grid for benefit of other consumers.

Not much different from compelling people to purchase over-priced health care policies, so their premiums will cover cost of treating others with serious pre-existing conditions. (That relieves government of paying for many uninsured, so they can use tax money for "better" purposes).

Both of these programs are basically just a tax, by any other name. But in the name of public health and environmental protection.

 

[Ampster]

So people will be compelled to install PV (on new homes), and give mid-day power for free to the grid

The requirement is for Net Zero homes. The most economical way to get there has been to install solar. I have not figured out what the repercussions of the new Sucessor Tariff will be on the trend to install solar on new homes. If I remember correctly the solar can be committed from a community solar farm so that may be a shift. I seem to recall non profits and commercial installations were not included in the plan to charge the $8 per kW of installed solar so that may be a workaround. Presumably Community Solar is either commercial or non profit. I wonder if that will be an unintended consequence of the the new tariff which may not result in additional revenues for the utilities.