Net metering is a system that credits PV system owners for electricity generated and fed into the grid and it is crucial to the continued deployment of residential and small to medium commercial PV systems.

Net metering 2.0 is on its way, though what exactly the new program will consist of and what compromises will be made before it is finalized remains to be seen. A new net metering program for California must be in place when California’s Investor Owned Utilities (PG&E, SCE and San Diego Gas & Electric) reach their 5% threshold or by mid-2017(whichever comes first) and battle lines are drawn as the deadline for the successor net metering program required under California AB 327 nears. The solar industry would prefer no change to the way PV generated electricity is valued, which is currently at retail rates. The states Investor Owned Utilities (IOUs) want significant changes to the value of PV generated electricity as well as new $3.00/kW monthly fees for residential PV system owners or lessees. Each IOU has a different method of assessing the monthly fee. For example, PG&E would like a demand charge and SCE would like a grid access charge – these charges are on top of a new monthly fee of $10.00 that all residential rate payers will be charged.

Complicating matters, at least for PG&E and possibly the CPUC, in August the CPUC voted to investigate operations at PG&E, a move that has the potential of leading to the breakup of the utility. The investigation has its roots in the 2010 San Bruno pipeline explosion. Following the explosion emails came to light exposing a very close relationship between PG&E and the CPUC, a lax attitude towards safety on the part of the utility and the utility’s sloppy paperwork (much of which was lost). Several fines later and amid federal and state investigations into the relationship and the utility’s safety record, CPUC head Michael Peevey stepped down and was replaced by Michael Picker who promised a more open relationship with the public and stricter oversight. Despite promises from Commissioner Picker, the CPUC (as of publication) has not complied with a search warrant from the California Attorney General concerning its relationship with the companies it regulates.

Commentary: First and foremost, the formerly and potentially current very friendly relationships that the CPUC has/had with the companies it regulates is simply unacceptable and potentially criminal.

Second, it took far too long to replace CPUC Commissioner Peevey. The new leadership at the CPUC needs now to be as transparent as possible or it simply cannot be trusted to regulate anything. This means turning over all requested documents and emails immediately because stalling has implications.

Third, the culture at PG&E and the other IOUs should be investigated potentially either annually or biannually by rotating experts so that no one becomes comfortable relationship-wise.

Fourth, it just might be time to reconsider whether gas and electric operations can be appropriately managed under such a large umbrella, or whether the problems at PG&E are specific to it. That is, are mighty IOUs dinosaurs that need more than regulation and/or is it their time to lumber off of the stage.

As to NEM 2.0, this decision is a test of whether or not the CPUC can move into a distributed generation future that puts more of an onus on conservation, independent responsibility, electricity generation by renewable technologies (with storage) and that rewards rate payers for all-of-the-above instead of penalizing them. PV generated electricity that is fed into the grid benefits everyone. Polluting forms of electricity penalize everyone.