UTILITY NEWS

There are many changes occurring in the utility market that you should be aware of.  None of these changes are in your favor.  Here is a breakdown:

When net metering was first introduced in California in the late 1990s the agreement was that you would sell energy to the utility at the same rate you bought energy from them.  This retail-for-retail rate structure incentivized consumers to invest in solar electric.  This investment has reduced our collective need for pollution-creating generating sources, has financed innovation in the industry, saved you money and created clean jobs for many.

As the popularity of net metering grew, a very predictable problem surfaced:  If many people no longer pay much or nothing to their utility the funds to maintain generating and distribution systems decreases.  People who do not have solar may need to bear these costs.  This group includes renters, people of reduced income and those without good solar exposure.  The costs that are not met because of loss of revenue are called “stranded costs.”  These costs have been used to justify major rate increases.

The problem of stranded costs would be a real problem if it were not for the fact that PG&E’s net profits have been increasing at a rapid pace in spite of these stranded costs. Link.  SCE has had similar increases. Link.

In order to recover those stranded costs these utilities have asked the California Public Utilities Commission to abandon the retail-for-retail model.  As of 4/15/2023 all new grid-tie solar customers sell energy to their utilities at a fraction of the amount they pay for that energy.  This energy is called exported energy. This link shows the export rates. Look carefully-- there are a lot of little numbers and most of them are around $0.01 per kilowatt/hour. As of 4/15/23 or soon after, anyone with a net metering contract over 20 years old is forced onto this new rate. The new rate is called NEM3, Solar Billing or NBT.

What this means is that if you are on the new rates, if used to pay very little for electric energy, you will now starting paying a lot more.  This new reality has driven a stake through the heart of the solar industry in California.  De-incentivizing residential solar is killing the green jobs in the field and will kill the innovation needed to improve the technology.

Recently there is a movement to force even more customers onto these new rates.  Here is a link to an article about this.  The utilities will break their contract with you as solar customers and change the agreement.  I strongly suggest you educate yourself and contact your state representatives and voice your opinion.

Along with the changes in the net metering export rate, the rates for buying energy have gone up.  California has some of the highest utility rates in the nation.  There is a new strategy I recommend for anyone on the new imbalanced rates:  If you consume the energy you produce, you avoid paying for energy at these higher rates.  Try to use electricity when your system is producing at its maximum.  We will be running our air conditioning sparingly, as always, and we will be careful to run it only while the sun is shining.  We have purchased a plug-in hybrid car and charge it during daylight hours.

Some are compensating for this rate imbalance by buying battery systems and charging them when the sun shines and running their houses at night on the batteries.  These systems are expensive.  What this means is that people with means are finding other ways to avoid paying for energy.  This negates any benefit to the new rate structures.

Keep an eye on this page for future updates.

William Miller

Another subject bears mentioning:  As of January 2025 all residents of unincorporated San Luis Obispo County and of the City of Atascadero are being served by 3CE energy.  3CE provides generally more environmentally friendly generating sources.  PG&E still handles the distribution and billing.  I support 3CE and I will not be opting out. 

3CE did make one mistake in the process:  They wanted to sync the true-up dates for all solar customers.  This meant that some PG&E customers had a truncated true-up period.  For a true-up to be fair it must run for a full year so consumers can take advantage of the increased summer production to offset winter consumption.  Many customers with an early true-up received unfairly high true-up bills.   This was most unfortunate but it does not negate the benefits of 3CE.

Links

Solar Rites Article